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Husky Injection Molding

Systems

Husky Injection Molding Systems

(Bolton, Ontario, Canada) is an
OEM of injection molding
machines and highly specialized
molds; a world market leader in
the plastic injection molding
industry. In late 2007, Husky
management was tasked by its
then corporate parent Onex, to
embark on an aggressive cost
reduction initiative, to increase
their margins and make the
company more profitable.
As an originally family-owned
business, Husky had made a
conscious decision to be
vertically integrated to maintain
their competitive advantage inhouse. However, several times
over the preceding fifteen years,
they had attempted to outsource
their controls and cable
assemblies. Each attempt had
Husky Injection Molding Systems Case Study

been eventually deemed

unsuccessful, and the items had
returned to in-house production.
At this point in time,
management felt that these were
ideal candidates for outsourcing
to contribute to the mandated
cost savings, as well as allowing
Husky to concentrate on their
core competency: the design,
manufacturing, marketing and
sale of molds and injection
molding machines.
A decision was made to look for
potential assembly partners in
Mexico, and more specifically in
Monterrey, capital of the
northeastern state of Nuevo
Leon. Monterrey has been long
considered Mexicos industrial
capital, and it is the home of
manufacturing facilities for over
1,500 foreign companies. Its well

educated and trained workforce

as well as its proximity to the US
border, makes it an attractive
near-shoring option
After evaluating several
candidates, Newland de Mexico
was one of two finalists for the
controls and cables business.
Prototypes from both companies
were requested; in December of
2008, Newland was selected as
the partner of choice. A contract
was signed, and the outsourcing
project officially kicked off in
January of 2009.
The Husky control cabinet project
was a relatively low volume and
high mix assembly operation.
Each cabinet controls and powers
one of Huskys injection molding
machines.
1

Low volume high mix

Practically no two cabinets to be built are exactly the same. Each
individual system includes not just the cabinet, but also one to three
interconnection boxes and upwards to 150 individual field cables

These machines are used for a

wide scope of applications, but
the main one is the molding of
PET bottle preforms, for global
companies such as Coca Cola,
Pepsi Cola, and Nestle.
One important aspect of the
project in general, is that
practically no two cabinets to be
built are exactly the same. Also,
each individual order includes
not just the cabinet, but also one
to three interconnection boxes
and upwards to 150 individual
field cables.

Another challenge is that Husky

requires all field cables shipped
connected to the cabinet, as well
as the cabinet to be 100% tested
for continuity and for some
essential functions, making it a
plug and play component once it
arrived at Huskys suburban
Toronto headquarters.

The initial knowledge transfer

took place in a two month period.
Newlands personnel traveled to
Toronto and spent several weeks
learning the particulars of
Huskys products. The cable
assembly process was
particularly challenging, as each
cabinet required a wide variety of
cables, from discrete wires to
very large 50 conductors cables
and specialized fiber optic
communication cables that are
especially sensitive and can
become unusable and near
impossible to detect failure if
built incorrectly.

The cabinets have a labor

intensive content therefor
require a well trained workforce.
2

Husky Injection Molding Systems Case Study

The scope of the project included

the purchasing and inventorying
of all raw materials at Newlands
facility.

Group) five manufacturing and

distribution companies.

Four years from its first delivery

of a control cabinet to Husky,
Over a period of several weeks,
Newland de Mexico continues to
the Husky and Newland Supply
be its only partner for industrial
Chain teams worked together to
control and cables in the
After a first piece quality review,
transfer a portfolio of 54 domestic
Americas. Throughout those 4
a production ramp up started. By
and foreign suppliers. Whenever
years, new product families have
the end of the year, Newland was
possible, Newland was tasked to
been introduced and more than
averaging two projects a week,
engage the Mexican version of
500 new part numbers have been
and in 2010 volume grew rapidly.
the US or Canadian supplier to
added to the project catalog.
At the start of Q3, Newland was
minimize the impact of freight
now averaging one project per
costs.
Through its partnership with
day.
Newland, Husky has been able to
The most successful of these
realize different goals. First and
efforts was the transfer of all
foremost, by outsourcing these
sheet metal items from Huskys
assemblies to a lower cost
Montreal based supplier to
location, significant labor savings
Pentair Technical Products,
have been realized without
owner of the Hoffman brand of
sacrificing on time delivery or
cabinets, with a manufacturing
product quality.
plant conveniently based in
Reynosa, Mexico, a two hour
Second, instead of dealing with
Deliveries were scheduled to ship
drive from Newlands facility.
over 50 separate control cabinet
up to five full projects each week.
Sheet metal costs were drastically
part suppliers, Husky now
This ensured that freight costs
reduced, including freight costs
communicates with one supplier
were kept under control. By
which were more affordable from
who manages the day to day
2011, the Newlands workforce
Reynosa to Monterrey than from
business with all the content
had grown by 100% and the
Montreal to Toronto.
providers, freeing up Husky
company had the second most
Supply Chain team members
revenues in US dollars among its
Once Newland had ramped up
time to pursue other cost cutting
corporate parents (Canfer
its raw material inventory and
initiatives.
Husky Injection Molding Systems Case Study

designed and implemented its

production processes and
equipment, all systems were go
for the assembly of the First Build
cabinet. This first cabinet was
shipped to the Bolton plant in
May of 2009.

Focus on core competency

By transferring commodities such as control cabinets and cables to
an outsource partner, Husky has been able to redeploy its resources
to concentrate on their core competency

Third, additional cost savings

were realized by moving certain
labor intensive raw materials,
such as sheet metal cabinets, to a
lower cost location supplier
without sacrificing freight costs
Finally, by moving commodities
such as control cabinets and
cables to an outsource partner,
Husky has been able to redeploy
its resources to concentrate on
their core competency. In the four
years since the Newland
outsource, Husky has introduced
several new products, allowing
them to further grow both its
market share in the Americas as
well as establishing a presence in
China with a new facility in

Shanghai to service the growing

Far East Market.

opportunities by outsourcing
their controls and cable
assemblies. To that end, Newland
has developed a Roadmap to
assist companies who are
considering embarking in this
journey. By leveraging the
experience of developing
outsource projects from A to Z,
Newland can offer this service to
potential partners.

For Newland de Mexico, the

experience of handling the full
scope of this project has allowed
them to go beyond the typical
assembly maquiladora and
position the company as a full
service partner for companies
looking for cost reduction

Husky Injection Molding Systems Case Study