When Roger Klouda joined the family mold-making business, his first job was to polish an aluminum mold. "After one hour of polishing, I had created about eight more hours of work for myself because I did it wrong," Klouda says. That's when he decided that was not the part of the business he wanted to do.
Now, 37 years later, Klouda and MSI Mold Builders have changed the way molds are made and he leads a prospering company that can compete with any mold shop for any project. Not bad in an industry dominated by journeyman mold makers.
MSI, Cedar Rapids, Iowa, specializes in molds from 330 tons to 6,600 tons and it operates with just six or seven traditional mold-makers. Klouda talked with Editor Ron Shinn about how his company has changed.
How did MSI Mold Builders start?
KLOUDA: My father had a large tool-and-die business in Cedar Rapids that built a lot of dies and did special machine work. A large plastic pipe manufacturer in Iowa would send him molds to repair, but his union die makers refused to work on molds. After a couple years of this, he started another company a couple miles away to do the mold repairs he had been turning down.
The economy slowed down in the late 1960s and the die shop went out of business in 1970. He and my mom still had the little mold shop, so they ran that business. Then the union representing the die makers argued that it was a continuation of the die shop business. But my father had documented that the union die makers had refused for two years to work on the molds. After four years of arguing before the National Labor Relations Board, he won the case and MSI was operated as a nonunion shop.
That must have been a tumultuous time.
KLOUDA: For those four years, my father never entered the plant during the week. My mother ran the day-to-day business. He had guys come to the house to go over designs and how things would be done. An interesting way to run a business, but it had to be done.
Did you join MSI immediately after college in 1972?
KLOUDA: No. I moved to Chicago to be near my future wife, who was going to college there. I joined three ex-seminarians who had started a nonprofit company called Just Jobs. We supplied temporary labor to manufacturing companies in the Chicago area. This was a pretty abused group of workers, so we tried to pay them better, treat them better and get them full-time, permanent jobs. Very rewarding work, but it was also depressing to see the abuse that was taking place.
When did you join MSI?
KLOUDA: In 1978. I started working on the [production] floor. I am not a machinist, but I have done some machine work. I am not a mold maker and I think that is something that has helped this organization. I did not have a predetermination of what things had to be or how they had to go. Most mold-making companies were started by mold makers, and I respect that. But I did a little bit of everything on the floor. I challenged a lot of the conventional beliefs, which didn't make me very popular at times. I still like to challenge what we did yesterday to see if there is a better, faster or cheaper alternative.
When did you become president?
KLOUDA: In 1995. We had a second plant in Arkansas and had grown to 60-70 employees.
Why Arkansas?
KLOUDA: We had a major customer in Iowa that made injection molding machines for structural foam as well as molding parts. They sold the molding group and it moved to Arkansas in 1980. They asked us to move our company there with them. We decided that wasn't a prudent business decision, yet we wanted to support that customer. We opened a facility there to do repairs and build small molds while continuing to build the larger molds in Iowa.
Are you still in the same location where your father started MSI?
KLOUDA: No. That was a 4,000-square-foot facility that was not safe for the size molds we were building. We did not have overhead cranes. Material handling was scary, so we needed a safer environment for our employees.
Why did you open a plant in South Carolina?
KLOUDA: We were building large tools in Iowa and shipping them to customers in that area. There was no way for us to do the revision, maintenance or warranty work they required. Molds we shipped there would go to a competitor for those services. I hated to lose that business.
We purchased an existing mold shop in Greenville in May of 2001. Then 9/11 happened and the economy went into a tailspin. I couldn't allocate the resources down there to change the culture. The company was in a survival mode at that point, so some bad practices there did not get fixed like they should have. But it has worked out after the initial scare and they are a major focus for growth in the future. We have invested heavily there recently, and it will continue.
We closed the Arkansas plant in 2009 and now handle that work from Iowa or Greenville.
How did you change your mold making to a manufacturing process?
KLOUDA: We realized 20 years ago that we needed to change our philosophy from one man leading a job throughout the build to a manufacturing process. In 1990, when we moved into this plant, we had 40 journeyman mold makers. Today we have six or seven doing traditional mold-making work.
Everything follows a defined, standardized process. It is the same process for every mold, no matter how big or small it is. The people who make decisions on how a mold gets built are mold makers. The ones doing the fitting and assembly and diagnostic work are journeymen as well.
Many of our CNC and EDM [electrical discharge machining] specialists are journeymen because we transitioned them from their traditional role. New hires are more likely CNC specialists that are being trained in mold making.
We put detailed numbers on prints to tell employees what each part is. The staff has developed a coloring system on the mold pieces to communicate what the different surfaces represent. When we are running a three-shift operation, we don't always have engineering staff on duty to tell them what a component is and what it does. By our numbering and coloring system, they know.
Was it a tough process to go from 40 mold makers to six or seven?
KLOUDA: We had a lot of stops and starts. There was no one in house who knew manufacturing. We knew mold making. We brought in a man who barely knew what a mold was but knew manufacturing and he was able to help us apply standard manufacturing processes to a one-off product. It was somewhat painful, but necessary. Technology required a different set of skill sets to be productive. It wasn't always well-received. Change is painful.
China changed our industry. The competition, fair or otherwise, made our industry evolve. Some people fought China and wanted the government to intervene. Others, like MSI and other industry leaders, adapted to compete and sought out new methods and methodologies to improve.
What edge does MSI have over its competition?
KLOUDA: Our process is extremely robust, which leads to about the lowest cost you can get from a mold building standpoint. We don't want to be known as just a low-cost provider. Our process leads to much lower cost and much faster delivery, most of the time. Our on-time delivery is 94-plus percent. Our first-shot quality is extremely high. We have a really good handle on what we really do well and we stay out of the stuff we don't do well.
You recently installed a 3,000-ton Van Dorn injection molding machine for sampling. Have you been tempted to get into molding?
KLOUDA: I have had customers who said they wanted us to do sampling, but that they didn't want to see a brand-new press in here. They think that if you have a new press, it means you are going to have to run parts. We would never bypass our customers and go directly to the OEMs. If we do that, we might as well get out of the mold-making business. We took a tired machine and completely rebuilt it. It runs great, customers love us being able to sample larger tools.
How have you managed through tough economic times?
KLOUDA: The biggest thing for us is that we really manage our debt well. We buy a lot of equipment every year right out of cash flow. Not having a bank payment due gives you more power from a pricing standpoint when business is slow.
Another big thing is that our process has led to lower costs. We also have a philosophy of doing what we can with what we have. It is not necessary to always have the newest piece of equipment.
Our staff is pretty incredible, as well as flexible. During slow periods, we work on process development/improvement and test strategies and technology. How do we implement more of the technology we already own?
Most people look at our facility and say we are really cramped. Our philosophy is to use our square footage as a competitive advantage. Until we built an addition 18 months ago, we believe we had the highest sales dollars per square foot of any mold shop in the U.S. We will get back there soon.
What is the worst business decision you ever made?
KLOUDA: In our first building, I did not anticipate how large the molds were going to become. The building was not tall enough for the lifting capacity we needed, and I have paid for that every day since. I cannot raise the roof. I should have projected our needs better. It is hard to fight some of the inefficiencies that it has caused.
Do you have children in the business?
KLOUDA: We have a son, Kyle, in the organization for about five years and he is developing a passion for mold making. My wife and I are happy about that. We are hoping that at some point we can have third-generation leadership.
How would you like to be remembered?
KLOUDA: Professionally, as someone who helped change this industry from a trade to a manufacturing process. We've worked really hard at that and our plant is open to anyone who wants to see what we do and how we do it. Personally, I hope the opportunity we have been able to give people, through our industry, has made their lives better, given them the opportunity to do things they never thought they could do and reach levels they never thought they could get to.
