Since its founding in 2001, family-owned ICON Injection Molding has grown organically from a little stall in Happy Valley, Arizona, to three facilities spanning more than 55,000 square feet. Being a custom molder means each job we take is unique and, whether a customer orders 1,000 parts or 100,000, we must be ready to react. Like most U.S. manufacturers, we’ve also faced staffing challenges and found ourselves hitting capacity. To continue delivering high-quality parts to our customers on demand, we needed to automate. Naturally, however, we had skeptics — and, as ICON’s chief financial officer and co-owner, I was one of them!
Because knowing a company needs automation and figuring out how to afford it are two separate things.
From our past experiences, I didn’t see how automating made sense financially. Beyond the high upfront costs, the automation providers we’d worked with previously hadn’t been true partners. They’d sold us equipment, set it up and then seemed to disappear on us.
When our executive operations specialist, Jeff Galindo, first brought Formic’s offering to the table, I hadn’t heard of Robotics-as-a-Service and I thought their model sounded too good to be true — but I listened.
At ICON, we respect each other for the unique talents we bring to the table. When my husband, Philip, and his brothers, Danny and Steve, founded ICON 22 years ago, they were experts in custom plastic injection molding but had limited business experience. They’d learned the trade in their father’s shop, while I’d started my accounting career in the late ‘80s and was working for another family-owned business. As ICON’s first employee, I set up the corporate documents, business plan and accounting system, and, though I had my own career, I continued working with my family part-time. Then, after 30 years with Westcare, INC, I facilitated the sale of that company and joined ICON as CFO. The timing couldn’t have been better. We blossomed, opening a new facility, and today, we are building another one.
When Jeff proposed Formic, Philip, as CEO, was excited. Being the risk-taker and grower, he was ready to dive in, but as CFO, I had to scrutinize the fine print. Formic offers a Pay-for-Productivity automation model in which they design, install and maintain their own robots, only charging an hourly rate when the robots are operational. That means it’s in their best interests to deliver efficient systems and provide 24/7 monitoring and maintenance.
I remained suspicious, but, with no upfront cost and the option to cancel the contract if the cell didn’t work, how could I say no?
We partnered with Formic to automate our longest-running project, which previously required a worker stand at a 720-ton press all day, retrieving 300-degree plastic parts and placing them into a cooling bath. Not only did this manual task result in employee turnover and injuries, but it led to operational inefficiencies and production delays.
Formic worked with my operations team to customize, deploy and fine-tune a robotic cell to automate this entire process. We also collaborated to find a fair monthly minimum usage rate, including provisions for rollover hours — which is key to accommodating our shifting order sizes. The cell itself is also adaptable. If project requirements evolve, Formic will update the programming.
The heart of Formic’s offering is that if the system isn’t working as promised, we don’t pay our $10-per-hour fee. But they’ve fulfilled the promise and more. With zero investment, we’ve seen a 20% increase in production, cut operational expenses by 40%, and improved cycle time by 30%. This automation has also eliminated our need to hire temps for that cell, created a safer work environment and enabled us to promote staff.
Another big win was being able to inform the customer involved that we’re now ready to handle a tripled order — a benefit we’ll undoubtedly see in our financials! We’re also showcasing this cell to potential customers, which is driving new business. Despite a nationwide downturn in the injection molding industry, we’ve quoted more in the last quarter than in any previous quarter, and Formic has played a role in this achievement.
Though I started out a skeptic, I listened to my team, read the fine print and remained open to innovative ideas. My brother and ICON’s former operations director, Jim Rhodes, whom we lost during COVID, actually spearheaded our automation journey, so this feels like an homage to his legacy. Now that we’ve found an accessible path to automation, I look forward to partnering with Formic on our next project.
ICON Family Business Matters
- Nancy Kleitsch, CMA MSA, helped launch and grow 22-year-old, family-owned ICON Injection Molding and today serves as CFO.
- ICON’s married CEO and CFO installed barn doors between their offices to facilitate open communication.
- ICON provides custom plastic injection molding solutions, crafting quality parts for laboratory use, security devices, and more.
- With zero CapEx, ICON automated via Formic’s Robots-as-a-Service and saw a 20% increase in production, 40% decrease in operational expenses, and 30% bump in cycle time.
[In this issue’s Tech Notes article, Formic co-founder and CEO Saman Farid discusses “Why Is China Beating the U.S. in the Automation Race?”]
Did You Know: As we seek to tighten supply chains and re-shore manufacturing, the International Federation of Robotics’ 2022 World Robotics report reflected a 14% increase in industrial robot installations in the U.S. It was ICON’s second-most successful automation year in history, but ICON co-owner Nancy Kleitsch notes that win falls short compared to China’s installation of more robots than the rest of the world combined.
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