Cord Set Manufacturers
Working Smarter…Not
Harder
Economic pressures force manufacturers to
streamline methods with automation

By Fred Noer

"Nothing endures but change."
When the Greek philosopher Heraclitus uttered those famous words sometime
during his life in circa 540-480 B.C., he must have been thinking of the cord
set manufacturing industry.

His pronouncement, heavy on paradox, seems to apply perfectly to the somewhat
paradoxical cord set industry. Its products are simple and straightforward, so
they require few changes. But, it is engaged in the complex matter of dealing
with foreign competition from China, Taiwan and Mexico, so production
processes constantly are being evaluated for change to lower their cost.

Due to the tremendous economic pressures, cord set companies certainly must
adhere to another saying: "Work smarter, not harder."  Since the mid-1980s
many firms have been streamlining their manufacturing methods by using
more automation.

Leading the push toward automation is Electri-Cord Manufacturing Co. in
Westfield, Pa., in the north central part of the state. Six years ago the company,
which was founded in 1946, started using its automated cord machine. It takes
cord off reels, cuts it, attaches terminals to both ends, molds the plugs, tests the
cord and applies a date-code stamp to produce a finished product.

According to Electri-Cord sales manager Jon Quinn, one cord can be produced
every three seconds. The machine, which operates 24 hours a day seven days a
week, produces 20-40 percent of all the firm's cord sets.

The company's products are made for OEMs in various industries worldwide.
They manufacture industrial products, medical equipment, toys, power tools,
telecommunications equipment, appliances, printers and computers. All of
the custom pieces are manufactured according to specifications and
configurations established by Underwriters Laboratories (UL), Canadian
Standards Association (CSA), International Electrotechnical
Commission (IEC) and/or National Electrical Manufacturers Association
(NEMA).
"Total cord production can be done on one machine," said Quinn, who
has been at Electri-Cord 19 years, 17 as sales manager. "We are an innovator
in automation for our industry, and we are the most automated cord
manufacturer in the world."

The machine, which was 10 years in development led by Electri-Cord
president Mitch Samuels, is the only one in the world. Quinn related that
five companies were involved in making the machine at a Switzerland
manufacturer. Initially, the machine was going to be produced and sold to
other cord producers, but the concept was dropped due to the high machine
cost and a small market.

Other processes in the Electri-Cord plant are automated with standard
cutting, terminating and molding equipment, but none to the extent of
the unique machine. The firm plans more automation, but Quinn
declined to provide specifics.

Another company attuned to automation is Kord King in Mount Joy, Pa.,
southeast of Harrisburg. The business, founded in 1980, makes custom
cords and cord sets for OEMs primarily in the telecommunications,
pump and temporary power outlet industries. Like Electri-Cord, Kord
King works off specs from UL, CSA, IEC and NEMA.

"Almost all of our operations have semi-automation of processes as
we attempt to eliminate labor," said Tim King, company president.
"We have to be as productive as we can to be competitive. We also
want to reduce our set-up times as close to zero as possible and turn
inventory as soon as possible."

He pointed out that semi-automated or automated equipment is purchased
from European companies, particularly those in Germany and Switzerland.
Each machine is bought new. "We never have bought used," King said.
"To keep ahead with the good technology, you must buy new."

Automation comes at a cost, he noted. A machine for automatic terminal
installation costs $60,000 to $75,000. One that requires more manual
labor for the same job costs $5,000 to $7,000.

Besides automation, costs are being reduced at the two companies by
using bridges on the male end of cords. Female bridge receptacles, also
known as pods, are part of production, too. The bridges replace individual blades.

According to King, bridges have been used the past five years in the United States.
Use in Europe, however, dates back 25 years. Bridge use has become so
prevalent in the United States that he speculated every NEMA 515P plug,
commonly used on household lights and appliances, contains a bridge,
regardless of manufacturer.

King stated that a bridge costs 40 percent more than two or three separate
blades, but that figure is offset by cost savings in one termination operation
as opposed to two, less time to load the mold and shorter molding time.
Also, less plastic is used in the mold.

Bridges were not used by U.S. companies sooner because of higher material
cost, King stated. "They were pennies more, but that's a big deal on high
volumes," he said. "However, we didn't recognize the advantages in using
them. It was like we couldn't see the forest for the trees. Mitch Samuels
was a big pusher of bridges in this country, and it's paid off."

Due to high production costs, few cord set companies make their own
brass blades, terminals, bridges or receptacles. Good sources of those
pieces are available, King said.

The two other main elements of a cord are the covering and the wire,
but nothing is new concerning them. PVC provides the least costly
and most effective covering. Other materials for high and low-temperature
cords have been developed, but they are in niche, low-volume markets.
Copper wire continues as the standard, and the product can be obtained
from many suppliers.

Quality has been improved by using simpler materials and more
automated equipment. "Operator error is eliminated when the equipment
does the job," said King, who has been at his company 20 years. "Plus,
production can be monotonous, so we want to do all we can for the operator."

As an ISO 9002-certified company, Electri-Cord follows high quality-control
standards. "We do true fail-safe testing, and that differentiates us from other
companies," Quinn said. "If a cord is not tested automatically, it is done
manually. A cord does not leave here untested.

"Some manufacturers only lot test, but we don't do that," he said. "With a
double-ended cord in a lot, there's no chance for it to be retested before it
is plugged in by the consumer. For instance, on a computer the single
component that can kill you is the cord. Nothing else can."

Quinn reported defect rates are near zero, less than 100 parts per million.
"Electrical quality is our main concern," he said. "Then we look at the
visual aspect if the cord is ugly, misformed or the wrong color. Well-trained
people are in place to catch these things."

On-time delivery is 100 percent for both companies. Shipping and handling
methods at Kord King often involve customers bringing their own containers
to pick up orders, which have been e-mailed to the plant. Bar codes are
attached to the containers for identification.

Electri-Cord has imposed quantity limits. They mean a customer will be
required to take a full pallet or truckload if an order is close to either of
those amounts.

They differ in their approaches to inventorying for customers: Kord
King does not, but Electri-Cord does. King said his company's attitude
toward not holding inventory is tempered by the fact that "we can turn
around an order on a dime. We're the only manufacturer to turn
around an order so quickly."

Inventorying is provided by Electri-Cord for its customers in response
to their needs. "They have realized that just-in-case inventory costs them
money, so they have pushed that responsibility back to the vendors,"
Quinn said. "We own the inventory, so it's up to us to monitor it for
when a customer needs it.

"In the last five years inventorying has become more and more prevalent,
but it has not added significantly to our costs," he said. "We watch our
inventories as well, so we keep only enough inventory. It backs up to our
suppliers.

"We try to further penetrate our customers by doing more for them,"
Quinn said.  "As you always hear, it's easier to sell more to an existing
customer than developing a new customer."

Customer service has become a more intense focus for American cord
set makers. Customers can buy finished products in China, Taiwan and
Mexico for 20-100 percent less than U.S. products. The price differential
depends on the type of cord and the extent of automation in the manufacturing
process.

"The competition is only going to intensify," King said. "The major player
is China. This is the first year that Mexican manufacturers have called me
to complain about China and to say they need more automated equipment."

As for the quality of foreign products, King has found that it compares
favorably to that of American quality. "Everyone would argue that," he said.
"China has quality manufacturers that know what they're doing. I would say
the quality is still not as high as ours, but visually it is. In some product lines
there have been safety concerns."

Quinn concurs. "The quality of Far East products was shoddy at first,
but it is better," he said. "We just want to make sure the same UL and
NEMA standards are enforced."

Although U.S. manufacturers have trouble competing against foreign
pricing, they can reign supreme in delivery. Nonetheless, King recognized
that many customers are coping with foreign shipping problems. "They are
more and more used to that, and they have adapted by considering shipping
just a nuisance cost," he said. "They just pass it through into the cost of
their products.

"However, there's always the uneasiness of receiving products from abroad,"
King said. "Are they going to be on time, or will they be diverted, or will
they be stuck in customs for an issue such as UL validity tags?"

More questions were posed by Quinn. He wondered about overcoming
language barriers, shipments leaving on time, minimum order amounts
and inventory impacts. "What if an order is needed one week sooner?
You can't push the boat faster," he said. "What if a shipment has to be
delayed by a week or two because orders change? Do you slow the boat
down or turn it back?"

From the Far East ocean shipping can take 3-6 weeks, depending
on prime or consolidated freight status and shipment size. Sailing
time may be only 7-10 days, but time has to be allowed for staging
containers, unloading, sorting and trucking to the destination in the
United States.

Even air freight requires 3-7 days, but the cost is main factor why air is
used little. Quinn said freight charges are as high as 50 cents to $1 per cord,
compared to less than 10 cents for ocean freight.

"Low labor is being chased all around the world, but we've had some
customers say that they've had it and that they will pay more to have it
done here to avoid those problems," Quinn said. "They are finding that
our delivery, response and quality are more important than buying solely
on the purchase order price."

Because of the foreign competition, Quinn has seen the number of U.S.
cord set manufacturers decline steadily since the late 1980s. Some of them
have narrowed their focus by concentrating on select groups or sizes of
customers, he observed. "There's always room for companies to find a
niche and enjoy it and prosper in it," he said, "but they're not going to
grow too much.

"Our company's strong points are automation, innovation and history,
and they make us flexible, responsive and competitive," Quinn said.
"We are here to stay and to grow."

Adaptability to the changing marketplace is one of Kord King's strengths,
according to King. "We're going to have to handle smaller runs of cords,"
he said. "Where we used to run 5,000 or 10,000 of one item in a day, a
good option now is to set up and run 500 or 1,000.

"We'll expand by continually improving our manufacturing methods
through automation," King said. "That will allow us to expand our
company with more customers."