(Updated May 2019)
One of the biggest issues in the injection molding industry—for both molders and customers—is evaluating the total cost of ownership of a product or project. Though there are several things OEMs can do to make their RFQ’s more accurately match their molding needs, customers still need to carefully and comprehensively analyze the quotes received from potential vendors and look at all of the capabilities of those vendors.
While OEMs tend to be very price conscious, they really should be cost conscious and look at the total scope of their project. There is a stark difference between an upfront price per part and the long-term cost of supplying those parts over the production lifetime of part—the latter is usually referred to as the “total cost of ownership”, “total landed price”, or “total manufacturing cost”. This difference gets obscured when customers compare what they think are bids for the equivalent work and materials, but in fact are “apples to oranges” comparisons. This is one very common reason why some customers object to above-reasonable prices from injection molders.
This problem impacts the industry in two big ways: injection molders who actually deliver competitive value lose out on business unfairly, and customers who think they are getting a good deal actually end up incurring large “hidden” expenses which weren’t reflected in the quote. When evaluating your potential supply chain partner, OEM’s need to look at not only their capabilities on an initial project but how the supplier will support all aspects of the project.
Too often, OEMs will use only the quoted price per part for comparing the bids they received. This is a problem because other costs which can significantly impact the total landed price tend to get ignored and new costs can often creep up if your supplier doesn’t have all of the capabilities you need.
Fortunately, these problems can be avoided. In this article, we’ll discuss how customers can thoroughly and fairly evaluate and compare the total costs of quotes they receive from prospective injection molding suppliers.
Support Throughout the Entire Product Life Cycle
In order for an OEM to determine if a molder is truly able to meet their needs, that customer must consider the entire injection molding from the initial concept, prototypes, initial production, and high-volume manufacturing. As the molding project evolves in scale and complexity each year, ongoing support by the supplier will be needed to successfully ramp up production to meet demand.
That in turn requires a vendor with excellent project management capabilities, as well as other proper resources such as the specific equipment (including metrology machines and inspection tools), skilled personnel on their team, and all relevant ISO certifications that are needed across other projects as well.
What does this have to do with the total cost of ownership?
Plenty. Here are two recent cases we have seen where the supplier’s production capacity was mismatched for the total production lifetime of a molded part, resulting in high unexpected costs for the OEM:
- One OEM chose a supplier to produce their initial prototyping and short run production. Once the production demand increased and the production volume began increasing, the supplier mentioned that they could not support the high-volume production levels due to capacity and resource restraints. The customer was forced to move the tools to a supplier who could successfully handle high volume orders.
- We also witnessed another scenario where a customer selected a vendor for initial production runs—only to learn later when their product hit the market that the supplier only does high volume production. The OEM incurred extremely high setup fees from that supplier and was also forced to find and source from a supplier who could handle their low and medium volume needs.
Lessons to learn
Be selective when choosing the suppliers on your project, something that may seem like a great fit at this stage of your product lifecycle can cost your big time down the road. Really dig deep into the core competencies of the potential supplier and think longer term about your product, you need a partner that can handle all of your needs from cradle to grave and beyond. This is a core reason why Crescent Industries has invested so much back into our capabilities, departments, equipment and automation.
The Impact of Mold Maintenance on Tooling Lifetime
Customers need to ensure that preventative mold maintenance is included in all the quotes they receive, especially if high volume production is expected for many years. Preventative tool maintenance can extend the life of the tool, saving OEMs from the high costs of high scrap rates, reject rates, unexpected downtime, mold repair, and even mold replacement.
Although preventative mold maintenance does save money for customers, there is some cost associated with it an it’s minimal compared to issues that can arise without a solid PM plan. This is especially true if the part material is corrosive, requires high mold temperatures, high molding pressures, or contains abrasive elements such as glass (note that all these factors will also increase the cost of the tool).
On quotes for new production, this maintenance cost can “shift” to the tooling price since molds with more cavities require less frequent mold maintenance for higher production runs. Since the tooling price tends to be one of the few items customers zero in on, this shift from downtime (factored into the price per part) to the upfront tooling cost can be deceptive because that higher upfront tooling price is actually a visible investment which saves customers lots of future hidden costs.
Thus, if one molder factors this crucial maintenance into their quote, but another molder doesn’t, then the two quotes can’t be fairly compared, and the customer is at risk of incurring much higher costs down the road.
How the Quality of the Mold Impacts Total Cost of Ownership
The quality of the injection mold has a huge impact on the total cost of the production of parts. A high-quality mold which is properly maintained and made out of the most durable materials will pay for itself many times over due to producing more parts per cycle, a longer production lifespan (as the higher upfront cost is amortized over many more parts), minimized unexpected downtime, fewer costly repairs, and lower scrap rates.
There are lots of things which go into a high-quality mold before the first part is made. Many of these are covered by the Society of Plastic Industry (SPI) mold classifications:
Class 101 Mold
These molds are for 1 million cycles (before major maintenance) or more and fast cycle times. Not surprisingly, they are fabricated from only the highest-grade materials, and cost the most.
Class 101 mold bases must have a minimum Brinell Hardness Number (BHN) of at least 280, and all cavities, cores and other molding surfaces must have a hardness of at least 48 on the Rockwell C scale. Guided ejection, temperature control features must be present (e.g. in cores, cavities, slides, and anywhere else possible), slide wear plates, corrosion resistant cooling channels, and parting line locks are all required for Class 101 tools.
Class 102 Mold
Class 102 molds are for no more than 1 million cycles (before major maintenance) and are a good fit for parts made out of abrasive materials (like glass-filled resins) and parts with tight tolerances. These molds are still near the top of the mold price range, as they are made with high-quality materials.
Like Class 101 molds, Class 102 mold bases must be a minimum of 280 BHN and the all the molding surfaces need to be hardened to a Rockwell C hardness of 48. The temperature control requirements are the same for Class 102 tools as well.
For Class 102 tooling, guided ejection, slide wear plates, corrosion resistant cooling channels, and plated cavities are all optional, depending on the total production quantity required by the mold.
Class 103 Molds
For no more than 500,000 cycles (before major maintenance), Class 103 molds are a very common and economical choice. The mold base hardness requirement drops to 165 BHN, while cores and cavities must be hardened to at least 280 BHN. All other features are optional.
Choose the Right Tooling
These three SPI classes are meant to easily define the mold’s quality to facilitate uniform quotes for the same types of molds from different suppliers. The SPI class may detail the quality of the materials and standard shot life before major maintenance however, they don’t indicate the level of molding expertise, DFM analysis, mold fill simulation, QC, and other labor which went into the mold. High quality and multi-cavity molds will have lots of this, and it will show in the tooling cost.
When it comes to molded plastic parts, the old adage is still true: you get what you pay for. If a low cavity tool is picked in an effort to save money, there’s a risk that tool won’t be able to keep up with production requirements, resulting in frequent downtime for repairs and maintenance. In the end, the customer may have to purchase a new tool. That’s why it’s critical for molding customers to make sure the tool class in the quote matches both the volume and quality (including surface finish and other cosmetic items) needed for the part.
How Lower Prices Can Lead to Hidden Costs
There can be plenty of hidden costs which can lurk beneath the one or two numbers customers usually focus on: the price per part and the upfront tooling cost.
Awarding the business to the molder with the cheapest tooling and lowest price per part can end up costing OEMs much more than an “expensive” CM in the long run. Anytime a mold is less costly to buy up front, it may well mean higher on-going costs during the life of the tool. These added expenses include frequent repairs and maintenance over the life of the tool. Other hidden costs include poor part quality and a slower than anticipated cycle time, both can lead to shortages of consistent high-quality parts.
One or Two Numbers Cannot Capture Everything
For customers to effectively achieve total cost reduction while avoiding the large hidden costs listed above, it is necessary to run and maintain a mold at the highest efficiency possible. That requires risk mitigation in the form of maintenance and a well-designed mold.
In summary, a lot of factors need to be considered when comparing competing quotes for injection molding, not just the upfront tooling and per part costs. By better understanding all the cost impacts of a potential vendor’s offer, customers can make wiser choices when they award business, actually reduce the total cost of ownership, and boost their bottom lines.
Remember, short term mindset choices can cost you significantly in the life cycle of your product. Think about where your product could be in 2-3 years, and choose suppliers based on that.
For additional information, please fill out the form below to get our white paper “10 Factors that Impact Tooling Costs”.