With manufacturers putting increased pressure on their suppliers for cost savings and efficiencies, mold manufacturers are being challenged to produce consistent, accurate product cost quotes. These challenges include the need for:
Increased precision and accuracy. No matter what your company’s processes are for costing molds, chances are there is a sizable discrepancy with actual costs. It’s imperative to have a solid understanding of actual costs to make sure you are winning new business that is profitable.
Faster response times. The ability to turn quotes around quickly is a huge competitive advantage for mold manufacturers, but this is very difficult to do accurately without the right tools.
Reduced overhead costs. It’s expensive and time-consuming to turn around a detailed quote, especially if it’s not accurate.
Need for Visibility and Control
For years, manufacturers put very little scrutiny on their tooling budgets, partly because tooling costs were considered a mystery. Quotes for tooling were (and often still are) very high-level, broken down only by material and labor costs, and there are very few cost standards to measure against.
Today though, as the cost of tooling rises and pressure mounts for increased profitability, manufacturers are asking for a greater degree of granularity in tooling estimates, forcing mold manufacturers to take a much more critical look at their tooling estimates. This can make it difficult to turn quotes around quickly.
For most mold manufacturers, part and product cost quoting is a time-consuming process, typically done manually with homegrown, template-type solutions developed in Microsoft Excel or similar database applications. These costing tools usually require highly experienced professionals with years of expertise in tooling and moldmaking to develop a quote, and each individual might be using different estimation methodologies, and material and labor costs. Mold manufacturers need to automate and accelerate this process so that they can respond more quickly and accurately to RFQs, and ultimately drive increased revenues.
Managing the Cost of Cost Estimating
To effectively manage tooling costs, mold manufacturers must address the key challenges described above. This involves standardizing the cost estimating process to ensure consistency and minimize the manual intervention required. This in turn requires a deep understanding of the key variables related to tooling and moldmaking costs, including how they might change from one region to another, and the cost variables of different machine and process capabilities. Ideally, this knowledge is built into the system you use versus having to rely on a select few experts. To generate highly accurate and detailed cost estimates, mold manufacturers should look for systems that can be used by non-costing experts and that have the following capabilities:
1. Automatically calculate tooling costs at a very detailed level from a 3D CAD model.
2. Produce a detailed tooling bill of materials (BoM) that includes:
• Physical characteristics—part size, mold size, material weight, actions, lifters, number of drops, etc.
• Materials and purchased items—core and cavity plates, ejector box, actions and inserts, stop pins, EDM carbon, etc.
• Labor and machine times—design, machining, assembly, finishing, tryout, labor hours by process, CMM inspection, etc.
• Generate highly detailed, first-pass tooling estimates without requiring that the user have any tooling knowledge or expertise. This enables fast, efficient and accurate responses to requests for rough estimates.
3. Offer automated tooling estimates each time a component is cost. This provides non-tooling experts with quick access to precise estimates in real time.
4. Provide automated bulk costing with a wide range of user inputs, or predefined “process setup options” or defaults that allow you to very quickly cost the tooling of many parts.
• Include refinement tools for final adjustments by tooling experts.
• Provide tool amortization.
• Can be set up and calibrated to specific company, equipment, rates, manufacturing rules and operations.
Case in Point
An injection mold and tool manufacturer was struggling to quickly and consistently generate accurate quotes, and specifically to address these challenges within its injection mold operations.
Engineering and producing prototypes and production molds across a diverse range of industries and broad range of injection mold sizes (from 50 to 3,300 tons) was often time-consuming and expensive. There could be as high as a 20-percent variation in the estimate–to-actual costs. Specialized cost experts with detailed knowledge of design, machining and fabrication processes and costs were needed to generate cost estimates. Even then, the manual processes used were very cumbersome and often based on inaccurate, historical cost information.
The company deployed an enterprise software-based product cost management solution to automate its quote-generation processes and reduce both the time and costs associated with generating cost estimates. In many cases, entry-level employees could generate the cost estimates in a fraction of the time it might take the experts to do manually, ultimately reducing overhead costs by as much as 55 percent. Moreover, the company has improved its RFQ turnaround time by 300 percent, with little to no variance against actual costs. Now its ability to quickly and accurately generate RFQs is a competitive advantage for the company.
Standardizing the Process
Tooling costs have become an increasingly important area of focus as moldmakers and manufacturers look for new opportunities to cut product costs without sacrificing product quality. The challenge has been the lack of effective tools to provide the level of detail necessary to truly understand those costs and how to impact them. When evaluating solutions to manage and estimate tooling costs, it is very important to standardize the process without limiting your ability to reflect the unique capabilities and characteristics of your specific manufacturing environments. Look for solutions that work with your 3D CAD system, PLM software and other manufacturing execution systems already in place. The more visibility into costs early on in the process, the easier it is to consistently and accurately reduce those costs, streamline decision-making and accelerate time to market.
It’s a common, frustrating scenario: You send out an RFQ to find the best fit for your project, but the quotes you receive present the information in different formats and provide varying levels of information. That makes it hard to conduct a true apples-to-apples comparison of suppliers before choosing the right one.
Why not simply select the lowest piece price? Selecting a plastic injection molding supplier that can provide you with the least expensive part will likely cost you more in the long run. As we explained it in many business nigotiation , an approach relying only on piece price can lead to problems with part quality, deliverability, and support. As your project launch gets underway, your well-intended sourcing decision may end up putting your supply chain at risk.
Buying a mold is a complex and sometimes tedious process, but a few rules can help make the process easier. They’re not written in stone, but you’ll find that to most moldmakers they are gospel.
Send an RFQ that is as detailed as you can make it. Don’t make themoldmaker guess what you want. Moldmakers are a lot of things, but mind-readers they’re not! Be specific about the type of mold, the number of cavities, the steel, expectations of mold life, and any guarantees you’ll need. If you aren’t certain about any of these items, get input from your moldmaker to help you determine exactly what type of mold is best for your requirements. The more detailed the RFQ, the more accurate the moldmaker’s quote will be.
Be honest about why you are requesting a quote. If you need a ballpark figure to submit to marketing, say so. But don’t ask for a complete engineering evaluation and quote, then casually mention it’s just a preliminary quote on a project that’s at least a year away. Or you’re just fishing. Quoting is time-consuming, and moldmakers want to spend their time quoting jobs that have good promise of becoming a reality soon.
Respect the intellectual property of the moldmaker. The knowledge and creativity a moldmaker has acquired are his or her intellectual property. Keep those ideas and suggestions confidential when going out for quote. If you choose another mold shop to do the work, don’t tell moldmaker “B”to make it the way moldmaker “A” suggested in his quote. Remember, moldmaker “B” didn’t quote it that way and may not understand why moldmaker “A” made that suggestion.
Consider the benefits of forming a true partnership with your moldmaker(s).Bring in
him or her early on your project for input; work with him in regard to costing goals and budgets; life of the project and part quantity expectations. Moldmakers don’t like being mushrooms! The best purchasing is done by those who truly know their suppliers and play as a team, openly and honestly, to the benefit of both companies.
Communicate with and solicit communication from your moldmaker on a regular basis. Many provide Gantt charts or other types of progress reports online, or provide online access to regularly posted updates. Knowing where the mold build stands and if it is on schedule is critical, so request scheduled information stands and if it is on schedule is critical, so request scheduled information
Make your payments on time per the agreement. Few moldmakers can afford to play banker, and building a mold entails many, sometimes large, up-front expenses on their part. There are a number of ways to approach the payment schedule, such as 30% down, 30% at half completion, 30% at completion, and 10% upon part approval and mold shipment. Different moldmakers have different plans, or will work with you on a payment schedule that is fair, equitable and will benefit both companies.
Changes to the part design can mean changes to the mold. Remember, the more changes you make during the mold build, the less likely you are to get a mold in the lead time or at the price quoted. Understand that when you require part design changes, it often leads to changes in the mold design, which can add both time and cost to the mold build.
Define up front when the mold is considered complete. When is a mold complete? That often determines when final payment is made. Is the mold complete upon approved part sample? Upon shipment? Usually a mold is complete when it is capable of producing a part according to specifications and dimensions on the part print. Most moldmakers will make small changes and tweaks to get the mold to spec to make the part according to print dimensions. A decision to make a change to the part, and consequently to the mold, after the part has met print specs doesn’t mean the mold isn’t finished. When the part meets print specifications and dimensions, the mold is complete. Changes are done via an ECO (engineering change order) and will be priced accordingly.
If it sounds too good to be true, it probably is.You may find a moldmaker who quotes very low prices on a job. Maybe he’s hungry, or maybe his overhead is low so he can price lower than other shops. However, any quote that comes in too low might not be the bargain is appears to be.
This is the main need in preparing and establishing a computer aided system for mold calculation and quote preparation. Thanks for the information.
your experience is worth studying