Moldmaking can be a difficult business to accurately forecast. Work comes in when the OEM/brand owner is ready, and the ability to impact the project launch is out of the hands of the tool shop. The lure of growing a tooling business by expanding into custom production molding is one that has attracted and continues to attract many tool-shop owners. Having a revenue stream built on the production of a planned number of components certainly sounds like a much easier way of making a living. However, competing and performing successfully as a production molder requires a great deal more than simply purchasing injection molding machines, then putting pellets in one end and counting the money that comes out the other.
Certainly, one of the largest expenses is the equipment and expanded facilities required for the job. All modern tool shops understand the cost of high-performance machining technologies. On the shop floor, high speed, high precision and high repeatability all come with a high price tag.
The cost of the equipment required for production molding is not necessarily a barrier to entry, as most tool-shop owners generally make five- and six-figure investments for machine tool technologies. A very significant challenge is the cost and time needed to attract and develop a new set of talent. Just like on the tool-shop floor, where experienced and skilled journeymen are critical to success, the molding floor requires engineering disciplines, including process engineers, quality system administrators, mold setup technicians, material handlers, press operators and equipment maintenance personnel.
In addition, production molding also requires a significant investment in facility space—room for molding, assembly and value-added operations; space to store and dry the resins; warehouse real estate to store the product prior to shipment; and so on. That leaves the tool shop with two choices: either buy an existing molding operation or develop one on its own.
Oftentimes, the tool shop looking to grow into custom molding is one that is likely already dealing with a mix of customers—certainly the OEM/brand owner—and that appears to make the decision a logical one. For the shop whose long-time customer base is primarily comprised of custom molders, there very well may be (and perhaps should be) a reluctance to compete directly with the source of its core business revenues.
The plastics business landscape was a different animal 30 years ago. For the most part, OEMs (those without internal injection molding capabilities) regularly worked through their sources of part supply, leaving the decision of tooling strategy
to the chosen custom molders. The tool shop did not have direct contact with the OEM, and the tooling concept was primarily driven by what best suited the existing capacities and technical capabilities of the molder.
This was certainly not always a negative, however it did preclude the OEM from being exposed to and considering alternative tooling and molding concepts. By the early ‘90s, many OEMs were going direct to the tooling source, driving a focus on production through upfront engineering. This was especially true of companies whose product line’s success was based heavily on speed to market, such as telecommunication devices, computer accessories and storage, and other retail-based consumer items.