How to Determine the True Cost of Your Molds
When considering the purchase of a mold, the wrong question is "What is the price of this mold?" The right question is "What is the total cost-to-manufacture for this product?"
Every mold has a price—the figure quoted to you on the bottom line of the RFO. That price is a "good faith" estimate and includes the hard costs of design time, raw materials, mold components, programming and machining time.
The cost of a mold includes many more factors that aren’t always measurable in terms of the actual mold build. These include mold construction techniques involving the expertise and creativity of the mold builder that can result in vastly reduced cycle times, which can equate to a tremendous manufacturing cost savings over the life of the product.
Thus, the true cost of the mold is more than the price you agreed to pay on the RFO. The true cost of the mold includes all of the costs-to-manufacture.
Why this misunderstanding? Steve DeHoff, a former purchasing and plastics engineering manager at Procter & Gamble for 18 years, says, "Typically, buyers see molds as incidental commodities, similar to cutting dies, rather than as the strategic link to product cost, quality, time and performance that they are in injection molding."
The bottom line is, you may pay more up front for a mold designed and built for optimum manufacturing considerations, but in the long run, the total cost to manufacture the product will be considerably less.
Things to Consider
Maintenance Costs of the Mold
Maintenance requirements on an offshore mold are often greater than those for a U.S.-built mold. Downtime is critical because lost time is lost production, which is costly. Also, some U.S. mold manufacturers offer mold maintenance programs to help you keep the mold in good working order throughout its life. Remember, shipping the mold back to your offshore source for repairs or rework is generally not an option.
Life of the Mold
You want a mold that lasts for the life of the program or for the number of shots that are standard for the type of mold you purchase according to SPI standards.
Shipping Costs
Rework Costs
Many who purchase molds offshore for U.S. molding say it takes about 10 percent of the purchase price of the mold to an offshore-sourced mold up to U.S. production mold standards. Thus, if you pay $50,000 for a mold from an offshore source, you will probably put another $5,000 into the mold to get it production-ready.
Engineering Costs
If you send a tooling engineer to Asia or Europe to oversee the mold build, an additional 20 to 25 percent can be added to the cost, say tooling engineers. This cost includes time lost on other engineering projects while overseeing the project offshore.
Communication Costs
One consultant for offshore mold purchasing says he spends as much as $5,000 on communications including phone, faxes, overnight prints, etc. E-mails cannot always be counted on to be a reliable means of communication in some foreign countries.
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