Using a Network of Outsourcers Concurrently Helps Moldmakers Shorten Delivery Times

With demand at an all-time high for shorter delivery times, many moldmakers feel finding the latest equipment is the answer to accommodate their customers' needs. However, staying current with the newest technology isn't the only way to speed the mold design process. Just ask Chuck Digney of United Technical Products, Inc. (Fallsington, PA), a custom moldmaker and electrical bobbin manufacturer. He has been implementing his own strategy, which he describes as basically changing the way molds are being built.

"Right now, a customer comes to a moldmaker with a print and says, 'I need a mold built that will produce this part.' The moldmaker then spends anywhere from two days to two weeks agonizing over the quote, trying desperately to arrive at a price for the tool that is both reasonable in cost and still profitable," says Digney. "They will have a lot of expensive equipment that they feel must be used because it's there. So they will skew their design and build thinking to utilize that equipment. Everything is done in a linear fashion: step one has to be completed before step two can start; and it takes a long time to complete the process. Depending on the geometry of the part and cavitation required, you may be looking at 12 weeks or more to see samples from the completed tool.

"Once the moldmaker is awarded the tool, he feels he has to build the entire tool himself," Digney continues. "He doesn't want to lay out any money to outside vendors if he doesn't have to. The problem is, he will customarily get 50 percent of the price of the tool upfront and won't receive the balance of the money until the parts that the tool is supposed to produce are approved. That may take 60, 90, 120 days or longer and also may involve some re-tooling or re-engineering, which would involve more costs to outlay. When the toolmaker does get his money, what little profit he's figured on receiving is already gone. Plus, he hasn't had the use of the money for that whole period of time."

The Proposal

Digney proposes that the moldmaker break the tools down into subcomponents. According to him, there is no reason for the moldmaker to build a mold base or to even think about machining one out because of the number of companies that specialize in this. "When I quote a tool, I'll try to fit it into a pre-engineered base or I'll have the mold base company quote the machining for me. When the base arrives all that needs to be done is to fit the cavities and cores. That way I know upfront what the cost of that base is going to be, and I know I can get that base in-house anywhere from two days to two weeks," Digney says. "I can factor that into my leadtime and then break down my job further."

The next thing Digney did was establish a network of designers and vendors that specialize in a certain aspect of the mold building process. If there are several shops working on the same job at one time, that job can be turned over quickly. "I'll tailor the parts of the building process to each vendor's strengths," he says. "They can concentrate on manufacturing that portion of the tool that best matches their skills. Then I pay them within 15 to 30 days, which keeps them happy because they have cash flow. They don't have to lay out a lot of money to complete a job. Because they are paid so quickly, they will do my work before someone else's and hold their machinery open for me.

"Shops are actually selling machine time," Digney continues. "If they don't keep their machines running and filled with work, they are not making the money they could be. By potentially being able to run their machines 24 hours a day, they are making the maximum amount of money they can with that machine."

Currently Digney uses four vendors, which he says allows his company to reduce leadtime from 12 weeks to seven to eight weeks and leave them to do what they do best - final fit and assembly. "I'll do all of the logistics and spread the work around," Digney explains, "then all the vendors have to do is concentrate on what they do best - manufacturing first class tooling. The whole thing really boils down to supplying their machines with enough work to keep them running and profitable. I look at it as though these machines in the different shops are mine to use and that it's my responsibility to keep them fed with work."

Using the Internet

A website is currently under construction that will further streamline the process. "It will consist of two parts - the customer side and the vendor side," Digney explains. "The customer sends to the website drawings or parts that need to be quoted. I'll quote them based on the schedule that I know my vendors are under at that time. If I have seven shops I'm trying to feed work to, and shops two and three are finishing jobs and I think they can handle this particular job, I'll make sure I quote it based on their shop rates. That way, when I'm awarded the tool to build, I'll know where it's going and whose folder to place the work order in. All of the planning and logistics are done."

The vendors will only have access to their folders for their work, according to Digney. "I'll also communicate back to my customers through this site," he comments. "The status reports, engineering changes, tool designs - everything. The tool designers will also use this same site. I'll target the design to the strengths of the individual designer. There is no reason to send conceptual work to the designer whose strength is in the detail work and vice versa. I just divvy up the jobs based on the talent I have as far as vendors go.

"This will allow me to use five, six, even seven shops as my own - so to speak - and target the complexity of the job to the caliber or experience of the vendor and what I know they like to handle," Digney adds. "I'm not going to send them lathe work if they don't like to do lathe work."

The website gives competitors the opportunity to coexist peacefully, Digney maintains. "They've had to trust me with their shop rates and trust me not to give out their information to their competitors," he says. "I'm not going to blow that trust I've established with these vendors. And, although all of these guys in the 'cooperative' are competitors and free to get their own work from whomever, they all work together to complete the tools. They know that keeping the machines running and the cash flowing is better than worrying when the next job is going to come in. They know they can trust me. If I do anything to corrupt that trust, I'll never get another tool built by any of them, and rightly so."

Changing Times

Digney acknowledges the most difficult obstacle is changing people's minds. "In the past, everybody felt the need to grab hold of a job and keep the whole thing," he states. "We have all had to learn that that is not as profitable as it can be, and only adds to the leadtimes."

Being fair with the work distribution is another key factor in changing the mindset. "I've had to reassure my vendors that if vendor A's quote rate is $65/hour and vendor B is $60/hour, I'm not going to exclusively use vendor B just because he's cheaper," Digney states. "I'm going to make sure I spread the workload out among all of the vendors and I don't do it based on price alone, I also base it on skill level. Therefore, everybody has a chance to have their hands in the pie, everybody gets a little piece, and that's better than one big piece."

The bottom line, Digney concludes, is that his vendors and his customers are satisfied. Since implementing his program, United Technical has kept its vendors busy and allowed its customers to get their products to market quicker by reducing mold delivery times. "We are working smarter, using time more efficiently, and are able to juggle more jobs at the same time," he affirms. "I see us together as changing the face of tooling as we know it today!"