July 14, 2022

Building injection mold in China and saving 30%

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I started building injection molds in China, Taiwan, HongKong, and Portugal back in the late 70’s. This was when I lived and worked in the US and the molds were to run production in the US. The very same injection molds were quoted by our US and Canadian companies. All included in the analysis of “do we or don’t we” build off-shore we always included landed cost in the US, engineering onsite support, sample costs, sample shipping costs, plus anywhere from 10% to 20% add on contingency for final work in the US, depending on the particular mold supplier and our history with that supplier.

All the above being included, if we could not show 25%-30% savings by building the injection mold off shore, it stayed in the US or Canadian mold companies. If the total cost of owner ship is negligible, you certainly shouldn’t build it on the other side of the planet. You need to justify the decision based on economics, it’s simple.

I moved to the EU, Portugal, 8 years ago working in the injection mold industry and in the past 3 years I’ve spent nearly 50% of my time sourcing molds from China for US and EU companies: VW, BMW, Benz, Bentley, Porsche, Lamborghini, Maserati, Fiat, Peugeot, Melita, Bosch, BHTC, Valeo just to name a few, because they won’t pay the price in their own country or Portugal. I’m surrounded by injection mold shops and cannot use them because of pricing. But even those companies do a very similar cost analysis before they push me to China with it.

There seems to be this fallacy that if you throw high end machining centers and high end engineering software at a mold, you can build it cheaper and faster. All that technology comes at a price. The investment of education and maintaining the technology. This has to be factored into the operating cost when offering a mold price. Unless a company is willing to operate “Lights Out” for free, there must be some payback benefit to going this route. I have even invested in cameras to monitor lights out operation on my injection molding machines and CNC machining centers in China, with the belief it is better to have fewer well trained employees to keep cost contained than having a boat load of people “baby sitting” machines. But still, I have gotten my clock cleaned on quotes by some shops with boat anchor low end CNC equipment and scab aluminum plate, but was better connected with the customer, thus got the business. Sometimes it is not WHAT you know, it is WHO you know. Some companies get a premium price for building injection molds and it is what it is. All I say is good for them if they can get it. Sometimes the margins are not worth the effort.

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