Inflation is at a level not seen in decades, supply chains are disrupted, and companies are struggling with workforce shortages – all these events are the perfect storm for price hikes everywhere you turn. However, this is an ideal time to start looking for waste and ways to reduce costs in systems and processes, including evaluating your plastic injection molding vendors to learn how they minimize costs without negatively impacting quality.
When we talk about cost containment, we are not talking about the price per part. There is a big difference between being price conscious and cost conscious. If you are looking at bids through the lens of price per part, you are comparing apples to oranges with regard to cost. Yes, that is important, but the total cost of ownership (TCO) is a better indicator of what you are really paying. When evaluating plastic injection molding vendors, you should consider direct and indirect costs of procuring the product but also costs incurred throughout the supply chain until it reaches your customer.
Each custom plastic injection molding project is unique and may have its own distinct costs associated with it. However, there are ways that your contract manufacturer can help you reduce these costs. Compare these areas to see where your vendor is impacting your total costs.
- Upfront costs
- Mold maintenance
- Lead times, delivery, freight, and logistics
- Program management costs
Upfront costs include the cost of making the mold (also called tooling) or mold transfer and repair if required. Mold costs are not only impacted by the base material but also the mold size and part complexity (tolerances, undercuts, etc.). Your injection molding partner should ensure your molds are optimized for your part.
Look for partners who understand the extensive planning that goes into a tool transfer and have a strong technical staff to ensure the process runs smoothly. Transferring molds may reduce upfront costs but be aware of downstream cost increases if the mold is subpar. It may need repairs that can add costs, or it may need to be replaced. Sometimes replacing old molds provides cost-saving opportunities in other areas. New molds can reduce downtime, scrap, and maintenance costs. The experience of the vendor can also impact costs when transferring a mold.
Having the right mold for your product is the first step in reducing mold maintenance costs. The second is to have a preventative maintenance program. This will ensure you get the maximum number of shots from your mold. Ask your plastic injection molder about the preventative maintenance schedule for the tooling and their machines. Even if your tooling is appropriately maintained, if their machine goes down unexpectedly, you could be facing delays, which will cost you.
Lead Times, Delivery, Freight, and Logistics
What is your plastic injection molder doing to shorten lead times? How are they compensating you if they don’t deliver on time? Make no mistake, long lead times and late deliveries increase your total cost of ownership. Look for a partner that is process-focused, eliminates variation in their systems, maintains a safety stock of raw materials, and has the free capacity to meet emergency orders. When you look at delivery metrics, keep in mind that this doesn’t take into account whether the correct parts and number of parts were shipped. Wrong and incomplete shipments add to your total costs.
If you are using or considering an overseas molder, there are additional considerations. Current shipping delays are creating uncertainty and higher costs for many companies. Even when shipping is running smoothly, you still have to figure in freight costs, duty, emergency airfreight, travel to audit vendor, and inventory carrying costs. Additional costs that are harder to predict but still carry risk are political instability and natural disasters. Using a re-shoring calculator is an excellent first step in helping you better understand how much off-shoring is costing your company.
The cost of poor quality is high – reworks, scrap, lost revenue, late orders, angry customers, overtime expenses, it all adds up. The risks are higher for mission-critical parts, those where flaws are not an option. Verify that your vendor has a robust quality system in place that includes preventative and corrective actions.
How your vendor manufacturers your product also impacts costs. Believe it or not, the type of injection molding machines can impact your costs. Electric machines are more cost-effective than hydraulic machines, which means parts typically cost less to make.
Redesigning the part can save money and make the manufacturing process more efficient. For example, redesigning the part to eliminate undercuts can significantly decrease production costs. When evaluating your vendor, ask what they do to increase manufacturing efficiency. Vendors that offer other services, such as design for manufacturing evaluations or just in time shipping, create additional value.
Program management costs
If your program isn’t being run efficiently, you may not realize it, but it’s adding costs to your program. If your vendor doesn’t respond or isn’t transparent, or if you call and you don’t get to speak to a person or a person that understands your account, you can suffer from delays, misunderstandings, and a disconnect between what you are expecting to receive and what you actually receive. Your injection molder should be treating your business as if it were their own and proactively looking for ways to improve your experience with them.
How Greenleaf Industries Contains Costs for its Customers
At GreenLeaf Industries, our goal is to maximize quality while minimizing costs for its customers. We do this by working with the customer to optimize part and mold designs, strip out unnecessary cycle time and labor, minimize mold complexity to reduce upfront costs and ongoing maintenance costs. Plus, we have one of the only all-electric plastic injection molding companies in the world. Because of their efficient nature, operating costs are lower and the quality is superior – visually perfect finishes, leak-proof mating surfaces, or speck-free clarity are not a problem.
Speaking of product quality, by performing a thorough, upfront risk analysis, using poka-yoke (mistake proofing) and control plans to reduce risks, and implementing lean manufacturing practices, we can control costs while ensuring your product meets your quality expectations.
We are so confident in our ability to provide a quality product on time that we offer these guarantees:
- If we ever fail to meet your quality requirements, you get 10% off the next shipment of that defective product.
- If your order is not ready to ship on the promised date, we pay for shipping.
If your plastic injection molder can’t make you these promises, they don’t have confidence in their ability to deliver – consider the potential costs associated with poor quality and late delivery. While the other guys make excuses, we make parts with quality, delivery, and cost containment in mind.