Total cost of purchase

Have you ever thought to consider the total cost of buying plastic mouldings? Often the focus is purely on the cost per part, but this is only one part of the total cost that you will be exposed to. Here is our guide to reducing your total cost of ownership: -

Design cost

Designing the plastic part should be simple, right? Well, there are huge range of factors that will impact the overall cost. Factors such as material choice have a huge downstream impact on both tooling and manufacturing cost, as does post-moulding operations such as machining.

Our recommendation? Engage your supplier early in the design phase. A good supplier will have in-house design capability and will help optimise the component from a cost perspective right from the start.

Tooling cost

Tools are a commodity item and should be bought as cheaply as possible, right?

Well, not really.

Tooling is expensive to manufacture and it is sorely tempting to buy the least expensive. This is generally a mistake. Tools are complex to manufacture and difficult to change once the tool is made. Manufacturing the tool overseas can involve frequent visits to the tool manufacturer during the design and commissioning phase, an expense that can rapidly overshadow the cost of the tool.

Moulding tools are subject to incredible pressures of between 10,000 – 30,000 psi and therefore prone to wear and tear. The tool needs to be manufactured with the appropriate material to meet the polymer in question and will need regular maintenance. Buying a cheaper tool often means a cheaper material. You will initially pay less, but eventually you will pay more when you have to replace it due to premature wear and tear.

Our recommendation? Ensure you are familiar with the differing materials used to manufacture the tool. Ask your supplier who will maintain the tool, and at what cost? And if you source direct overseas, ask for guarantees that your travel costs and time will be paid in full if there are iterations in the tool design that require you to visit.

Supply chain cost

Volume manufacturing requires significant commitment to material stocks. Sourcing parts overseas often means a serious capital outlay to finance not only the work-in-progress, but also the 6 – 12 week period for parts to be shipped in. Factor in global logistics issues (volcanoes erupting, nuclear incidents, weather and so on) and the financial commitment to supporting long-distance supply chains compared to a local supplier can be wildly unpredictable. And have pretty serious impact on your cashflow…

Our recommendation? Calculate the true costs of financing a long-distance supply chain and compare against sourcing locally.

As you can see, the true cost of ownership potentially far exceeds the most obvious focal point, i.e. tooling cost and cost per part.

Our blue chip customers return to us year after year for one reason – we are experts is minimising total cost of purchase.