Molding tricks for higher profits, part 6: Beating your customers at their own game

As I wrote in previous articles on this topic (links to parts one through five are at the end of this piece), the injection molding business is really all about money. Your customer couldn't care less if you're losing money. In fact, he'd prefer it because it keeps you hungry and, as he'll always tell you, “There are a dozen guys in the lobby who'll run your jobs cheaper and faster and make better parts!” What you missed in this verbal assault was, if that were true, you wouldn't have been given the job in the first place.

How do you protect yourself? With a policy manual. When you look at the language on a PO from one of the Big Three, you'll see that the rules of this game are highly stacked in their favor. There is no need for you to agree to any of it!

Send your policy manual as an attachment with every response to an RFQ. Only accept the job when the customer agrees to your policy.

Exit strategy. Write a policy that, in its simplest form, creates an exit strategy for your customer. He pays for all outstanding invoices, raw materials, work in progress, custom packaging, finished goods and so forth in cash before you'll hand over the mold.

Ownership. Anything manufactured under the auspices of a PO and duly paid for belongs to the customer and will be shipped with the tooling. Anything you paid for belongs to you and does not have to be given to the new molder (this is especially fun when you don't give the other guy shrink fixtures). If the buyer insists you sell him all the secondary jigs and fixtures, do what a Chinese molder did when one of the Big Three tried to pull a job: He calculated the profit he should have made from molding the parts, added in 10% to cover the costs of the jigs and fixtures and used that as the sale price for giving everything up. (Cute, yes?)

Intellectual property. Customers are not allowed on the production floor to observe production. They have purchased only parts; anything else is stealing your secrets.

Pricing. Don't accept a release from a blanket PO until you are using up-to-date resin pricing. Each time you get a release, respond with a new price quote based on the material. Don't begin the job until the buyer has agreed to the new pricing structure.

Tasks. A favorite trick of the automotive business is to assign tasks, such as, "reduce costs by 5% overall in the next six months." The threat is that if you don't, they'll pull the jobs. Certainly, send in proposals, but also add in the costs you'll incur. If they don't pay for them directly, don't do it! If they want to “amortize” the costs in the part price, don't ever believe there will be enough production to cover the costs and still give you a profit. This is a buyer's trick—don't fall for it.

Quality. The definition of an acceptable part is one that does what it was designed to do and is visually acceptable. It is not a part that has all dimensions to print and is totally free of any visual defects. There is no industry standard requiring viewing something under magnification and harsh lighting for several minutes. Make that part of your policy manual. The only cause for a reject will be a functional test, not a dimensional inspection.

Your policy on a questionable reject should be written out:

(Yeah, this is a nasty trick. This process will take several weeks. You are innocently trying to correct the problem, while your customer's production has come to a halt. What will usually happen is that the “reject” will disappear.)

Your operation

An idle machine is a taxicab waiting at the curb with the meter running. Setting up a new job shouldn't be something you “squeeze into" normal operations.

Maintenance is key. Each machine should be capable of running any mold that's scheduled into it. If the machine is old and tired, either get it rebuilt or sell it. Molds wear out. Don't tolerate blocked off cavities. When you purchase a mold, design it to be maintained with front-loaded cavities. Purchase spare cavities initially. It's more profitable to swap out a cavity in the press than go down for a few days to completely disassemble a mold and replace a cavity.

Use portable dryers, micro hoppers and purging compounds. Profit wasters are letting the machine sit idle while the material dries. While purging compound may seem expensive, it's cheap compared with the material and time you waste flushing the machine with regrind.

Staging. Think of a mold change like setting up a play at the Super Bowl. While the play might be brilliant, it turns into a farce unless everyone is in their place and knows what to do. Before a mold change, someone must be accountable to have everything ready. You're throwing money out the window if someone wanders around looking for a wrench, you have to make up a water line or can't find the appropriate packaging materials

Qualifying the mold. Never run a mold in production if you don't know what it will do. Take the time when you initially run it to work out all the variables. Your production folks should be cooks: If they follow the recipe properly, the results are always what you'd expect. The crew who qualified the mold are the chefs—everything should be both understood and written down. There are no magic setup tricks—there's no notebook in a tool chest with secret settings.

Quality. There's no magic in quality: Either the part is acceptable (“to print”) or it isn't. If the customer gives you a “deviation” to accept parts he would normally reject, he just changed the quality standards. Accept the deviation as “one-time-only.” Don't run the job again until the designs have been permanently modified as an engineering change. Make sure everyone in your facility and the customer has the same view of what is “acceptable.”

It's your choice.

Bill Tobin is a consultant who teaches seminars and helps clients improve productivity. He can be contacted at www.wjtassociates.com or by e-mailing him at [email protected].

Read the previous articles in this series:

"Molding tricks for higher profits: The expert syndrome"

“Molding tricks for higher profits, part 2: The philosophy”

"Molding tricks for higher profits, part 3: The mold"

"Molding tricks for higher profits, part 4: Filling the mold"

"Molding tricks for higher profits, part 5: Cooling the part"