Of the 71 respondents, 63% were moldmakers, 36% manufacturers of dies and 1% suppliers of jigs and fixtures. Thirty-three percent of the respondents had annual sales of $5 to $15 million; 31% had sales of $15 to $30 million; 9% had sales of $30 to $50 million; 12% had sales of $50 to $500 million; and 14% had sales of less than $5 million.

One of the more interesting findings was that more than 50% of shops now have more than half their business on progressive terms, up from 47% in the January tooling barometer. That's the good news. The bad news is that only 39% receive more than half of their payments within the terms of the purchase order, down from 61% in the January report.

That jibes with what I've been told by automotive moldmakers, who have said that the "rumors" about the big OEMs being more cooperative—a kinder, gentler OEM—were just that, rumors. The reality, I've been told, is that the automotive OEMs are up to their old tricks now that things have come back from the recession.

For smaller shops, the news is pretty good. The survey shows that they are seeing more on-time payments than larger companies. Mold shops are also in luck—they are paid on time slightly more often than the die and jig and fixture shops. "Payment terms are improving but payments are not improving at the same rate," said one respondent. Another noted that, "terms are being extended to include [the condition] ‘Paid when customers paid.'"

Yet another respondent to the survey said, "Many of our biggest customers make no effort to pay when due. It can take months and many, many hours of administrative and senior management time after payments are due before we collect."

That's long been a thorn in the side of moldmakers. They are typically Tier 2 suppliers who produce molds for a larger Tier 1 supplier. The Tier 1 will pay the moldmaker when the OEM pays the Tier 1. But the problem with that has been that the Tier 1 doesn't tell the moldmaker when the OEM pays. This results in the moldmaker's accounts receivable person having to chase payments. It's sometimes the case that the Tier 1 or the molder will use the money they are paid by the OEM for their own operational expenses, leaving the moldmaker hanging. Honesty and ethical behavior isn't real common in the automotive industry.

Which brings us to the next interesting part of the survey: Sixty-three percent of shops surveyed say they implement "complexity factor" charges (an average of 14%) on customers for a variety of reasons. Ninety-four percent charge a complexity factor for "unreasonable product standards"—i.e., quality expectations and the complexity of the tooling. Sixty percent charge a complexity factor for customer disorganization—"functional weakness of the customer, lack of decision making and disorganized processes."

Fifty-one percent add that fee to customers who do not adhere to payment terms. Thirty-two percent charge for unfair and dishonest practices, which include "changes in requirements after the job is released, not honoring commitments, and unethical behavior." Another 26% say that a complexity factor will be charged for a lack of resources, requiring too much paperwork and time.

Unavailability of tooling data or incomplete tooling data at project kick-off will result in a complexity charge from 17% of the survey respondents. This often results in a delay in the project's kick-off, and 15% of the respondents say they will charge a complexity factor for a lack of lead time to finish the project. In fact, the survey showed that 77% of shops have more than half of their projects delayed over two weeks.

Part concessions were most frequently cited as the reason for program delays. The second leading reason was no purchase order. "Despite frequently getting no PO, 53% of shops report that delivery due dates are only ‘rarely or sometimes' adjusted by customers while waiting for the PO."

This is a complaint that I've heard from moldmakers for years! Delays in getting complete tooling data and obtaining an official purchase order will often eat into the lead time of a mold by as much as two weeks to more than a month. However, the due date for the mold doesn't move. The moldmaker is still expected to adhere to the stated delivery time, regardless of how much time the customer eats getting the information and the P.O.

One respondent said: "There seemed to have been more delays than usual. Outlook remains fair but actual is what scares us."

The survey also showed that, on average, 23% of jobs were kicked off during the previous four months (January through April) without a PO. Thirty-three percent of jobs were on hold for the 1 to 10% category of respondents, while 26% of jobs were on hold for the 11 to 20% tranche.

Harbour Results commented on this revelation: "Based on the industry size, that's like having $1.7 billion, or approximately 80 tool shops, sitting idle at any given time (along with more than 10,000 people who work in those shops)."