Q&A: What constitutes on-time mold delivery?

A member of the American Mold Builders Association wrote: "One of the most costly factors of mold building is overtime. We, as mold builders, have always taken pride not only in our workmanship but also in meeting our delivery commitments. Our industry is unique in the fact that based on a quote; we will work overtime to meet a delivery deadline, in many cases with little or no cost to our customers. How did we get to this ridiculous point? Why paint ourselves into a corner by promising a delivery or accepting the almost always short lead times demanded by our customer?"

The writer, obviously a moldmaker, raises a good point. In an attempt to answer his criticism of the industry, IMM interviewed Bill Kushmaul, a member of the board of directors for AMBA and president and CEO of Tech Mold Inc. in Tempe, AZ.

IMM: How did moldmakers get to this ridiculous point?

Kushmaul: Once the moldmaker gives a delivery date, he'll pull out all the stops to meet this date, regardless of whose fault it is that delays have occurred.

IMM: Who is responsible for seeing that delivery dates are met?

Kushmaul: The moldmaker has the responsibility to deliver the mold on time, but the customer must facilitate this by providing the minimal information required to accomplish the mold build in the quoted time frame, i.e., providing a clean database or a design that he or she is certain is the one he or she wants built.

IMM: Describe what the perfect scenario is.

Kushmaul: In a perfect moldbuilding world, the OEM's design engineer contacts a pre-selected moldmaker based on the shop's ability to design and build molds of this particular type and size: a shop that has proven its abilities both technically and in terms of meeting price and delivery time.

The customer's designer then works with this moldmaker on a concept design to meet the requirements of the molded part. A part design is developed in conjunction with the customer's designer and is then approved by the customer. Based on this design, the moldmaker then submits a bid for the cost of the mold and the delivery date. Both the price and delivery date are based upon the preliminary design being final and all the information for the mold design being accurate.

It is also based on the moldmaker having access to all areas to be machined, and not being restricted in any area because final dimensions are still being determined by the customer's designer.

The customer provides the moldmaker with an electronic file that contains a clean database or finalized, approved prints. The moldmaker is able to proceed with the mold build without restrictions or limitations in primary areas of the design.

The mold is then built with only minimal changes along the way, and any changes that do happen come about in a timely manner and don't affect areas in which steel has already been cut, nor do these changes affect in any significant way the number of hours quoted to build the mold or the delivery date.

IMM: How does it work in the real world?

Kushmaul: The customer's designer provides a preliminary part print from which several moldmakers bid the job. Each moldmaker pours over the part print and determines the best way he would make this mold, noting exceptions, changes, and dimensional problems and also making suggestions.

Based on this, each moldmaker puts a price and delivery date on the mold. Each bid will be different, sometimes only slightly different and sometimes vastly different, depending on how close to being equal the mold shops are that are quoting.

The customer then chooses a mold shop based on price and delivery--usually the lowest price and shortest delivery. He or she then provides the moldmaker with an electronic file that requires significant time to clean up or a part print that is still in the preliminary, unapproved stage and tells the moldmaker, "We'll finalize design as we go along." This is what they call concurrent engineering.

The moldmaker is restricted and told to stay out of certain areas of the mold until a dimension can be determined or a change approved by upper management. The moldmaker attempts to work around these areas, but many times they are crucial areas that need to be addressed early in the build. Delays in approval cause delays in the mold build process, which then becomes the moldmaker's problem.

Changes that require recutting steel, rebuilding electrodes, or otherwise redoing work come from the customer at different stages in the mold build. The moldmaker is put on hold while changes are being approved by the customer.

Again, this becomes the problem of the moldmaker who has to stick to the delivery date.

IMM: What can a moldmaker do to protect himself from this real world scenario being played out time and again?

Kushmaul: The part print and database always contain issues.

Thus, the quote needs to be broken down into the same areas in which issues might affect the price and delivery, i.e.: 1) clean up database = X weeks & price; 2) design mold = Y weeks & price; 3) build mold = Z weeks & price.

If nothing interrupts the mold build, we have an obligation to build the mold in X+Y+Z weeks for X price. If the customer is intimately involved in designing and decision making, there will be delays. Any changes, corrections in design errors, or the like have the potential to cause delays.

IMM: What is the most crucial part of the mold build that affects delivery dates?

Kushmaul: There was once an advertising slogan for a filtered cigarette (when cigarettes could be advertised on TV) that said, "It's what's up front that counts." We need to make that the moldmaker's slogan. Truly, the front-end portion of the mold build is crucial to making the quoted delivery date.

IMM: Often OEMs are slow to release P.O.s. Are there misconceptions about shop operations that cause customers to drag their feet when it comes to releasing P.O.s?

Kushmaul: Many customers believe when shops quote a lead time, moldmakers are standing around waiting for them to release the purchase order, even if that doesn't happen for another month after the RFQ is submitted.

We need to emphasize more to our customers that our business changes on a daily basis. One week we're slow and looking at available machine time. The next we've got so many P.O.s coming in the door that our lead times begin to look impossible.

The goal of a good mold shop is to have steady work flow. That's one answer. Our only defense against slow times is to have some backlog of work at all times. We can't afford to have people standing around waiting for a purchase order. If we did, we'd have a lot of dead time, and our overhead would go through the roof.

Yet we quote based on our shop load at the time of the quotation, not on the shop load when the P.O. is ready to be released.

IMM: What is your answer to this dilemma?

Kushmaul: We need soft queue time. That is, small time slots that allow us to absorb small delays in getting a P.O. or part design approval. If we have enough time set aside for this soft queue time, those things that are beyond our control won't get the best of us. Yet customers tend to look for shops that are empty without realizing an empty shop is an inefficient shop. A shop that is maxed out isn't efficient either, and that's when the costly issue of overtime to meet delivery dates becomes critical for a company.

IMM: Often moldmakers won't approach a customer with a new delivery date even if considerable delays have happened. When should a moldmaker pay penalties for a late delivery?

Kushmaul: Only when the late delivery was caused by something the moldmaker is responsible for. If the customer caused the delivery schedule to slip due to indecision on design, dimensions, or late approvals, no penalties should be incurred by the moldmaker.

IMM: What can moldmakers do to help their customers understand all of this better?

Kushmaul: We need to educate our customers better in how our business operates. One of the most important things we can teach them is the relationship between price and value. The value of the mold to the OEM's new product can't be underestimated, yet too many people see the whole moldmaking process as a royal pain.

Many detest dealing with moldmakers because they don't see the value of the moldmaker's product. The price of the mold reflects the value the moldmaker brings to the table, i.e., his expertise, knowledge, talent, machine time, and the technology in which he has invested.

Secondly, we need to tell our customers that the biggest interference to the mold build process is their wanting us to stay out of certain areas of the mold while they're deciding on design or dimensions. They need to know the mold build is a process that involves the entire mold; it's psychologically damaging to the process to hold a moldmaker back from an area, restricting him or her to working only on one area. The moldmaker feels he or she is being handcuffed and gets paranoid about the mold build.

It may be a subtle thing, but it creates a paranoia in the shop. After all, one or two dimensional changes can affect the whole tool. The moldmaker becomes uncertain of the rest of the tool if he or she doesn't have access to the entire thing at one time.

We must educate our customers that the more they intervene during the mold build, the more this affects price and delivery. It's the moldmaker's responsibility to inform the customer as early as possible of additional costs or delivery time.

Whenever the customer calls requesting a change of any kind, the response should be, "This may result in a change in price or delivery. We'll review it and get back to you later today with how this change will impact either or both of those."

Then follow up with a memo by fax or e-mail the customer to cover yourself if there's ever a question. It's the moldmaker's responsibility to get with the customer early when there is a problem from the moldmaker's end.