What is the payback on injection molding training?

By: 
October 16, 2017

Return on investmentMolding companies exist for two reasons: To make money and grow. They resist training because it costs money and they do not see the return on investment (ROI). In a previous article, I wrote about the need for improving the skill set of your people. However, I didn't show you the ROI.

To better understand the concept, let's personalize it. As your kids grow up, they want to learn to drive and take your car out by themselves. You invest time and money to teach them to drive. However, you generally forget to teach them something as simple as how to change a flat tire. Sure enough, you get the phone call in the middle of the night. What do you do?

Solution 1: You (hopefully) get dressed, go out and rescue your kids.

Consequence 1: You spend time and effort ruining a peaceful evening without them. Doing it for them has no ROI.

Solution 2: Have them call somebody to come out and change the tire.

Consequence 2: A tow truck will set you back some major bucks. A bad ROI.

Solution 3: Tell them to flag someone down and hope they will help your kid.

Consequence 3: Risky. At best, a negative ROI.

Solution 4: Previously, you spent some time with your kid in your driveway, showing him or her how to block the car so it won't roll off the jack, how to loosen the lug nuts before they jack the tire off the ground and change the tire.

Consequence 4: Your kids are a little late getting home. No problems. A positive ROI!

Solution 4 had two elements to it: First, you showed them the tools and techniques for changing a tire (training). Second, you had them actually do it, so if the situation presents itself, they can accomplish the task by themselves (hands-on experience).

This has relevance to the topic at hand.

There are, essentially, two types of molding seminars.

The public seminar. This is a relatively inexpensive all-day seminar. The consultant provides books, teaches, answers a lot of questions and hopes the attendees learn. But, this is like telling your kid how to change a tire but never having them actually do it in front of you. The best one can hope for is that the attendees will go back and apply what they have learned and not put the textbook and their knowledge in a filing cabinet and continue to do what they've always done.

While better than nothing, at the very best the ROI is slow to pay off. The best-case scenario is a 5% improvement in productivity.

In-house seminar. This is a two-day seminar. Day one is a class like the public seminar. Day two takes place on the production floor, where the students demonstrate to themselves that what they learned actually works. This mode has several advantages:

  • The cost per attendee is cheaper because you are not paying travel expenses for 10 people and so forth;
  • the “hands-on” portion is not in a test lab or a equipment supplier's showroom, where the machines are brand new—yours usually aren't—and the test mold will always make perfect parts efficiently—yours are usually slower than they could be and need improvement;
  • because it's done in-house, you get to pick the molds, machines and materials;
  • most importantly, your people make the adjustments, not the instructor.

"But," you say, “we have to do this on the weekend. That's overtime! You're going to make a lot of scrap doing the experiments! Where's the ROI?"

Having conducted many of these training sessions over the years, allow me to present three recent real-life examples. Company names are withheld at the request of the clients. And, by the way, I don’t mind working weekends.

Case one: A Tier 2 supplier to the automotive industry with fifty-plus machines and 20 attendees. We worked on four separate molds. Productivity improved between 11 and 35%, meaning less scrap and/or better cycle times. The average improvement was 27% based on annual part requirement volumes.

Case two: A custom molder with 12 machines and six attendees. We worked on three molds. We found that we could run one mold in a smaller (less expensive) machine and improve the cycle by 15%. With the other two molds, we averaged a 23% improvement in productivity.

Case three: A fast-growing medium Tier 2 molder with 20 machines and 10 attendees (tech, management and a quality inspector). We got a surprising 31% improvement! (In all honesty, though, I don't expect that kind of improvement to hold throughout the entire plant.)

In case one, the automotive company hired me. As soon as the results were posted, their buyers came down like a pack of wolves, demanding price reductions to pay for the training and telling the molder to make its profit from its other customers. (Ouch! Nevertheless, I do not blame them even though I warned the molder about this before we started.) In cases two and three, the molder hired me. This is just good business thinking.

The company in case three had some very smart money people. They shared this tidbit with me: If you save one second on a cycle, it is equal to $2,000 per year in extra profit/income. This is the combination of lower cost on running a job and the gained opportunity of putting an additional job into the press using the time saved.

Show me the money!

In each of these cases, we saved significantly more than one second. So let's be a bit ridiculous: For a two-day training, let’s assume the total cost—salaries and overtime, training, intentional scrap made during process optimization and so forth—was $15,000 (it is usually less than half that). You have 10 machines and your (conservative) average cycle time savings alone was 3 seconds (we'll ignore the savings from scrap reduction, etc.). That is $6,000 per year/machine times 10 machines equaling $60,000/year in cycle time savings alone for your shop. This works out to a 90-day ROI that is usually much better than you will see buying new equipment! In the three aforementioned cases, the costs were much lower and the savings higher. Their average was a 16-day ROI for the “expense” of training.

Remember, it is your people who make you profitable, not your equipment. Crunch your own numbers and think about training

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 bill4012@hotmail.com.

Tobin will be holding seminars in Kansas City on Nov. 14 and St. Louis, MO, on Nov. 16; Salt Lake City, UT, on Dec. 5; and Providence, RI, on Feb. 15, 2018. You can register through the website. He is also available for in-house seminars. For more information, contact Tobin via e-mail, using "seminars" in the subject line, or go to www.wjtassociates.com.

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