I was at a client's once whose big problem was sinks, short shots and stuck runners. Two minutes into looking at the mold it was obvious the runner was too small for its length. The material was cooling too quickly. There simply wasn't enough pressure left to fill and pack out the parts. The tool designer even told me his Dork simulator program said the runners needed to be larger. Wanting to earn my fee I explained what was wrong then got banged in the head by the response. “The runner system already is 10 percent of the shot. That's all we're allowed to use as regrind. We can't open up the runner system.”
Is a low-producing, nonprofitable job doing you any good if you're only worried about regrind? Who said 10 percent had to be the limit. Has anyone tried 25 percent to see if anything happened? Losing money but holding the regrind limit is silly. I might as well have been talking to a tree stump.
Another client came to me with a trail of tears about not meeting his client's cost model for pricing. Excuse me? Some nonmolder has a formula and is telling you your costs? OK, that's the hand he was dealt. I get on the telephone and call the guy with the formula. How old was it? (A few years.) Where'd they get the machine/operator costs? (An algebraic back calculation from pricing and price increases only due to resin costs.) What was the material cost? (An assumption of the current price of material that didn't account for storage, loss, scrap or shrinkage.) What was the production assumption? (Zero setup cost, 99.99 percent press efficiency, zero scrap.) Where'd they get this “formula”? (Cost accounting came up with it, thank you.) Amazing, no sense of reality. I silently wondered if their in-house manufacturing model was based on the same assumptions.
Client No. 3 was building a 32-cavity mold for small parts. Odd, he was using a conventional runner system. Why? He could only get the job if the tool budget was low. A multidrop full hot runner or combo hot-runner mold was too expensive. I called the buyer who'd placed the job. Yup, that was his story and he was sticking to it. I asked who bought parts. I got the SOD excuse (Some Other Dude). OK, I call the guy who buys parts and offered him a 50 percent reduction in part cost if he could talk to the guy at the next desk who bought tools. For the savings in the first two years we could have purchased four more of the non-hot-runner tools. The simple hot-runner combo tool had a return on investment of three months.
There is a hilarious sense of silliness when companies try to dictate costs to their supplier community based on “models.”
How do we deal with this situation? This is a matter of protocol and education. By protocol you are required to deal with your assigned buyer. Going over the buyer's head is poor form. However, putting on a small PowerPoint presentation for the purchasing department showing them a “better” way to do something and not trashing their system will work wonders.
What if you presented a “total profitability” presentation that pointed out that if your customers worked toward the goal of lowering their lifetime project cost instead of pimping up the individual buyer's reputation everyone would save money? It might require a little rethinking by creating (dare we say it?) a purchasing team. If the buyer's bonus system is based on how much money they save the company, they might see a bigger bonus working together.
Eliminating false economy. What a concept.
Bill Tobin is a consultant and owner of WJT Associates, in Louisville Colo.