China vs. US Made Injection Molded Products

Time is money in the global economy. Finding every way to save investment money and reduce project time is one way to stay ahead in business. There are many ways to reduce costs, and often the lure of sending your business overseas to China looks very tempting. If you’ve thought of sending your injection molding business offshore, you may find the results aren’t what you expect. Or if you have a mold offshore now, you may want to bring it back to US soil. In either case, we’ll discuss what can happen with offshoring and how to recover your assets.

Outsourcing is Part of the Business

For years, outsourcing has become just a standard part of the business. It doesn’t matter the industry. Pick one and it has a low-cost country that specializes in making their products at a reduced cost. For injection molding, China has been a leader in making the molds based from U.S. designs. Design houses in the United States engineer the products and send detailed sketches or raw data files overseas to a lower cost manufacturer to turn the designs into an injection mold. From there they typically mold and/or assemble the products and ship them back to the United States on a freighter. At the best of times, this can be a good business relationship. What happens when that relationship hits a few bumps?

The Logistical Challenges of Outsourced Business

Outsourcing to a volume manufacturer in China may seem like a good business decision but sending your molding business overseas may bring more headaches than you are expecting. Here are just a few of the problems we have seen with offshore injection molds:

1. The tooling vendor has given false answers when questioned because they really just wanted your initial business.
2. The quoted amount was very low, but the final amount for the tooling was significantly higher due to cost overruns. Chinese quotes can often leave costs associated with warehousing, translators, shipping, and insurance off to stay attractive.
3. The finished mold isn’t made from high-quality materials and creates below average products. There have been cases that the product required a significant safety protocol that wasn’t adhered to requiring a later product recall.
4. The tooling is unpredictable and only works a portion of the time. It may require a human operator to remove the parts from the mold after molding since labor is very cheap in China.
5. The shipping quote has many delays due to political tensions between China and the United States, and your products are constantly held up at a port in China or outside the U.S.
6. Your molding partner doesn’t have the same work standards that you expect, and they refuse to give your molding tools back when requested.

How to Re-shore Your Injection Molding Business

If you have run into any of the problems listed above, you may want to bring your injection molding tools back to the United States. The cost of international trade is starting to become a problem in some cases with raw materials becoming harder to find and importation laws adding layers of restrictions.

If you previously off-shored molding dies, manufacturing, or assembly to China in the past, you may be ready to re-shore your manufacturing. The U.S. government has proposed a fund to support businesses with bringing their tools back from China, but funding may not be your problem. You may need boots on the ground in China to recover your tools and assembly equipment, and SEA-LECT Plastics has just the program to support recovery efforts.

SEA-LECT Plastics created the INJECTION MOLD RESCUE™ recovery service to prevent expensive tooling from being held hostage overseas. We have partners on the ground in China that can show up to demand the tools and equipment. We have a better chance of success to bring your injection molds and equipment back to the USA. Our American partners in China speak their language and know their etiquette. Once your mold is in our possession, we can evaluate its condition and give you a quote for any repairs, cleaning, or modifications necessary to bring them up to the American standards for injection mold tooling and safety.

Items we typically find with molds recovered from China:

• Unless you specified what standards or mold classification to follow in your contract, molds which stay in China are often not built to any specific standard or mold classification.
• Molds that stay in China often have no coverage from a manufacturer’s warranty.
• You may not even own the mold because although you paid a “Tooling Charge”, you have not become the owner of the mold automatically. You need to review your manufacturing agreement or quote for details on who owns the mold.
• Even if you own your mold outright, more than likely your mold must be cleaned and modified to comply to American process and safety standards.

The Benefits of Using American Injection Molding Businesses

At the beginning of your quoting process, you need to make the decision to manufacture your tooling and equipment in the US or send it overseas. If you’re not sure that keeping your business in the US is the best decision, consider these additional benefits to keeping it local:

• Designs that Meet Expectations – Designers in the US are some of the best in the world, and having that talent available for your tooling should give you peace of mind. North American design standards are stringent, and U.S. molding suppliers deliver injection molds that don’t require extensive design revisions.
• Higher Quality Materials – Manufacturers in the United States have access to the highest-quality materials that will meet your local and national safety and quality control standards. Using these materials for molds and tools significantly decrease future problems and the risk of recalls on your products.
• Superior Customer Service – Customer service is more than just someone answering the phone or returning an email. Utilizing domestic suppliers helps to reduce the time difference and you can expect a correspondence return within a few hours. There isn’t a language barrier or culture differences to be concerned with either. Domestic partners understand what you need immediately and there shouldn’t be a risk of miscommunication.
• Reduced Long-Term Costs – Cheap labor and materials sounds great as a sales pitch, but it can often lead to increased costs down the road. Manufacturing your injection molds in the U.S. can decrease long-term costs with limited product rework, mold repairs due to low-quality materials, and operational downtime due to mold issues.
• Better at Being Green – Being sustainable and better for the environment may sound cliché, but your business may want partners that are environmental conscious. Offshore partners may not have the recycling mandates, nor have the regulations to reduce greenhouse gasses and waste leaving their facility. Also consider the amount of greenhouse gasses created to ship tooling, equipment, and parts across the globe compared to the minimum required with a domestic partner. Keeping it local will reduce unnecessary waste and be better at being green.
• More Jobs for Americans – Bringing your business back to America or keeping it in America is going to keep your products supporting customers and those that manufacture the products. Keeping it local will help the local economies you operate in and help to keep your products made in safe conditions focused on employee health.

Conclusion

Choosing whether to offshore your business, tooling, and equipment can be a difficult decision to make. It’s not just about cost anymore. Logistical challenges, political tension, and other factors are constantly changing the global business landscape. If you need a domestic partner to discuss your options, look no further than SEA-LECT Plastics. At SEA-LECT Plastics we pride ourselves in tool and die manufacturing that allows us to deliver high quality products free from defects. We have multiple options for manufacturing to help your business succeed. SEA-LECT Plastics has an elite team that can discuss the available options for your new project, we produce world-class prototypes and products, and we have decades of experience with plastic injection molding operations. Our tooling experts can create molds from 3D designs and make fine adjustments to ensure smooth molding operations on a daily basis. We can offer support to determine what type of tooling you need, what materials to choose, and can support the generation of documentation to win new business in your industry.

If you have offshore operations that are ready to come home, we can also support your efforts to re-establish business within the United States. The more information, like pictures of your injection molds, mold CAD drawings, 3D mold files, mold test videos, process data sheets, and material datasheets you have, the better, so we can plan. However, we understand that sometimes you won’t have a lot of information. Give us a call at (425) 339-0288 or email us at mattp@sealectplastics.mystagingwebsite.com. We’ll help to determine the best plan to recover your tooling.

Matthias Poischbeg was born and raised in Hamburg, Germany. Matt moved to Everett, Wash., after finishing his bachelor’s degree in business in 1995 to work for Sea-Dog Corporation, a manufacturer, and distributor of marine and rigging hardware established in 1923.

In 1999, Matt took over the reins at Sea-Lect Plastics Corporation, a sister company of Sea-Dog and a manufacturer of plastic injection molded products with an in-house tool & die shop. Matthias Poischbeg is also a contributor to Grit Daily.

Like On FaceBook; Follow On Twitter; Follow On G+

I get this question all the time, especially from new or potential customers. People get quotes for molds to run in China that are a fraction of the cost of molds that are intended for export and wonder why they can’t just use those same tools overseas. How can molds that are intended to run in China be so much cheaper than those that will run in North America or Europe?

First off, this is not a blanket statement or a comprehensive list. China has many excellent injection mold makers and molders. Probably more than anywhere else in the world due to the scale of things there. I’ve been in several Chinese mold-making facilities that were absolutely world-class, making mostly high-volume medical, closure or automotive molds, and their pricing reflected that. I’ve been quoted molds that were the same price or more than what we would quote to build it here in the U.S. The quality would have likely been similar. But there are a lot more options on the less expensive side and that is the section of the market I’m looking to address.

There’s no simple response to this question, but the answer is usually a combination of the below:

1)     Quoting very low to get the work

2)     Labor costs

3)     Different scale

4)     Different standards

5)     Cheaper materials/processes

6)     Ultra-short-term planning

Deliberately Low Quotes: You aren’t going to get the work if you don’t get past the first round of quotes. Many shops will quote using a standard that they know is unacceptable and spring a price increase on you further down the road when it's brought up. Or ship something sub-standard if someone doesn’t catch it or if they’re dealing with a customer who doesn’t have the technical knowledge of exactly what is necessary to run the mold overseas.

Labor Costs: It probably won’t surprise anyone to discover that labor costs less in China than it does in the U.S. But labor costs in more developed parts of China are not all that different from much of Eastern and Southern Europe. So it’s not the sole reason, but it influences almost every other factor.

Scale: Everything is bigger in China, especially in manufacturing. If you told me that there are 1000 mold makers in Suzhou alone, I would believe you. When there’s that much business moving through an area lead times are reduced, options are increased and prices come down. No one has the scale in manufacturing that China does. The reality is that you just don’t need to be as concerned about repairs in China as you do anywhere else:  Someone will be available to fix it quickly.

Standards: A single cavity mold made for manually unloading is a lot cheaper than a multi-cavity mold with automatic ejection. With the option of cheaper injection machines, cheaper raw materials, cheaper ancillary equipment and cheaper labor, they’re shooting at very different pricing targets than companies outside China. Maybe they even skip the mold-base and cooling lines and just clamp onto the cavity and core. Rather than building against the risk of failure, they may build to the minimum standard they can get away with.

Make It Cheaper: Everything can be the lowest standard because, on the face of it, it’s cheaper to fix than putting in the cash up-front. As the thinking usually goes “I’m already paying for this guy to work repairing stuff. So it’s more important for me to reduce cost of the tooling so I can get the work/put more in my pocket.” Why use hardened steel tooling which will cost more, when you can just continuously repair? There’s many good reasons why (all of them affecting mold longevity and part quality), but that transitions us nicely to our next point…

Ultra-Short-Term Planning: This is anecdotal, but informative. I spoke with a Quality Manager at another substantially sized molder nearby. He contacted me one day with a question about a 32-cavity mold that just wouldn’t fill properly. I think they had 2-3 people just sorting these parts and of course bad parts were still getting through to the end customer. He sent me a picture of the whole shot (runner and parts) and asked what I thought. Even from a photo it was immediately obvious that the runner wasn’t designed properly and they needed to improve it. To do something like this in-house would probably cost around $300. That’s what he had thought too, but when he brought it up with his boss, they told him that they wouldn’t be spending the money to fix it, they would just keep sorting. He was frustrated because they were pushing him to improve the sorting rather than fix the root cause of the problem. Paying for the operators to sort was already accounted for, but that $300 would need to come out of a different budget. Unfortunately, I see decisions like this all the time:  Root cause improvements with a ROI measured in days if not hours, but no will to actually spend the nominal amount of money necessary to fix them.

So what does all this “cost saving” mean to a customer? In short, quality and reliability. Not just of the mold itself, but also of the parts it will make. An improperly made mold will NEVER produce parts reliably or consistently. I frequently see requirements for “20 approved samples” or something similar before a mold can be shipped. But unless you watch the mold get sampled, you won’t know how many samples they had to make in order to get those 20 acceptable parts. If their defect rate was 90% to get the samples, a mold was just approved that will never run to any sort of reasonable standard and will cost far more in scrap, downtime and man-hours than could ever be saved by cutting the cost of the mold itself, even if they gave it to you for free.

When buying a mold to run outside of China, make sure you confirm exactly what you will need with your molder. Tooling needs will be different depending on your needed appearance, tolerances, EAU and part pricing. Most molders outside of China will want hardened steel cavities and cores and enough cavitation to ensure the price point you’re trying to hit. If the material is expensive or the project has sufficient volume they will likely also suggest hot runners to keep running costs down. Don’t forget cooling lines: They’re an expensive part of the mold and they’re absolutely critical to keeping processing times (and therefore part pricing) reasonable. If you want good parts and you want your tooling investment to last, you have to ensure you know exactly what you need before you place an order.