We gave a prospect a price for U.S. tooling of $75,000. We went to one of our trusted Chinese tool companies and got pricing at around $35,000. Both prices were more than our prospect wanted to pay, so he did some research on his own and found a Chinese company with an extremely low price of $12,500. We told him that was too low and the company would not be able to give him what he asked for. He went with them anyway and things didn’t work the way he had planned.
Rollin recalls a story from a previous customer:
“We gave the customer a US tool cost ($75,000) for a fairly complex project but our initial Chinese tool company decided to no quote the project due to the size and complexity of the parts. We had a few other trusted companies provide quotes for the mold as well and came back with quotes around ($35,000). Both the US tool cost and Chinese tool cost was more that he wanted to pay at this time. So he did some internet research of his own and found a company that he wanted to use to make his molds. This company came back with an extremely low cost for this project of $12,500. In discussing this with the customer, we told him that this was too low and the company would not be able to give him what he is asking for. The Chinese hot runner alone for the mold would cost $9,000 by itself.
He insisted, and sent this project to the tool shop. We had suggested that he send us over to do a complete site survey, but he decided that he was willing to risk $12,500 with this company. Soon after he placed the orders, the tool shop told him that they had underestimated the mold frame size needed for this project and told him it would now cost him $25,000. He still insisted in moving forward. After several weeks, they provided him with a DFM report that said they could not build this mold without a hot runner (which was specified on the initial quote request). They said he would need to send them another $9,000 immediately so they could purchase the hot runner to build this mold. Now the total cost of this project has jumped to $34,000 in a matter of weeks. But he felt that he has already committed to this company and continued forward.
The initial 6 week mold delivery turned into 6 months, with little or no updates being provided by the factory. His project was a very time sensitive part that had limited seasonal sales projections. Due to these extended delays, he missed the current sales season for the year. The customer finally contracted with us to help get this project on track so he could hit the next year’s production season…
Upon visiting the factory on the customer’s behalf, we found that it was extremely small and admittedly took on this project that was way too big for them to handle. They had to continuously outsource various parts to other manufactures and had delays after delays come up with their scheduling.
We also had to make some design changes to the tool, which also added another $2500 to the project so it would run production at an acceptable cycle time. After getting all of this moving in the right direction, the mold was soon completed and shipped to a factory in the US for production.
In hind sight, our $35,000 quote was right where it should have been. And our tooling associates would have had the capabilities to complete the project in house to avoid the outsourcing delays. Any design problems with the tool would have been addressed before the mold was built to avoid further delays and increased cost. He would have even saved some money by working with us and our Chinese factories from the beginning.”