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:
- The tooling vendor has given false answers when questioned because they really just wanted your initial business.
- 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.
- 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.
- 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.
- 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.
- 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.
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 email@example.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.