Before you jump to this conclusion in order to meet your budget, consider the true cost of having an off-shore molder make your products. You have a quote for the tooling and the part price, but have you also added the cost of freight to the port and then to your facility? You will also need to pay customs fees. Typical lead time for the freight is 3 to 4 weeks for off-shore vs. 3 to 5 days in the U.S. Have you factored in the cost of additional inventory to cover the transit time? Most off-shore molders will require at least a deposit or full payment before they ship the product vs. 30 day terms from most U.S. molders. What is your company paying for financing?
There are additional risks when working with an off-shore supplier. Inconsistency in the material that is used to mold the parts is very common. The first run works, but the 3rd or 4th doesn't fit or is discolored. Shrinkage in molding is very sensitive to the material that was used, the cycle time at which it ran, or how much regrind was used in the material. The part may meet the print when it came off the machine, but as it traveled in the container it shrank or warped to the point that it no longer works. Who's going to pay for the replacement parts? Let's say your product consists of several parts that connect together, your only concern may not just be whether they fit, but does the color match? Scarier than color or fit, what if your parts are used with consumables or medical applications, do you know that the material used does not contain toxic chemicals that are released under heat? How about parts that need to hold weight, will it become brittle if left in the sun? A good domestic molder can help you identify cost effective materials that can meet the application environment. They will also back up every shipment with lot numbers and material certification. In the worst case scenario, at least you know a domestic supplier is liable for the products that were made. A Chinese supplier does not even have to give a deposition.
Let's say I'm frustrated with my off-shore supplier and want to pull the mold and have a U.S. molder run it. It can be a challenge to get the off-shore molder to release the mold, and even if they do, it may only be the insert and not include the mold base. The mold base can be up to 30% of the complete mold cost. Even if it's a complete mold, the U.S. molder may have to modify the mold to run in their equipment.
You can source your tooling from off-shore and have it produced domestically, but still consider that if you have the molder source the tooling for you, they take complete responsibility for the finished part. It can be very frustrating to be between an off-shore mold maker and a domestic molder arguing over why the part doesn't fit. Did the mold maker not put in enough vents, or did the molder try to reduce the cycle time to meet their quote? Did the off-shore mold maker make production parts with the material specified for the job, or with what they had in stock? It's worth the piece of mind, not to mention any mold modification fees that may be incurred, to have the molder take on the ultimate responsibility for the tooling.
What is your time worth? Communication is a challenge when you're working with off-shore suppliers. Although much of our correspondence is via e-mail, it is still not a substitute for face-to-face conversations especially when you are developing a product. You will need to factor in additional time to communicate not just for the initial project, but also for any modifications to the part that you would like to make in the future.
If producing offshore, you need to locate a dependable company to hire for your molding, which can lead to down time for your company while you are on long travel trips overseas. Is your company ready to pay those travel expenses? Perhaps you could use online product sourcing, but in this day and age do you really know who you are dealing with? Finding an overseas company online entails a great risk of fraud. Finally, you could use a buying agent, but then you have to deal with commissions and with a buying agent it's hard to regulate production performance.
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