Why Minimise the Cost of a Project?

Date

10 Nov 2015

Poste By

Andy O'Neil

Injection moulding is a versatile process that enables the manufacture of parts in a huge variety of shapes and materials that range from the very small, weighing a fraction of a gram, to items the size of a wheelie bin. The process involves injecting heated or molten plastic into a mould that holds the shape required. The plastic is then cooled, the mould opens and the part is ejected from the mould. The mould is then closed and the cycle repeated. The process is suitable for quantities of just a few hundred to many millions.

To obtain an injection moulded part one needs:

• a mould tool into which the melt or molten plastic can be pushed in order to make the required form and
• an injection moulding manufacturer who has the resources and ability to make the actual parts as and when required

The above are the prerequisites but the objective must be to manufacture product or mouldings that meet the quality objectives, as and when required and that are fit for function. All of this needs to be done in such a way that minimises the total aggregate cost. The total aggregate cost is the total cost of commissioning the tooling and the aggregate of the amount to be paid for all the parts to be purchased over the total life cycle of the part1.

The tool maker must focus on ensuring that the tool is capable of making parts that are fit for function and minimising the cost of the tool. The moulding manufacturer must focus on producing the parts to the quality standard at the lowest cost by producing efficiently, what the customer wants, when he wants it. However within this cosy scenario there lurks a very real exposure. The toolmaker's primary concern will be to build a tool that is capable of producing the specified parts. The tool price will have been set so as to capture the sale and make him a margin. He will need to produce the tool within the agreed time scale and will not wish to spend too much time in optimising the tool. Indeed it is unlikely to be of that much concern to the toolmaker. The moulder at this stage can influence the price it pays for raw materials and certain overheads but will not be able to overly influence, for example, the speed with which the mouldings are manufactured or the precise amount of material used. This is because decisions taken at the tool build stage will irrevocably dictate certain elements critical to the production of the parts. As a consequence the opportunity is permanently lost to press down upon the total costs that will be incurred throughout the life cycle of the product.

To achieve the objective of minimising total cost an holistic approach is necessary. One that recognises that the tool build and the manufacturing of mouldings must be looked at together in order to minimise total costs over the life time of the project. The two are inextricably linked yet it is not unusual for tooling to be treated separately from the needs of the manufacturing process. Witness the existence of many stand alone tool making enterprises and stand alone injection moulders or the propensity to have tooling built overseas. At Plasmotec, from the very start of a project, we are at pains to ensure that the total investment is minimised and that means concerning ourselves with all relevant costs and optimising everything. It means looking at the total cost of producing the tooling and the total cost of manufacturing the mouldings over the life of the project. It means looking at how the tooling may be constructed and how that impacts upon the total cost of manufacturing the parts. It means using modelling and other techniques to ensure everything is optimised.

Case Study The client required a part to be made in Nylon for strength. The volume call off was expected to approximate 1 million units per annum and to continue indefinitely. Tool A shows the total costs associated with a tool built to run on the sprue2 with 4 cavities. The sprue adds to the overall weight per part and hence the material cost. The moulder cannot produce the parts without producing the sprue. The tool configuration is such that it cycles at 18 seconds and so manufacturers 800 units per hour. Tool B by contrast has been designed as a hot runner thereby obviating the sprue and resulting in less plastic usage. The design is such that the cycle time is slightly less than tool A and it produces 6 units each cycle or 1271 units per hour. To accommodate the extra 2 cavities the tool is allocated a slighter larger machine than that required by tool A and this is reflected in the costings in the table. Because tool B is a hot runner tool and produces from 6 cavities it costs more to build. The incremental cost of building tool B is almost recovered by the end of the first year because units from tool B are 20% lower priced than the same units from tool A. At the end of the third year the total saving from tool B relative to tool A exceeds £10,000 or some 12.5%.

Case Study

A

B

Annual Volume

1,000,000

1,000,000

Project Life

3 Years

3 Years

Tool Cost

£4,000

£7,000

Hot Runner Costs

£0

£1,600

Part Weight Including Sprue

7g

6g

Material Cost per Kilo

£2.00

£2.00

Cycle Time

18 seconds

17 seconds

Cavities

4

6

Output per hour

800

1271

Overheads Based on Hourly Recovery

£12.50

£9.44

Material Cost

£14.00

£12.00

Part Selling Price

£26.50

£21.44

Total Tooling Cost

£4,000

£8,600

Total Part Costs

£26,500

£21,444

Parts and Tooling Year 1

£30,500

£30,044

Parts and Tooling Year 2

£26,500

£21,444

Parts and Tooling Year 3

£26,500

£21,444

Over 3 years

£83,500

£72,933

1. The total cost should take account of all costs including any carriage, duty and related costs and the time value of money. 
2. Sprue is the excess plastic that can be produced each time the mould tool cycles.