Page 42 - MetalForming January 2013

Tooling by Design
By Peter Ulintz
Outsourcing Stamping Dies
Tooling Technology
Many contract stampers can build their own dies inhouse, although on occasion they may need to buy tooling from an outside source. Outsourcing tooling can help reduce costs while decreasing turnaround time. However, while for some companies outsourcing may be part of an emerging or existing business strategy, it is not a fail-safe strategy. There are many variables to consider.
Stampers considering outsourcing their tooling, either domestically or internationally, should first conduct a make- or-buy study that evaluates the following parameters.
Design and Engineering
• Does the project require you to have die designers and engineers with varied experiences?
• Does the project require unique process-engineering skills?
• Does your engineering department have the full range of capabilities and design tools (CAD, CAM and CAE) need- ed for the project being considered?
• Does the project require extensive communications with internal management, manufacturing, engineering and quality disciplines?
• Do you have experienced project managers who can effectively communicate with internal and external cus- tomers and tool sources?
Cost, Price and Delivery
• Are your fully allocated internal fixed and variable costs higher than those of outside suppliers?
• Would your internal marginal costs be lower or higher using an outside supplier?
• Are overhead costs associated with your inhouse process- es lower?
• Are your internal labor rates lower?
• Can you purchase raw materials at a lower cost than your supplier?
Peter Ulintz has worked in the metal stamping and tool and die industries since 1978. He has been employed with the Anchor Manufacturing Group in Cleveland, OH, since 1989. His background includes tool and die making, tool engineering, process engi- neering, engineering management and product devel- opment. He is vice-president of the North American Deep Drawing Research Group. Peter speaks regularly at PMA seminars and conferences and maintains the website, www.ToolingbyDesign.com. The site serves as a web-based source for the transfer of modern metal- forming technology and the advancement of “Perfor- mance-Based Die Engineering Strategies.”
Peter Ulintz pete.ulintz@toolingbydesign.com www.toolingbydesign.com
• Is your inhouse operation competitive in delivery, serv- ice, quality and price?
Other Considerations
Regardless of your reasons to outsource, proper plan- ning, sound execution and resolute follow-up are required, and all have costs associated with them. Airfare, car rentals, hotel bills and meals can add up quickly, especially if the proj- ect develops problems. Depending on your supplier locations, in-bound freight, taxes and duties can offset any perceived savings, as can transportation time.
You may have projects that have traditionally been com- pleted inhouse that would not be advisable to outsource, such as products or processes that are part of a core business activ- ity, or those based on intellectual property. Customers that require you to have inhouse capability and capacity would be another reason not to outsource.
A qualified supply base should comprise no more than three or four suppliers. When your suppliers know they only have two or three competitors, they can do a better job for you. Each knows it has a 25 to 33 percent chance to win your business. Conversely, with five or six competitors bidding on the same job, each has a 15 to 20 percent chance of earning the business. When a supplier’s quoting department becomes busy, it likely will pay more attention to the piece of business offering the greatest opportunity to succeed.
Don’t rely on your supply base to be your estimating department. The chance of receiving accurate quotes dimin- ishes dramatically for jobs you have not yet been awarded. It is not uncommon to see pricing vary by 50 percent, 100 percent or even 200 percent among suppliers. The reason for this disparity is quite simple: If your company is bidding a job against four competitors, the likelihood of you winning that business is 20 percent. Your four tooling suppliers each have a one-in-four chance to win the business from you. But, it is a one-in-four chance at your 20-percent opportunity. The bot- tom line for your tool suppliers is a five-percent opportuni- ty. You may eventually receive a tool quote, but only after those opportunities with a 33-percent chance get their prop- er attention.
If you do not have a supply base, establishing and devel- oping one can take a considerable amount of time. First and foremost, look for companies experienced in your specific industry. Just because a company has extensive experience developing dies for deep-drawing automotive panels does not mean it can build tooling for a double-basin stainless-steel kitchen sink or a high-strength aluminum aerospace product.
Reputation and references provide reliable ways to find qualified sources, but you have to ask the right people the
40 MetalForming/January 2013
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