Registered User
Currently Offline
|
Posts: 4
Join Date: Aug 2008
|
AQA Corp. recently became a member of MAPP. Our business is sourcing injection molds from China as a service to US molders and toolmakers. We therefore were very interested to read the June correspondence in the Forum concerning members’ experience with Chinese molds, particularly concerning the cost savings, or lack thereof, compared with sourcing from the local US toolshop. Our experience is quite contrary to that described by other members, which is the reason for this writing.
It is certainly true that inflation of steel and labor costs have been a serious concern to all Chinese toolshops over the past year, and to these problems the US buyer must add the increasing shipping costs and the up-valuation of the Yuan relative to the $. However, one important aspect of industry globalization which is often overlooked is that those same competitive pressures leading to reduced tool pricing in the US are simultaneously working on the progressive toolshops in China with truly impressive results. We see there extensive investment in state-of-the-art high-speed milling and EDM equipment, reorganizing to work leaner, a more detailed analysis of their actual costs, and a greatly increased emphasis on “getting it right first time”.
There is no such thing as a Chinese price for a specific mold: the quotes fall within a range, just as they do in the US, except in China the range is much wider. Competition has brought about a certain amount of price-leveling within the main tooling regions of China, but still there is large pricing disparity from region to region. The Shenzhen / DongGuan region, beloved of US buyers, is easily the most expensive, with the Shanghai automotive region coming in second. AQA avoids both of them.
Until around mid 2007, the pricing of our moderately complex molds was coming in at around 50% of what the US mold price would have been. As getting a true apples-to-apples comparison is not easy, I would have to add that “50%” is more qualitative than quantitative.. However, in June and July 2008, we delivered two molds to a customer in the Chicago area who normally makes his own molds. He was able to tell us what his internal costs would have been to the nearest $100, had he decided to make them in-house as usual. The bottom line result was that the two Chinese molds gave him savings of 48% and 44% respectively. The AQA price includes shipping to the customer’s location, US customs duty and brokerage fees, insurance, all the AQA services involved in the project management and the cost of air freighting try-out resin to China. We did make some mistakes in both molds, and the customer’s costs to correct them were deducted from AQA’s quoted price in accordance with the guarantee.
In this case, the customer did not wish to travel China to watch the build for himself. But in our opinion, had he decided to do so, as he is paying AQA to manage the project, the cost of the trip in time and money should be charged to satisfying curiosity and not added to the cost of the tools from China.
Peter Huntley
|
