In addition tax dollars generated by local businesses benefit the entire community. Much of the real cost of ‘offshoring’ is hidden by these factors, but they are quite real nonetheless.

Plastic Production
In the following article, Lisa Chissus, President of Cascade Plastics explores the advantages of using American companies for production of plastic parts.

It’s just a plastic part; why not buy it in China?

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 put 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 days 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 it was ran at, 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, 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 communicate with you what cost effective materials can meet the environment that your parts will be in. They will also back up every shipment with a lot number and material certification. In the worst case scenario, at least you know your 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 so 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 the complete responsibility of 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 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 on the floor? It’s worth the peace 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 when you are developing a product. You will need to factor in additional time to communicate not only just for the initial project, but also for any modifications to the part that you would like to make in the future.

These hidden costs, when added to mold making and production costs, often make U.S. production a better bargain. For more information, contact an American expert production specialist at Cascade Plastics. 253-922-3460 or 800-699-3460, or email us at sales@cascadeplastics.com.