Over the past decade, we’ve witnessed a considerable amount of large-scale consolidation and the subsequent closings of many small to mid-size, US-based toolmaker companies, forcing many firms to search beyond the US to find the right tooling supply partner. China and Mexico are two countries that come to mind having benefited from this.
On the flipside, firms across multiple industries are experiencing record profits and growth after the US economy slowly crawled back from the 2008-2009 financial disaster. This prosperity is increasing the demand for parts and overall need for tooling. That being said, demand for toolmakers is at an all-time high and there’s a shortage of premier tooling companies domestically.
Consequently, procurement professionals will experience major hurdles when locating and sourcing capable tooling supply partners. So, before deciding on the best tooling supply partner, examine your sourcing opportunity from all angles, keeping the following three considerations at the forefront of your decision.
Sourcing the right tooling supply partner is more challenging than ever based on your component or module, material, and/or timing constraints; cost shouldn’t be the main diver of your decision. However, as with most other commodities, procurement professionals are often incentivized to use the lowest-cost option. This could become a nightmare because if you select a low-cost (low-quality) option, you expose your organization to more risk and will lose big on the product when the poor-quality tools start making parts.
While cost remains a critical element in any sourcing activity, we argue that overall tooling capabilities, experience, and timing are equally important and should be weighted accordingly as part of your decision criteria.
3 Considerations When Choosing a Tooling Supply Partner
Tooling is defined as creating aids like cutting tools, dies, fixtures, and gauges for use in a specific production line or the performance of a specific contract or job. Tooling capabilities and specialization vary from company to company, but some focus on larger, more complicated tooling designs, while others focus on smaller designs.
In the current state of manufacturing and industrial design, tooling suppliers who offer a wide array of capabilities are more appealing to any sourcing professional and the right tooling supply partner will offer many different tooling options. Remember to approach your sourcing decision with a supply partner mindset, not a supplier mentality.
When considering the capabilities of a potential tooling supply partner, a sourcing professional should analyze and evaluate every offering that partner provides or has the capacity to provide. Ask yourself, “Does this potential supply partner have the ability to meet all of my business needs without the risk of problems during prototype runs or production?”
Below are a couple of common, yet extremely critical questions you should ask regarding the capabilities of any tooling company in consideration for your program:
Which Processes are They Capable of and Specialize in?
It’s important for a sourcing professional to understand the many types of processes that a potential supply partner may offer. This is not only helpful for your understanding of the supply partner, but it may also save you on total program costs. The most common categories of tooling include fixtures, jigs, gauges, molds, dies, cutting equipment, and patterns.
What Materials do They Work With and What can They Suggest?
There are many different materials that can be used in the tooling process depending on the type of tool required, as well as the timing required. The most common materials used in tooling include: aluminum, steel, cast iron, carbides, and composites (REN). Certain supply partners specialize in the different material types, so it’s important to know what your potential supply base is capable of, and also what they specialize in. Ensure that the tooling supply partner understands the volume required of the tool, as it will impact the material chosen (i.e. prototype tools should be made from REN or aluminum, whereas large-volume production tends to favor steel tools).
Tooling is an art. From a simple mold to a complicated fixture, tooling design and manufacturing isn’t for every company, which is why experience is key. No matter the industry, tooling requires experience both at the individual level and the company level. A sourcing professional should confirm that the potential tooling supply partner has sufficient experience in what the program requires to avoid costly future mistakes. Time and resources are something not many of us have these days, so it’s important to find a partner that’s design capable and experienced, to develop a high-quality tool.
Timing is arguably the most important factor when selecting the right tooling supply partner. It’s the reason that many firms go abroad for tools, which is why it’s critical to find a partner that can quickly make tools to support any program. Since timing is key, it usually leads to higher costs in order to meet program deadlines. Finding a tool maker that can quickly make quality tools isn’t an easy task though, so take the time to develop a tooling supply partner who’s able to make quality tools within in a reasonable timeline. When you find the right one, be sure to stick with them for the long-term.
Procurement professionals should maintain full awareness of the big picture and not just the short-term cost savings or avoidances when searching for a tooling supply partner. Understanding a potential tooling supply partner’s capabilities, experience, and timing, in tandem with using a thorough supplier development process, will put your organization in the best position to win for the long term. Keeping these three considerations in mind will ensure you select the best toolmaker for the program and your supply base, and that your results meet company goals.