Ubiquitous material is an inventor’s friend — but production is a complex cost formula.
The above quote was from Mr. McGuire to Benjamin (Dustin Hoffman) in “The Graduate,” produced a half-century ago—and that one word was intended as career advice to a young man who had recently graduated from college.
In the 49 years since I first watched that movie, plastics has exceeded even its most optimistic forecasts. It has replaced wood, glass and metal in thousands of applications, ranging from contact lenses to lawn furniture.
Naturally, plastic is the first or second material we consider when developing our inventions. It offers these advantages:
• It’s easy to create plastic prototypes using material additive processes such as stereolithography, selective laser sintering and 3D printing, or material removal machining.
• It’s economical. The utilization of the raw material is close to 100 percent, as against traditional material-removal machining.
• It can produce intricate shapes and details that material-removal processes find difficult.
• Its cost per cubic inch or per pound is relatively low.
• It is machine intensive rather than labor intensive, lowering cost significantly.
Prototyping with plastic is especially attractive due to the low non-recurring costs. Once you have professional computer-aided design drawings, you have 90 percent of your “tooling” paid for. Tooling, in this case, consists of minor modifications to your CAD drawings’ digital files. These files are used to control the processes such as 3D printing, as mentioned above. Cost per part is high, relative to production process parts, due to the time required. But chances are that you only need a few parts for show and tell, and maybe for testing.
So, plastic is the inventor’s friend. But when the inventor becomes a producer, plastic is not entirely a blessing. Production requires a plastic injection mold that may cost from $10,000 to $100,000, depending on the size and complexity of the part to be molded. That said, a part that may have cost you $25 to $50 as a prototype may now cost you 25 to 50 cents.
Whether you plan to produce or not, you will benefit from having a sense of the costs involved in molding plastic parts. At least it puts you in the ballpark if you wish to estimate the cost of your
invention when it becomes a product. And if you want more precision than a ballpark estimate, you will need to know the way plastic molding vendors create their pricing.
Let’s start with the machine and the process. A plastic injection molding machine is essentially a big squirt gun. Plastic pellets are loaded into the machine’s hopper, are melted at temperatures that are usually hotter than you’d use for baking a cake but below 600 degrees Fahrenheit, and the molten plastic is injected into a mold cavity where it cools, hardens and is ejected as a plastic part. The part is then trimmed from its runner, (a “stem” that hangs on to the part at ejection), and is ready for secondary operations, if any.
If your invention or product is new and you are about to introduce it to the market, you may feel that you have no competition—that there is no need to be fanatical about production costs early on.
That’s a mistake. If your product fills a significant waiting want or need, and you start making an attractive profit, you’ll have competition. Consider: Every 20 cents of direct cost that you fail to carve out of your product ends up at around a dollar in retail price. If you are forced to price your product higher than what the majority of consumers perceive as a fair price for value received, your sales will not grow beyond the critical threshold that attracts catalogers and retail chains.
The part cost mix:
Thus, from the beginning you must be deeply concerned about your product’s costs—and the cost of a plastic part is a mix of machine time, raw material, setup cost and tooling investment.
From your point of view as parts buyer, these costs will be lumped together in a simple price per part or lot price at some quantity that you determined was best for your needs. For example, if you ask for pricing at 1,000, 3,000 and 10,000, your price per part should drop as the quantity goes up. This is because the setup cost, which may require two hours or more, is spread over the quantity of your order. A $200 setup cost spread over 1,000 pieces adds 20 cents to the basic cost of the part, which consists of machine time and raw material.
Size of the molded part:
The larger the part, the more plastic used—and, of course, the higher the cost of material. Less obvious is the size of the mold itself. Molds are subjected to tremendous injection pressure. To withstand the stress of this pressure, the mold is designed and built with lots of metal. It often weighs hundreds of pounds, and it is not uncommon to weigh over 1,000 lbs. To accommodate
a large mold, the machine it fits into must be appropriately large. Thus, large parts have a large direct impact on the cost of the mold and of machine time. A large-capacity molding machine costs
more to run than a small-capacity one.
Number of cavities in the mold:
A cavity is the hollow part of the mold into which the plastic flows. For small parts that are used in relatively high volume, it is economic to make a multi-cavity mold. For example, a four-cavity mold will produce four parts with each “shot” of plastic. The cycle time to mold the four parts in a four-cavity mold is essentially the same as for molding one part in a single-cavity mold.
Although the amount of plastic used to mold each part is the same regardless of the number of cavities, the machine time cost is divided by the number of cavities. If the machine-hour billing rate is $120 an hour and the molding cycle is half a minute (120 shots per hour), the machine time cost per part would be $1 if the mold was a single-cavity mold. For a four-cavity mold, the machine time cost would be 25 cents. Thus, if the cost of the plastic was 20 cents per part, the cost of a part produced by the single-cavity mold would be $1.20, and the cost per part from the four-cavity mold would be 45 cents each.
So, why wouldn’t we always make a multi-cavity mold? The high cost of the mold, of course. Molds are very expensive. And although a four-cavity mold may cost only 2 ½ or three times as much as a single-cavity mold, it’s still a big and risky investment, often made when the future sales volume is unknown.
Size of injection molding machine:
Machines wear out or become obsolete. Their original cost must be paid for by assessing it to the parts that it molds, usually based on an hourly cost to pay for and maintain the machine. The bigger the machine, the higher the machine-hour rate. Add to that the cost of increased floor space and electricity required for the machine.
Kind of plastic used:
Among the hundreds of available plastics, and the combinations that can be formulated by alloying and by using various additives, only a few are used in the majority of our consumer products. (Plasticsusa.com lists 49 of the most used plastics on its website.) Utility plastics such as polypropylene, high-density polyethylene, ABS, high-impact polystyrene, etc., generally cost less than a dollar per pound. The so-called engineering plastics such as polycarbonate, nylon, Delrin, etc., may cost as much as two to three dollars per pound or more. In general, try to design your product for the lower-cost plastics unless the incremental cost of the better plastic reduces your long-term costs in some way. If in doubt, start with polypropylene and invite arguments about why some other plastic is better for your application.
In addition to what we call plastic, there are several thermoplastic elastomers or “rubbers.” These are less common than non-stretch plastics, but the economics of using plastics also apply to elastomers.
Time and material to set up and tear down the machine: As stated above, this cost, known simply as “setup,” is spread across the various quantities that you have indicated when you request pricing.
Length of run:
Early in your experience as a producer, you’ll tend to err on the side of order quantities that are too small rather than too large. But as your business matures, your cash flow becomes healthy and you can forecast sales with reasonable accuracy, you may want to invest in larger purchase quantities. You’ll have to balance the cost of “carrying” (storage floor space, insuring and paying interest
to your banker or yourself on the money invested) against the reduction in unit price. About the simplest way to do this is to ask for pricing at various quantities. Then, starting with the lowest quantity price, work your incremental investment cost against its annual savings.
Secondary operations, if any:
The cycle time (total machine time to produce one shot) is usually somewhere around 30 seconds. It may be more than one minute for large parts. During this time, the machine operator typically trims the runner from the part. (The runner is a sacrificial piece that forms the conduit between the injection nozzle of the machine and the actual part being molded.) If the operator is running
only one machine, she or he may have idle time (while the part is cooling in the mold), during which minor secondary operations may be performed. Typical secondary operations are assembly of two or more parts and trimming of “flash,” which occurs on some parts, and is a very thin bit of leaked plastic where the two halves of the mold come together perfectly.
Planned life of the mold:
A good mold made of steel will probably last for a million parts or more. For example, let’s say that your mold cost you $25,000, and your mold-maker estimates that it will have a useful life of 2.5 million parts. So, your cost per shot will be one cent— almost insignificant until it comes time to pay for the new mold.
Characteristics and experience of the molding vendor:
Every job shop has its own personality. Some prefer short to medium production runs. Some hate small runs and quote high prices to discourage them. Some have little or no experience with elastomers. Some do their own mold making, and others farm out their mold making. And so on. The only protection you have against selecting a vastly suboptimum molding vendor is to understand the economics of molding, as I have explained it here, and know which polymer or elastomer formula is the right one for your part. And armed with answers to both of these factors, you must interrogate the plant manager or knowledgeable technician about its shop. Do you frequently mold polypropylene, etc.? What size parts do you prefer to mold? What quantity is
your typical run?
Even after qualifying a vendor, you should qualify at least two more. Prices quoted will depend on the vendor’s workload as well as all of the ordinary factors that make up its costs. A vendor with an extended workload, and key customers that it cannot disappoint, may price high in order to make it worthwhile to break into “preferred” production. Thus, three vendors
having exactly the same machines and personnel will quote three different prices. Be sure to get more than one quote.