The Best Ways To Reduce Tooling Costs

Any company that produces a product, has some sort of consumable investment; they have to use one product to produce another. For example, in the Automotive industry, they are required to use hundreds of other capital equipment and indirect/consumable tools to create their product, such as; drills, taps, grinding wheels, honing wheels, etc. These tools typically perform value added services to the part. These value-added features have a cost, reducing this cost increases profit margin per product.  Typically companies approach this situation by researching the market for suppliers that have more advanced, more sophisticated tooling.

SuperAbrasives Grinding Solutions

SuperAbrasivesI had a client in 2012, that was looking to reduce their tooling cost by 40%. To achieve this task, we brought in a team of 25 people, and quoted all of the tooling in their plants. We negotiated with suppliers to leverage overall purchasing power, as well as, searched for suppliers that had industry advanced tooling. These were companies using PCD(Poly-Crystalline Diamond) tipped tooling, which drove overall tool life up by over 400% compared to High Speed Steel coated. An expensive operation for these companies is grinding. Typically grinding needs to be performed on an metal objects that are spinning against or close to each other. These grinding wheels are expensive, due to the hardness characteristics and precision that is needed in the process. By reducing these costs, most companies I have worked with, observed almost 15-20% reduction in tooling cost when sourcing their grinding products.

Maximizing Your Abrasives

I remember this one company I worked with, they were spending close to $250K annually on grinding wheels for removing casting material on the mains of a crankshaft. The were using a name-brand product, stock/typically market product to perform this process. We researched the market for cost competitive suppliers. We came across a Diamond Grinding Wheels Manufacture( we ended up using their Maximizer Grinding Wheels to perform the same process. After one year of implementation, they saw a reduction of tooling cost for grinding wheels of 64.8%, resulting in an annual spend of $162K.

Reducing Work In Progress in The Manufacturing Environment

How Do You Reduce In Process Product Costs?

In the ever changing and fast moving global market; automotive companies are struggling with forecasting and Work-In-Progress. Work-In-Progress is product; typically in a manufacturing market, having value-added processes performed to the piece, but have not turned the product into a sale-able product. Companies are combating the need for large volumes of W.I.P. by becoming more efficient with small lot style manufacturing. This allows them to react quickly to the markets demand of product. Their forecasting does not have to be as meticulous, and precision. This allows them to mitigate risk with producing more product than the market demands.


Decreasing Overhead Expenses Through Overall Efficiency

Companies are using extreme digital integration into this process and production. This is allowing the rapid change and flexibility in production. The key component to manufacturing large capacity with extreme flexibility is Overall Equipment Effectiveness. O.E.E. is critical to allowing through-put or output of product. Typical measurement of O.E.E. is machine up-time. This is the amount of time that a machine has the capability to producing/adding value to the product. By allowing capital equipment to perform its designed task, the companies overhead and expensive involved in the equipment becomes a “watered down” expense, due to being spread over so many finished products.