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8 Estimating Mold Cost

One of the most difcult jobs in the mold making business is to determine as

accurately as possible the cost of the mold for the product for which it is to bebuilt. The estimator should be an experienced mold designer who can visualize

from the product drawing submitted (and occasionally from a sample) what kind

of mold will be most suitable to produce the product economically.

8.1 Need for Estimate

Before estimating, the designer (and the person negotiating with the client for an

order) should rst establish if the ``request for quotation,'' that is, to quote a

price for such a mold, is serious and how the outlook is for getting the order.

This is an important consideration: in the author's experience, many molders are

often approached by their customers solely to nd out how much it would cost,

approximately, to start a new product line; they need a mold price to determinetheir own costs before proceeding. In some cases, the customer approaches not

only one, but possibly three or more molders for mold prices, and each of these

molders may in turn approach three or more mold makers for estimates of the

necessary molds. One mold maker may then get the same inquiry from several

molders, for the same product. In fact, only one of all these requests for

estimates can result in an order. This means that the estimator, faced with all

these requests, cannot spend too much time with each one, or the cost ofestimating would become excessive. In many cases, the ``boss'' of the mold shop

will decide whether it is really necessary to quote at all, or he or she may decide

to just give a ballpark gure and skip the formal estimating process altogether.

From the author's experience, with such multiple requests, the lowest price is

often based on errors in quoting; with clients who habitually select the lowest

bidder, the mold maker is bound to lose money. Any smart buyer of molds,

before placing an order, should consider rst the background and reputation of

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the mold maker and his or her expertise in building the particular type of mold

requested. Only then should the price be considered. As has been said here

repeatedly, only the best-suited mold for the planned production will result in the

lowest product cost, which is really what the client needs. This often leads tospecialization by the mold maker, which is benecial to both customers and

mold makers. Requests for molds that are outside the mold maker's expertise

should be declined, unless the mold maker intends to enter this new eld. If the

request for quotation is considered serious, the estimator will rstin his or her

mindcompare the product with other jobs of similar products and then search

for precedents in personal (or the shop's) records, such as old drawings, book

illustrations, or electronic les.

8.2 Precedents

If there are close similarities (precedents), the estimating process is relatively

simple, because there is a good basis from which to extrapolate what will be

required for the new mold. For example, the precedent can be a mold with only a

few cavities for a product with a shape similar to the one for which the mold is

to be estimated, for the same number or for more or fewer cavities. In this case it

is up to the estimator to nd out from records, if possible, how good the mold

performed in operation, and if the hours estimated to produce the mold were

adequate; in other words, was the customer happy and did the shop make money

with this mold? This process is easy if proper records are kept, as was suggestedin Chapter 6. The estimator should consult with the people who actually made

that mold to nd out if there were any problems during manufacture or testing of

the mold, and then adjust for it when pricing the mold. With the absence of good

records, unfortunately, this is possible only if there was little turnover in

personnel in the shop.

8.3 No Precedents

If molds for a similar product have never been made before or the estimator is

not familiar with the type of mold requested, there are, in general, two

possibilities to be considered.

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(1) The estimator will make sketches using previous experience as a mold

designer and show at least one method as to how the product could best be

made. These sketches will then be the basis for the estimate. (The problem with

this method is that it will take much estimating time, and even so, the estimatorcannot devote as much time to it as the mold designer will have after the order

for this mold has been booked. It is important that any such preliminary sketches

are made available to the mold designer, who then may (or may not) follow them

for the nal design. From the estimator's sketches it is then fairly easy to prepare

an estimate. The main problem with this method of estimating is that the

estimator makes a bad mistake, typically by not seeing, underestimating, or even

ignoring any difculties that may arise due to a peculiar product shape. The

mold designer will then not use these sketches, but will come up with a proper

mold design, which could be more (sometimes much more) expensive to build

than was rst estimated. In this case, any responsible mold maker (whose

reputation is at stake) will have no choice but to build this mold, even if it will

result in a nancial loss. Such losses can then be written off as learning

experience or as research and development expenses.

(2) A good alternative is to invite the participation of the client to share in

advance the cost of designing the new mold before estimating. This is often veryuseful if the product is completely new and the projected quantities are

extremely large, or where the product is considered very complicated to mold.

For a certain quoted price, the mold maker will offer to design either concepts of

the mold, or a complete mold. This is also often done for a whole system, that is,

not only a mold but including any product handling and postmolding operation

of the product. After agreeing with the client that the proposed mold and/or the

whole system will do what is needed, the mold and related equipment cost canbe fairly easily estimated on the basis of this preliminary design, and there is

much less risk of too low or too high an estimate. Traditionally, mold makers

add an often quite high safety factor when quoting unfamiliar molds, to cover

the unexpected. If the mold is fully designed, there is no need for such

insurance; this will result in a lower mold and system price, which benets the

client. The cost of the design paid in advance is then considered in the nal mold

price. If the client decides not to proceed with the project, at least the mold

maker will have the sometimes considerable design expenses paid.

8.4 Methods of Estimating

(1) One method is to actually break down each and every mold part into its

estimated cost: material, the cost of the various machining steps (milling,



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turning, grinding, EDM, polishing, etc.), the cost of heat treating and other

expenditures for nishing in house or by suppliers, the cost of standard

hardware, and the costs of assembling and testing the mold. Include also the cost

of any xtures or special tools required in the manufacture of the mold parts.While some of the costs are usually quite simple to establish from price lists and

records, this method expects that the estimator or assistants have intimate

knowledge of the machining operations involved and the operating times

required for each step. Since molds consist of many different parts, this is

obviously a slow, time-consuming process; however, as long as the estimator

really knows the business well it can yield quite accurate estimates.

(2) The method used most often is to base an estimate on experience from

precedents. If, for example, the mold considered has 8 cavities and there is a

suitable precedent of a 4-cavity mold, it is fairly easy to extrapolate, by

calculating the cost of the new total number of stacks plus the proportional

increase of the cost of the larger mold shoe. Many estimators then add a risk

factor, which, depending on the difference from the precedent and the general

familiarity with the type of mold, may be anywhere up to 50% (or even more) on

top of the estimated cost, depending on the mold maker's practice and policies.

It is best if the estimator works from a nished product drawing, with alldimensions, and where all tolerances are shown. There is usually little risk if the

same mold has been built before, and much risk if there are many unknowns.

This method is good if there are good records of many similar molds made over

the years; there is less risk of repeating earlier mistakes.

(3) ` Ballparking'' should be used with care. It requires real experience and

solid background in mold making. It should also have the proviso that the

quoted price is only a rough estimate and must be conrmed at a later date whenall data are ready (including tolerances) and after the order is received.

8.5 Mold Cost and Mold Price

The estimator, in essence, prepares only the foreseen cost to be incurred when

building the mold. The cost is the basis for quoting the actual price to the

customer. There will be a standard markup on top of the estimated cost, in

percentage over the cost, or whatever the company's policy is to cover overhead,

expenses, risk (with this mold), and prot. Since every mold is different in size,

number of cavities, complexity, and so on, it is usually difcult to create a

standard price list for molds, except if many identical molds based on standard

mold components are built on a regular basis.

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There is another management consideration: The plastics mold business is

traditionally up and down, seasonally. In times of low sales, molds may be

quoted at prices lower than the costs determined by the estimator, solely to get

the job, and to keep the shop busy to avoid layoffs. One unfortunate result of thismethod is that as soon as the shop is lled with such money-losing molds, as the

business picks up again, well-paying jobs may have to wait because the shop is

busy.


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