Where's the Money?
Have you ever wondered: "If our company is saving so much money by building molds all around the world, why isn’t the bottom line awash in dollars? Where’s the money we’ve saved? What if we’re saving money only on one line item and spending more for the whole project?"
Purchasing, administrative, and engineering departments can all be heroes: hit their numbers, show how they are saving money against their budget, and even earn bonuses for doing so. But the true total cost of a tooling project can fall to the bottom line and be lost in the diminishing cash flow.
Somebody has to be looking at the big picture!
- Who is looking at the cost of being late to market?
- How do we even define the cost of lost market share?
- Where do the communication costs get spread?
- Which department has to absorb the re-work costs on the tool, or the cost of quality for a sub-standard tool, or more operator time, or longer cycle times?
- When do we allocate the increased maintenance costs, the replacement costs due to short tool life, the shipping costs for repairs, and down time?
Sure, you’re getting a lower quoted price for your mold. But a mold isn’t a commodity item – it’s literally the tool that produces the product you sell and determines the unit costs of what you sell. Are you really saving bottom-line cash by running around the world for your tooling – or are you another victim of "where’s the money?"
Run the numbers yourself. See how corporate divisions of accountability can hide the other costs and leave you asking, "If it’s so much cheaper somewhere else -- where’s the money?"