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A CUT ABOVE THE REST

Details: Written by Robert Larson

Is your company the respected leader of the pack . . . “A Cut Above the Rest”

or just one of the followers trying to pick up a scrap of food (or orders)

here and there to survive in the marketplace?

The words “A Cut Above” and “A Cut Above The Rest” have been used by many companies in the converting industry for many decades. In my former days as a cutting die manufacturer at Boston Cutting Die Company in Boston, Massachusetts the Larson family used that slogan going back to the 1950’s. For years it was synonymous with Boston Cutting Die Company. We truly thought that we were a notch or two above our competition in our knowledge of how to service our customers with quality accurate cutting dies and more important some added benefits like understanding their production situation and providing solutions to their problems.

We operated what we called our “Cutting Die Laboratory”. We would provide a customer with a total solution to cutting and trimming different materials and parts. We provided our “school solution” on the best combination of cutting die construction and design. This included the correct bevels on the cutting blade to include regular wall, clearance, straight inside or outside wall or combinations thereof. The proper cutting edge with the correct finish or degree of polish on the die blade to cut or trim the most cantankerous of materials. We had different solutions in construction whether it be a simple polyester fabric, up to a challenge like Kevlar™, ballistic nylon to 1/2” plywood or Lexan™. We suggested the ideal cutting surface and finally, the proper cutting press to best cut or trim a customer’s part using their materials. We had different types of cutting equipment ranging from a Heidelberg, several Meihle’s, full head hydraulic presses, swing arm clickers to simple punch presses. Our cutting die inventory included a diverse array of cutting dies in different constructions, regular wall, clearance, straight inside or outside wall, steel rule, forged clicker and high dies, very close tolerance solid milled and EDM dies.

Best of all, we had the knowledge of how to put all the elements together to develop the best cost effective solutions and more important the ability to do this all in-house. One day a company contacted us and said that they were going to send one of their engineers to our Cutting Die Laboratory to do some research on a new proprietary material. My response was simple but honest. Our Cutting Die Laboratory was not a physical thing in its own room with a sign on the door of the lab, but a collective mental process of many minds in our company to solve problems. That is what made us “A Cut Above The Rest”.

This article will focus on that fuzzy concept of being above and beyond your competition, a cut above, so to say, the rest and how to over come the complex problem of selling cheap. Again, I will try to explain why success in retraining customers and getting your price for your services should be measured in your value as a diemaker supplier to your customer.

I know that every diemaker thinks that his (or her) cutting dies are the best, that their service is exceptional. Then why do many converters look at a cutting die as a commodity item? Why do many still believe it is OK to order the least expensive die when two or three diemakers quote on a job? Why are so many diemakers bitching about the low prices that they can command for their dies in the marketplace? Why do converting customers tend to jump from one diemaker supplier with little solid loyalty because of a lower price on a quote? I have heard many people in the industry say that today their seems that there is little loyalty to stick to one supplier. Why do many diecutting converting customers have such a low regard for many diemakers as professional business people offering excellent tooling?

On the other side of the equation, why have some diemakers be truly successful and profitable in a marketplace that so obviously in the pits when it comes to what people see as the value of exceptional tooling to make a cutting press operate to it maximum potential and profitability. I have written about this subject many times in the past.

In my travels around the globe, industry people have brought up this subject again and again. One leading American steel rule cutting die manufacturer told me that today that his company charges less for their dies than they got ten years ago. The costs of labor and materials have increased. The prices of his dies have decreased. This just does not seem logical, but in our industry anything is possible. In one respect the fault can be pointed at the way many diemakers compete against one another. To many the best way to get business seems to generally cut the price. Therefore we see not only a stagnation of prices but an overall diminishing of prices in the marketplace. Is this a healthy situation . . . I think not. Is there a way to combat this sickness in our industry . . . I think that there is.

A meeting in Europe

Some time ago, I attended a meeting of diemakers in Germany. During their meeting the subject of low prices of their dies was discussed. Three points were brought up as to prime causes for the prices of steel rule dies diminishing in relationship to their presumed true value. They were:

1. Diemakers drive prices lower to kill off their competition.

Some diemakers use price as a way to kill of competition and to take over a customer. This logic is more irrational than logical for the result often is self inflicted injury not only for the target diemaker, but for the industry in general. The customer may think that he is the winner in allowing a diemaker to slash prices, but in the long run the value of tooling in the marketplace is diminished and diemakers are less able to provide excellent products and services that customers demand. There is a real squeeze on profits. A comment was made that many diemakers were today operating at break even or below and this condition could not be allowed to continue for the health of the industry.

2. Diemakers make errors in calculating the sales prices of their dies

Many diemakers make errors in calculating the prices of their dies. When pricing their dies, many diemakers do not fully understand the total needs of the customer and may not price the die correctly. There is no standard formula or method for calculating prices different types of dies ei., flat laser steel rule dies, jig dies, clicker dies, for example. Therefore, generally diemakers tend to price dies more by guess and estimates vs. by a set calculation system based on materials, labor, overhead and profit margin.

To combat this void in pricing strategy, I have asked a leading software development company in our industry to develop for me, a simple, yet basic steel rule pricing software package that can be offered to diemakers at an extremely low cost. I intend to plaster this software throughout the industry so every small diemaker can have a definite handle on the pricing of his dies.

I recall a gasket manufacturer who was being beat to death in cut rate competition. He developed a simple price program for gaskets along with the dies used to cut out the gaskets. He literally gave the program to all his competitors. The net result was an eventual rising of the floor on prices. Many of his competitors realized that they just were not making money by slashing prices. Could that same scenario hold true in the diemaking industry? We shall see.

3. Diecutting customers often do not provide their suppliers with all the information and specifications to receive a correct price. Often buyers play one diemaker against another to get the cheapest price. Many diemakers hungry for business play into the hands of a buyer and lower prices to get the job.

The German diemakers spoke as if the above problems were “German” problems that required a German solution. I commented to several of the diemakers, that in reality, the problems are universal, and German diemakers did not own these problems all by themselves. I tried to provide my wisdom (if I have any to offer) into the underlying reasons for the above problems and I offered the below comments:

Many diemakers do not completely understand how to price their dies according to the cost of labor, materials, overhead costs and a reasonable profit margin.

In the North America, as elsewhere in the world, many cutting die manufacturers are operated by individuals who are excellent craftsmen. Most diemakers often learning their skills on the die bench of some other diemaker before venturing off to start their own small dieshop. After all, if their boss could make good money off of their diemakers sweat and hard work, why could not a diemaker not make better weeks pay working for myself? Often these excellent craftsmen lacked an adequate understanding of the basics of business management to include financial skills, marketing and sales promotions and how to develop and live by a fully developed business plan.

Many of these diemaker individuals have little, if any, formal training or experience in the areas of finance and business operations. They are content to make what they think is a better weeks pay vs. understanding the concept of pricing their products to insure a proper return on their investment. When it comes to pricing their dies, most diemakers use a simple formula based on x number of cents per lineal inches (centimeters) of blade in a die to set a price of a die. They then reach into their mental calculator to add a certain amount for difficulty of making a die. Many diemakers price their dies in relation to what the Diemaker B, C or D is charging, figuring that the other guy is making a profit at the price that he charges for his dies.. So if Diemakers A charges 10% less, he (or she) can win the business and hope to make a profit on the job that equates out to a good weeks pay.

I recall one large Canadian steel rule diemaker who over a period of years bought out about 25 of his competitors. He commented that each company that he bought was operated by individuals who were not making any money. Generally they were simply trading income dollars for expense dollars. This was no way to run their businesses and today they are all history while one business savvy entrepreneur now controls the marketplace.

Back to the main theme of this article. In reality, if Diemaker A truly understood his (or her) costs, a totally different price may develop for a die. This takes me back to 1980 when my company purchased our first accounting computer system with its job costing module. For the first time, we able to discover our true costs of operating our business. We built up historical data on different types of dies that we made. We could then quote dies using actual costs as a basis for our pricing decisions. The quoted price was then verified to actual production costs so we could see variances and make corrections on future pricing. We had a powerful tool in our bag of competitive tricks. It did not take too long for us to see where we were making and losing money on our dies. On some types of dies we were selling just too cheap to meet competition, other dies we made a very reasonable profit margin.

On those dies where we were literally losing our shirts, we went to our customers and told them that if they wanted a good reliable source of supply in the future, that we must increase prices by sometimes as much as 30%. Most customers understood our logic and knowing that we had compiled our information by computer, agreed to the new prices. A few slipped off to other diemakers for the cheaper prices. We would rather have some other gullible diemaker take a job at a loss and give his money away to a customer. It served him right for not knowing his business!

The bottom line was that we knew our costs and we knew that we had to have a reasonable profit to invest in new equipment and systems plus afford to maintain of physical plant and equipment. We also knew where our break even point was so that if we were put into a competitive situation, we knew how much we could shave a price and not lose money if we wanted to take a job at less than full value. Let’s face it, good diemakers that competition is still is based on having a customer agree to a price and in a competitive battle with another diemaker often you have to be price competitive. At least do it knowing your costs.

We had the luxury at the time of affording computer power to know our costs. Many small diemakers have not had the benefit of such a tool. Today, there are job costing programs available, but, I doubt if many diemakers are using these resources. Today if a manufacturer is pricing his products without knowing true costing, then they are in a serious situation. Most diemakers are still pricing dies “from the hip” hoping that they have a good month and make money. My grandfather and father could listen to the noise in the factory and tell if they were making or losing money. I also had that sixth sense, but, it was not as reliable as a computer printout backed up with accurate information in the computer system.

Many diemakers have their own price calculation lists that they use to generate a quote for a die or to use in billing out a die. Some pricing guides are more sophisticated than others, more reliable than others. Most rely on a gut feeling of what a die should cost. In the past no one has developed a universal pricing system for calculating the price of a die that any diemaker could use. Imagine if there was a simple cutting die calculation system that any diemakers could use. It could be a powerful tool to insure profitability in a company.

Richard Breiter, a German programmer with an excellent knowledge of the folding carton business in Germany has developed a steel rule cutting die calculation program called DIECUL. I have been working with Richard to bring his program to North America. This program when released can provide diemakers who produce steel rule dies a valuable tool in developing their prices for dies.

The DIECUL program inputs a folding carton design and using built up tables of materials and labor costs, calculates the sales price of a die. A diemaker must first populate the program with specifications of component parts such as different die blades, the dieboard, ejection rubber, punches etc. The cost of these items is also incorporated into the tables. An hourly shop rate is predetermined for calculating overhead costs. It is far more comprehensive than the simple basic cost estimation package that I would like to see developed, but it is a viable program worthy of investigation.

How many diemakers unwittedly give away part of their profit margin or even sell a die at below cost because they accept jobs not knowing their true costs. It seems to me that if more diemakers knew their actual costs, that there would be a lot less price cutting. At least if a price was cut, the diemaker would have full knowledge of what he was going to himself. I have said many times in the past that diemakers often are their own worst enemy in their pricing of dies. Selling on price is not the most intelligent strategy of gaining sales. We will explore other solutions in this article.

There are some diemakers who just can not resist the urge to take a job at any price to keep the shop busy. In other cases, a diemaker may let his emotions get in the way and cut prices to dislodge a competitor for a customer or as the Germans said to kill another diemakers. What they do not realize that such an action only kills the marketplace, lowering the value of all dies in the industry.

The Kill The Competition on Price Syndrome

Let’s take a look at the following scenario. Diemaker A has been doing business with his customer for a long time and charges a reasonable price for his dies and services. The diemaker is making a good profit on his work and the customer is receiving a fair value for his expense for die purchases. Now Diemaker B wants to get the business, so he cuts prices by 25% (or more) to get the business. His rational is simple. He will knock out Diemakers A and then slowly increase prices later on.

When I was a diemaker, I had several prime instances where one of my competitors (we will call him Diemaker X) deliberately slashed prices by 25 or even 30% to kick me out of a major account. By the way, Diemaker X was finally ejected by the customer for poor quality dies and poor service, but the damage they did in killing the price was everlasting. Let’s say that Diemaker X did continue to service a customer. By deflating the price levels 25 or 30%, he most likely diminished his potential to make a reasonable profit on his business with that customer. He probably could have won the business with a 10 or 15% lower price level. He probably could have taken over the business for possibly very little price discounting if he had done his homework to learn as much as he could about the customers diecutting situation, his possible problems and his expectations.

Initially my company was the bad guy in our ex-customers eyes. In his view we had been apparently over charging for our dies. After all, if someone else could sell dies for 30% less than our prices, we must be too expensive Right??? Well, wrong!!! Once the customer had an appetite for 30% off prices, it was impossible to charge more to get the business back.

Diemaker X had done a real stupid thing. He deflated the price of dies so much that he ruined a good competitive situation. The customer did not win in the long run. He got dies of a lower quality and poorer service. When we finally got the business back at substantially lower prices. The customer still demanded that we maintain our quality, provide die cuts of each die to match to his original patterns and expect the same super service we provided before the 30% price deflation. By the way, Diemaker X is now history. He went out of business. He joined the graveyard of diemakers just like my fictitious Not For Profit Diemakers Group did over a year ago. How many other Diemaker X’s are out there, doing their damage to the industry. If you are a diemaker reading this article, have you been guilty of the “killer” price cutting syndrome to get a customer away from a competitor?

If Diemaker X had full knowledge of his manufacturing, sales and service costs and had the manufacturing know-how to produce dies at 30% off our prices and still make a good profit, then he would have been a winner and my company would have lost the business because we were not competitive or we were truly over priced. When a diemaker slashes price to win a customer, every other diemaker who understands their costing of dies is in jeopardy. Unfortunately, we have too many diemakers who have used too excessive price reductions as a weapon, that has been a major contributor to the overall lowering of prices in the marketplace.

The other side of the equation . . . the Converter Customer

Diemakers may shoot themselves in their own feet from time to time in price competition, but, the customer is also guilty of often playing one diemaker against the other in the quotation game. Ajax Converting Company’s purchasing agent sends out four quotes for a set of dies. He gets the quotes in and then plays one diemaker against the other. The system goes like this. Diemaker A’s quote is for id="mce_marker"200. Diemaker B’s is for id="mce_marker"150 and Diemaker C is for id="mce_marker"075.00. Our sly purchasing agent wants to buy from Diemaker A, so he calls him up and suggests that he had several lower quotes about id="mce_marker"050 and if Diemaker A wants the job he will have to lower his quote. To keep the business, Diemaker A may say OK, he will take the job for id="mce_marker"040. The purchasing agent thinks he is a real cool character and has saved his company money. He pulled a slick one on the diemaker. I have proved in past articles that most converters, when they cost out the cost of running a job, in most cases, do not even consider the cost of the die because it is so small that it is insignificant in the total cost of the job. Several years ago we reported a study in the costing of folding carton jobs. The die cost less than 1% of the total cost of the job. A purchasing agent saving let’s say 5% or 10% of his die costs that is less than 1% of the total costs of a job by purchasing the cheapest die often is not doing his company any favors. He may actually be costing his money significantly more money than he saved.

That cheapest die may not be built as well as another die. Let’s face it, a die is a tool and anyone putting the cheapest tool into an expensive machine to save money often is not using good logic. For example, if a die does not work properly on a Bobst press and causes a 15 minutes downtime, the cost of the downtime exceeds the 10% savings of the cheap die many times over. Many times the production people live with this situation because they had no say in the purchasing process.

I am going to say something that may anger many purchasing agents or buyers. In my 40 years of selling cutting dies I generally tried to avoid working with buyers or purchasing agents. My rational in this matter is simple. In general, most purchasing people are paper pushers and are concerned primarily with getting the lowest price. In general they do not understand the needs or requirements of their production people. Often they do not supply a vendor with all the criteria needed to develop a complete price to make the best tooling for their company. There have been some good buyers, but these individuals usually had production experience. I have spoken to many diemakers and I feel that my viewpoint is the norm vs. the exception. I always tried to get inside the organization, side slip by the buyers and develop a working relationship with the design or production people who knew the value of good trouble free tooling.

If possible, I would always try to do business with the production managers because they know the value of good tooling. They want tooling that works right out of the shipping package, tooling that does not cause problems and does not cause downtime. They wanted reliability, consistency and tooling that runs well on their presses. They were more concerned with the before mentioned items than the cheapest price. They understand the value of good tooling. They understand working with a die supplier who totally understands their situation, knows the intricacies of their diecutting presses and understands that a die must be right the first time out of the box and work without any problems.

Unfortunately, the makeup of most buyers or purchasing agents does not give them a working knowledge of production problems. Wouldn’t it be ideal if individuals purchasing dies had to work in the diecutting department for a year before buying their first die? Management often issues a command to save money in purchasing. Purchasing agents or buyers therefore take their marching orders and their key motivation is to save money buying the least expensive products and services. Some creative Purchasing Managers have even created wonderful partnership concepts like. . “You will become our partner in business and be assured of future business if you accept a 15% cut in your prices so we all can be more competitive”.

This is no more than black mailing valued vendors to cut prices to retain business. I have seen these letters sent out to valued vendors. I have gotten them myself. My response has always been that I will provide their company with my best products, services and know-how at a reasonable price. I would not arbitrarily lower my prices because of a purchasing strategy to lower purchasing costs. What a way to create a lasting relationship with a gun to a vendors head. Cut your prices or else. The dilemma many diemaker suppliers face is that there is always seems to be some hungrier diemaker lurking in the shadows that will take the business for the 15% price reduction.

The solution may just be a serious one on one meeting with top management of a company outlining your services and commitment to provide excellent tooling and the know-how to make that tooling work well on the customer’s equipment. We have used this strategy in the past and in most cases it worked. We went to a customer armed with information on how we were his best choice to keep his equipment operating at top efficiency. We did our homework and made our presentation. Simply going to a customer without a good strategy of how you can affect his bottom line with savings in production is an exercise leading to a rejection.

In those cases where the customers management was not far sighted enough to value a current vendor, then walk away and find a better customer to service. Sounds tough, but it is the best policy unless you are willing to giving up a good chuck of your profit margin to a customer. See how long the other diemaker can exist by giving away his profit margin. Always be available to the customer to step back in at the right moment.

Diemakers don’t sell dies

I have told many diemakers that if they think that their primary business is selling cutting dies to customers then they are barking up the wrong tree. If they think that their basic business is selling cutting dies they are providing their customer with the wrong information. They are probably doomed to selling cheap and not getting their fair price for their product. Some diemakers have looked at me and thought to themselves that “Old Mr. Larson has gone over the edge and is a misguided soul.” After all, we are in a price guided marketplace and we have to live with competing on price!

Let me explain my rational. There are literally hundreds (about 1800 in North America) of diemakers out in the marketplace that can make a good die to customer’s specifications. Have 10 diemakers make the same folding carton steel rule die or any other design for a die and leave off all identification markings. All the dies will look somewhat similar to each other. They probably will all diecut about the same on a press. Some may use a better bevel on the die steel; some may rubber the die a little different.

To a typical customer the dies may all look to be about the same, so why pay a higher price when the cheapest die may seem do the job. This makes perfect sense to a die buyer, but, often makes little sense to an individual operating a die cutting operation who wants the best tooling so production can flow efficiently.

Many people talk about dies being commodity items. So, if you as a diemaker are putting all your sales efforts into selling the die, you may have missed the point. You may never be in a position to get the real value for your product that you demand for all the work that you put into your product. You just may never realize your full profit potential for all your efforts in producing fine tooling.

The customer wants more than a tool. He wants reliability. He wants a tool that will make his cutting press operate a peak operating speeds. He wants a die that is ready to put on the press without having to tweak this and that before the die is ready for production. Often the cutting die is but one element in a whole tooling package. For example in cutting folding cartons, the die works in symphony with the contemplate, the blanker and the stripper. The customer wants one supplier who can provide for and be responsible for the complete tooling package. He wants a supplier who totally understands his production problems and knows how his equipment should operate. In the political world of Bill, he wants a supplier who understands his pain and can minimize or remove his pain of obtaining optimum profitable converting.

Good customers are more interested in solutions to problems. They are more interested in working with a vendor who can provide solutions to improve their production and save money in the production process. They want a savvy supplier who works with them as a partner. Not just a diemaker who ships in a die but does not totally understand how and where that die is going to be used. Many diemakers unfortunately have no idea of what type of press that a die is going to be used on. Many diecutting buyers do not tell a diemaker what cutting press that the die will be used on. How can they then manufacture a piece of tooling that is designed to optimize the running speeds of that press?

You can now see that the successful diemaker more importantly sells knowledge, expertise and “Solutions” to improve the diecutting process in a customer’s plant. The successful diemaker lives with a customer, knows his machines, know the materials that the customer must cut and knows how to provide cost saving solutions that make a vendor a real asset to a customer. If a diemaker can show a customer how to increase the running speed of a press by 5% or 10%, from 4500 sheets per hour to 6500 sheets per hour, for example, using his tooling than the diemaker has shown how his tooling is of extra value in affecting the customer’s bottom line profits. The diemaker is then truly “A Cut Above The Rest” of the typical pack of vendors. He has sold much more than just a basic cutting die.

There are a number of diemakers who have learned this concept of providing solutions to customers. Providing superior tooling that is reliable and trouble free, which will in fact run better on a press, is of key importance to a customer. Those diemakers now have the power to ask their fair price for a die. When a situation arises where Diemaker X tries to enter the scene, the customer is far less willing to give up a trusted and valuable relationship with a vendor.

Over the years as I was manufacturing cutting dies I developed close working relationships with many cutting press manufacturers. We offered to work with them to develop tooling that solved their customer’s diecutting problems. We took that extra effort to know everything we could about their diecutting press systems. Press manufacturers want to recommend diemakers who make their presses look good, that do not cause any problems in diecutting. Bobst has created their ABC book on how to make dies to properly run on their Autoplaten presses. I bet most diemakers making folding carton dies do not have a copy of this invaluable reference book.

Some diemakers have learned that their best friends are the cutting press machinery companies. They get to know their technical people, learn what problems they have and provide solutions. They learn how to custom tailor their dies to optimize press performance. Then when a diecutting customer asks a cutting press salesman or technical person where to get their dies, a person recommendation means a lot.

The El Cheapo Diemakers will always be around selling in price. It is my hope that maybe some diemakers and some converters will take what I have said to heart. True profitability for a vendor and customer is when they can understand each others situation to both make a good profit in a business relationship. They must both feel each others pain (There I go with Bill’s pain comments again).

Some diemakers are truly a cut above the rest of the bunch of common everyday garden type diemakers. The question, my good diemaker, is . . . are you “a cut above” or just one of the pack of wolves snipping away at getting orders at any prices. Do you have the tools to become “a cut above” the rest?

What are the tools?

Education and training are key tools. If you as a diemaker lack formal training in business management ei., understanding your companies financial situation, how to prepare a sound business plan, how to create a database of actual and potential customers and how to calculate the prices of your dies according to the basic elements of materials, labor and overhead plus a reasonable profit, then seek out resources that can teach you those skills. Take evening courses at a local institution of learning. Take the time to self educate yourself.

The smart get smarter, savvier in the ways to be competitive. Learn as much as you can about your customers manufacturing process. Find out what types of die presses he has operating in his factory. Contact the press manufacturer and ask for information on the best ways to provide tooling to optimize the running speeds of their presses

Take the time to watch a press run. Have your diemakers visit your customer and talk to the press operators. A little one on one communications can do wonders to let everyone understand the other person’s needs and expectations. That minimizes the press operator blaming the diemaker and the diemaker saying that the press operator is the blame when things do not work properly. Your diemakers will understand why a die has to be made a certain way to accommodate the needs of their customers. Seek out people who are the best in their specialized fields of expertise and learn from them. Educate, educate and re-educate yourself and you employees. The time and effort put into training and education has great pay backs in the future. Those companies who invest in training and education will be the winners.

I have spent a great amount of time in Asia. I am a very good people watcher. I have watched office people and sales people taking a computer apart to better understand how it works. Take it apart and put it back together. Do it several times. Understand how the components inter-relate with each other. Could not the same approach be used in our industry? Take time to understand why a high speed folder gluer really needs accurate repetitive diecut parts to eliminate jams in the process. Find out why one rule outlasts another rule in production. Find out why some dies are made that require one fourth of the makeready time than others. Find out how to balance the platen on an automatic platen press. Find out why one type of ejection rubber will bounce back faster than another. Find out how to squeak out an extra 5% of diecut parts per hour out of a die cutting press for a customer.

Do those things and you will be more valuable to your customer. He (or she) will want you as their supplier because you are providing solutions that can save the company money. You are more valuable to the company than just a diemaker who sells cutting dies. You expertise, your problem solving abilities are worth money to a company. You are providing a consulting service and that service has value to your customer. The price you ask for these services is a reasonable price for your products.

Produce your products smarter

A reality of life today for diemakers is that they compete in a marketplace where many customers do not have a high regards for diemakers as professionals. Prices for their dies are deflated therefore often keeping profit potentials low. To counter this perception, diemakers must learn how to produce dies more efficiently and reduce their costs in the process to increase their profits. The key in this equation is reducing the labor content in the product or making existing labor work more efficiently as labor is a major cost in any die. A whole other topic for an article is the re-engineering of the typical cutting die manufacturer. I have been into a number of die manufacturers that have truly re-engineered their production process utilizing new techniques in systems and equipment.

This can be accomplished by investing in new technologies and labor saving systems such as automatic rule processors or automatic or semi-automatic rule benders. To afford these investments, a diemaker must first be able to finance the investment in some manner. If Uncle Willie has a spare $200,000 in winnings of the lottery, you could coheres him into investing in your future. Most likely this is not the case and you must seek out some sort of financing. Your first step is developing a sound business plan that forecasts future growth and the ability to repay your debt. Creating a business plan can be a painful but enlightening experience that few diemakers have ever attempted. Not only will a business plan lay out a clear and concise road map to success, it will open your eyes to your costs so you can more intelligently price your products. I could go on and on in this subject, but, that is a topic for a later dissertation.

Let the other diemakers live in their misery of discounted prices, thinking that they sell cutting dies. Don’t let them know that your newest products are selling solutions, selling cost savings in production and selling your ability to save your customer time and money in their production process. Don’t let your competition discover that you can command your own price for your dies and your customer is happy to pay that price as a small payback for the bottom line savings that you have provided to your customer. Then you can truly smile to yourself and say “ I am truly “a cut above” the rest.