DDIN Library

SHOULD YOU HAVE AN IN-PLANT DIESHOP? The Answer: NO & YES

Details: Written by Robert Larson

Over the years the question of whether or not a company should consider having their own in-plant cutting die manufacturing facility has been a recurring topic. There is no easy “Yes” or “No” answer to this question. Before I delve into the subject, I would like to tell two stories from my experiences in the industry.

Two Stories

First is the story of the intimate apparel manufacturer. As many of you know, I grew up in the diemaking industry. My family operated Boston Cutting Die Company in Boston, Massachusetts. Since 1912 until 1984 we produced clicker and high dies, steel rule rules, close tolerance dies and multi-contour trim dies. One of our specialties was producing heat treated clicker dies. One of our customers was the largest manufacturers of brassieres and girdles. We made all or most of their cutting dies for many years. Our sales to this one customer often exceeded $ 250,000 a year. They were a very demanding customer. We had an excellent business relationship. They insisted on dies that exactly fit their patterns and met all of their quality standards. They looked to us as their “problem solvers” in creating the right die construction and cutting edge to cut different materials. We knew their expectations and their diecutting process. We knew their people. It could be said that we had an excellent relationship. We enjoyed their business and they relied upon us for their cutting dies and our knowledge of the diecutting process.

Then, someone in their company decided that they could save money by bringing the diemaking process in-house. They decided to create their own pre-ground pre-sharpened clicker die manufacturing facility. Almost overnight, we lost a major customer. Needless to say, we were not too happy about this development. On the other side of the coin there was not too much that we could do about the situation.

The bottom line was that the customer could not produce the same quality of die that we had provided to them for many years. I look at this situation as a lose - lose situation. We, the diemaker lost a good customer and a good chunk of business. The customer lost because their diecutting operations suffered from using dies that were substantially less accurate and durable than in the past. The quality of their product was reduced. The customer no longer had the expertise of a diemaker to innovate and create new solutions to present or future material applications. The truth of the matter was that as long as one certain executive in the company remained with the company that he would perpetuate and justify the use of their in-plant die shop even though his design people and production people had to live with the problem.

From a company point of view, their annual cost of purchasing cutting dies, probably was reduced. They could turn around faster in getting some of their dies from the pattern stage to the diecutting press faster in many cases. They saved on transportation costs. As I mentioned before they were now using lower quality less accurate dies. This probably did not concern the financial mind of the executive who bought into this process. It did concern the people in production. They soon learned to live with the situation.

My second story involved a consulting assignment where I was called into a company in New York state who diecut gaskets and filter materials. This company primarily produced materials for gaskets and filters. They diecut some of those materials into parts for customers. They were having problems in their diecutting operations. I found two underlying reasons for their problems. First the diecutting equipment that they were using and second their cutting dies. They were using old mechanical punch presses that needed repair and reconditioning. I recommended that they take on a program to rebuild their present equipment or investigate newer more efficient diecutting presses.

They also made all their own dies in a large machine shop situation. When I asked why they made their own dies, the response was that there was no diemaker that could properly take care of their requirements. I immediately saw a problem in their thinking. They were using all solid milled dies machined on Bridgeport milling machines and lathes. They did their own heat treating. The design of many of the dies were totally inappropriate with the cutting requirements. Their diemakers were all old machinists. They had little or now exposure to any diemaking knowledge outside of the company. Where they were producing expensive machined dies where as far less expensive steel rule die could have done the job in diecutting their materials in most cases. This was a case where management had perpetuated an uneconomic unsatisfactory situation for years.

I recommended first that they go outside the company for their sources of cutting dies. They soon discovered the errors of their past ways. They closed down their in-plant shop. They purchased their dies from several diemakers depending upon they types of dies that they needed. Finally, they closed down their total diecutting operation. They subcontracted out their diecutting requirements to a commercial diecutter. The bottom line for this company was closing a gapping sink hole of lost revenues by making their own dies and attempting to diecut materials using old inappropriate equipment. They opted to let someone else handle the diecutting of customers specialty parts. They returned their focus onto producing materials. They still provided customers with die cut parts when requested, but, by partnering with a local commercial diecutter, they got the “diecutting monkey” off their backs. The commercial diecutter produced die cut parts more economically and with a better quality than they did in the past.

Do what you can do best

A very true concept in business is to foucs what you can do best. An example of this is the baker who makes the best pastries in town. He is known for his pastries. He packages some of his pastries in a unique box. He can buy the boxes from a supplier, but he thinks the cost is too much and the delivery is slow. So he decides to make his own boxes. He has some spare room and sets up to make boxes. After all, the space cost him nothing because he has it. He can now make only those boxes he needs for near future sales. He can use one of his bakers who is not always busy on other tasks. He likes the idea of controlling his various elements of the business. But, does it make economic sense to divert ones resources and energies? Is he actually saving money or just overlooking obvious costs that in the long run is costing him more than purchasing his boxes from an outside source?

This situation is similar in many respects to many other manufacturers. They manufacture, leather goods, folding cartons or surgical appliances. They are good at what they do. They have created excellent processes to produce their products. They are focused on producing the best products. Does it make sense to bring in-house a foreign manufacturing process that will divert energies and resources from their prime objectives? As I said in the title of this article, “No” and Yes”. Let me explain.

First of all, I am a firm advocate of not re-inventing the wheel. If someone is an expert in producing something and has developed a lot of expertise in developing that product or service, it just does not make sense to me to try to duplicate the effort. It’s just too time consuming and costs too much. It diverts ones efforts and resources from their prime mission or objectives.

A matter of partnering & communications

You may sense from what I have written so far that my basic tone of this article could be on the negative side of creating and operating an in-plant die shop whether it be a steel rule or clicker die facility, depending upon which types of dies your may require to cut out your component parts for your products. Over the years, I have seen many situations where a company has been driven to consider investing in their own in house diemaking capabilities because of a lack of communications between the people in a company and their diemaker or diemakers.

I have heard many times stories that a diemaker does not understand the companies problems in diecutting. The diemaker never visits the company to see what is going on. The delivery times are too long. The dies are not what the customer expected. The dies cost too much. Often, who ever is ordering the dies, has one prime objective. That is to buy the cheapest die to get the job done. Company policy dictates that three quotes be obtained on dies. Then select the lowest cost. After all, aren’t all dies the same? Doesn’t every diemaker make about the same quality die? What’s the fuss, shouldn’t any die do the job?

This all boils down to a diemaker and a diecutting converter developing a relationship and a partnership to provide the best tooling to make a diecutters diecutting presses work at their optimum performance. This is accomplished by developing an excel dialog or communications between the two parties. They both have to appreciate the fact that each “partner” has special skills and problems and that both have to make a reasonable profit in their individual activities. Folks, this concept does work. There are many examples where diemakers work closely with their diecutting counterparts to each others benefit. After a while, the diemaker becomes an integral part’s of his customers operations and they go way beyond the problem of “discount pricing”.