Molds Really Are Brutally Expensive in Manufacturing

It’s true. Molds are the single biggest risk factor in manufacturing, squeezing both schedules and wallets.

For example, making even a simple box, something as basic as a two-piece structure that clamps together, can cost several million yen depending on the case. If the structure is complex, or it requires multi-color molding with multiple materials, or there are tight precision constraints, the cost climbs further, and cases exceeding $76,000 are far from rare. For large resin parts like an automobile’s front interior panel, molds reportedly can cost more than $380,000.

A large initial cost complicates pricing decisions. Amortize a $76,000 mold over 10,000 units and you end up adding $760 per unit. Amortize it over 1 million units instead, and it’s only $7.60. Depending on how you handle this, the selling price can shift by thousands of dollars.

It would have been nice to offer some trick like “do this and your mold costs drop to a tenth,” but unfortunately no such convenient method exists. So I’ll limit myself here to introducing a few basic cost-reduction techniques.

This is a technique for producing multiple parts from a single mold. In some cases, these could even be parts for a different product. The former reduces the mold cost itself, while the latter increases the number of units over which it’s amortized.

Shared tooling requires certain conditions to align, so you can’t apply it indiscriminately. A simpler and more effective approach is to reduce the number of parts in the first place. This demands skill on the designer’s part. But fewer parts and a simpler structure also reduce assembly man-hours, which is itself a direct cost reduction.

There are two angles here. One is delaying the timing of mold production as much as possible. You need to seriously consider at what stage of prototyping a mold actually becomes necessary, because making changes after a mold has been produced costs both labor and money. In some cases, it risks having to remake everything from scratch. As long as the schedule allows, starting mold work as late as possible and locking in the design from that point on is a quietly effective way to prevent cost increases down the line. The other angle is whether there’s an option to make the product without a mold, or with a simplified mold. Generally, when production volumes are low, amortizing a mold becomes a serious headache, but simply raising the selling price to compensate makes sales difficult. In such cases, it’s worth considering a simplified mold. “Simplified mold” covers a range of things, but essentially it refers to a mold that skips the processing needed to boost durability and maintain precision. As a result, the shot count (the number of times it can keep delivering the required performance) is lower. Still, if production volume is low, there are likely aspects where some compromise is acceptable.

Mold prices are heavily affected by raw material prices. Molds use various types of steel depending on the target application, and the work itself involves cutting, surface-treating, and assembling them, a demanding but long-established and common process. The raw material, though, is a large chunk of metal. Availability can be an issue, and it often causes unit prices to spike. Rather than assuming “we always ask so-and-so,” get multiple competitive quotes each time. That’s what lets you build the mold at the optimal price for the moment.

Molds really are a major risk factor, and there’s no cheat code for them. Still, it’s disheartening to see them become the bottleneck that keeps a product from reaching production. Don’t give up thinking there’s nothing to be done. Seek support from professionals and keep stacking up small improvements.

The content of this post is an excerpt (original text) from the following book. If you’re interested, please pick up a copy.

The Shape of a Happy IoT Startup

The Shape of a Happy IoT Startup

Originally published in Japanese at https://clazytech.com/2022/08/1125/. Translated with LLM assistance and reviewed before publication.