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Each injection molder's cost estimation methodology is unique

Using different injection molders' methodology to estimate the cost of manufacturing a product is tantamount to taking someone else's prescription medication. You might get some benefit out of it, but there could be dangerous side effects that your medical history would have prevented a doctor from prescribing that medication for you.

During my quarter century in practice, I've developed costing models for a half-dozen injection molders and each one had unique features caused by the way the company operated and the customers/markets it served. There are certainly issues common to all injection molders, but it's incorporating those unique features that prevent a molder from inadvertently selling products at lower than its hoped for margin (or a loss) or missing out on jobs it could have sold profitably at a much lower price.

A simple product costing model might work for a simple high-volume "shoot and ship" injection molding business, but with the demands of the 21st Century marketplace those types of injection molders are few and far between. If you provide other value-adding services, have some products that allow regrind and some that don't, have crew sizes that vary based on equipment cycle time, manufacture high-volume or low-volume products (or both), build to stock or build to ship, have inserts for some products but not for others, or any of the myriad of variations that can exist in an injection molding business, a costing methodology that's not designed specifically for you can lead to an unprofitable portfolio of business.

Remember, you get a lot of unprofitable business when you don't charge the customer for work that you do for them and you lose out on a lot of business that you could have sold profitably when you try to charge them for work that you don't do for them. Also remember not to confuse "cost estimating" with "price justifying." Failure to distinguish between these two, totally different processes has led to the failure of many manufacturing companies, including injection molders.

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