New technology always ends up costing more, but injection molds have been around for a while. Since they have largely become the norm in many industries, their cost has already taken the inevitable shift to being more affordable. However, that is not the only reason for the decline in costs for injection molds.
The Costs of American Labor is Declining, While China is Rising
The costs of manufacturing in the US has made it a more attractive market for businesses to keep or move their manufacturing processes back to the US. According to a study done by Oxford Economics, the 2003 rate for labor costs in China were 42 times lower than the same tasks and processes in the US. As of the early part of 2016, the difference in labor costs was only 4%. While this does mean that it is you can still save money to send work to China, it doesn’t offer the savings it once did especially if there are any quality issues, and logistically it is can be cumbersome unless the mold making is managed domestically.
The US Productivity Rate Is Increasing
One of the reasons American costs are going down is the improvements to processes and productivity. With workers completing products faster, lead times and manufacturing times are decreasing. This means that businesses can offer their products faster without having to sacrifice quality. With injection molds, that is even more beneficial because they already help to significantly reduce time. By eliminating shipment times, many industries are finding US manufacturing a better option for quicker turnarounds.
Increase in Demand Means Reduction in Cost
Businesses are looking at the change in their costs and finding that producing goods abroad simply isn’t worth the results in some cases. The drawbacks to shipping manufacturing offshore (including lower quality, risks to intellectual property, and requirements for orders) are no longer something that can be ignored since cost and productivity are not the major benefits they were 10 or 20 years ago. As more businesses choose to keep their businesses close to home, more tools are becoming more readily available at lower costs in America.
Costs are not the only consideration, particularly for injection molds, but this aspect does tend to be a major factor in determining where businesses will choose to send their manufacturing order. However, there are a few other factors that are helping to bring the work back to the US, such as easier communication and better response times since manufacturers are in similar time zones. If off-shore savings is important, then speak to us about our off-shore capabilities with domestic management of all projects.
Topics: Injection Mold Making