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For Quality Overseas Molds, Don’t Call a Broker

Mon, 06/08/2009 - 6:19am
The ideal method of doing business in a fast-growing nation like China is for a firm to place its own personnel on the ground.
The procurement of overseas molds would be a snap if all an American firm had to do was call a broker to act as an intermediary, request bids on new projects, and then choose the best of the lot. However, some domestic tool companies are learning that the risks outweigh the rewards when trying to do business in a foreign land. And sometimes, the broker that was hired to smooth the way actually impedes progress due to inexperience with the language, culture, and basic engineering concepts.

Robert Hollis, who for three years has been a senior project engineer for Emerson Tool Company, has seen the best and worst of overseas business transactions. Before joining Emerson, Hollis worked for a firm that blindly engaged the services of a Chinese mold maker and paid dearly for it. “It was a nightmare. Everything was wrong with the mold. We patched it up as best we could. You do what you have to do. But we limped into production, and then had to have a second tool built.”

Brokers often have very little interaction with Chinese firms beyond email. They are merely the stateside go-between. They solicit the order, and then mark up the price to cover their own fee. But when it comes to refining tooling engineering designs, enormous barriers of communication can cause a great deal to be lost in translation. And with little or no oversight in China or elsewhere, substandard materials and unacceptable quality control too often become the order of the day.

The ideal method of doing business in a fast-growing nation like China is for a firm to place its own personnel on the ground. They become the eyes, ears, and conscience of the company. They provide training and hands-on experience. They demand a standard that equals or surpasses American standards, from an eager but under-developed work force. But what if a company doesn’t have the resources or personnel willing to begin a new life as an ex-patriot to set up shop on Chinese soil?

Offshore Molds, Inc. (OMI), a full-service Colorado management company has over 125 years of combined experience in mold making.
“Everybody knows you can get some good prices in China. But it’s difficult to deal with them unless you have a presence on the ground. You’ve flat-out got to have someone standing over them. We didn’t want to do that, so we use the services of someone who does,” Hollis said.

Unwilling to work with brokers, and reluctant to commit vast resources for an overseas plant, Emerson enlisted the services of Offshore Molds Inc. (OMI), a full-service Colorado management company with over 125 years of combined experience in mold making. They use the latest CNC equipment and have at their disposal 1,000 professional mold and die makers. Hollis said the association has proven to be an ideal way to take advantage of the large discounts China offers without sacrificing quality and dependability. OMI’s bid was about 30% less than the nearest U.S. toolmaker and OMI was as fast, if not faster, than other American firms, according to Hollis.

Also, while the molds were built and tested on Chinese soil, they underwent a 100% tear down and inspection process before they were shipped to the states. The molds were then shipped to OMI’s Denver facility for additional engineering changes before being sent to the Emerson facility in Mexico.

Additionally, all warranty and support services are provided here in America. When an adjustment was needed on one of the molds, OMI sent a team to Emerson’s plant and the problem was resolved quickly. Don’t expect the same service from a broker who has already received his pay out. “OMI’s support is excellent, definitely not fly-by-night. Building relationships is important to them, so you get good sales support. They want to make sure you’re happy with your purchase,” Hollis said.

OMI established its own office and personnel in China more than five years ago when it recognized that numerous American companies were being burned by broker-assisted deals. The problems were legion: some molds used inferior parts; grade of steel and some components were poor; and the engineering was done by recent graduates who were proficient in AutoCAD and ProEngineer software programs, but lacked mold-making knowledge. The Chinese manufacturing industry and demand for inexpensive molds had grown so fast that many young, inexperienced people were placed in positions of responsibility for which they were not properly prepared. By setting up its own team, OMI could manage the tooling process and teach the Chinese to build to American standards.

With approximately 50 percent of domestic firms now going overseas for molds, the demand for full-service tool management firms with in-country facilities will likely grow.
Hollis was dispatched to China to oversee the final production stages of Emerson’s project, which involved sophisticated molds that included complex tool design requirements. There was no reason for concern because the early stages of production had gone well. Emerson engineers created the design and then sent the 3D plans to OMI for review. Hollis and his colleagues would love to believe that when a design is done, there are no changes to be made, but they know better. The concern is that the revisions will slow down the process. While adjustments to the Emerson designs were necessary, OMI reacted quickly, a quality that impressed the Emerson staff. When Hollis finally arrived in China, he was not disappointed. OMI’s personnel managed the design and shop floor from China, while their colleagues in Colorado were communicating with stateside Emerson engineers. OMI remained intimately involved at every stage of design, production, and delivery.

“I traveled over there and reviewed the facility. It’s first class, very impressive. They ran the tools onsite, and had the parts inspected the same day. When we made changes, OMI responded quickly. China is halfway around the world, but OMI was there to make sure the tooling design met American standards,” he said.

With approximately 50% of domestic firms now going overseas for molds, the demand for full-service tool management firms with in-country facilities will likely grow. That’s fine with Blane Stone, OMI vice president. But he has one request.

“Just don’t call us a broker, because a lot of people have been burned,” he said. “We understand what it is American molders want when it comes to molds and tooling. And we’re managing it for companies that don’t have resources to go over there and do it for themselves. If you’re going to be successful, you have to manage the Chinese. Educate them to quality standards and engineering techniques and everyone will be happy.”

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