How Germany does it

Canadian toolmakers are concerned that they’re now among the world’s most costly to use. Yet Germany’s moldmaking industry, with even higher cost structures, is prospering. Horst Schmidt, president of the Canadian Tooling & Machining Association told a CTMA meeting last month that a disciplined approach is paying dividends for German tool builders.

We are now one of the highest cost MTDM source in the world,” Schmidt said. “Most of our customers are declining and releasing less work, or sourcing their work in lower cost countries. Customers are slow paying, and all our input costs are increasing.”

Germany, by contrast, is taking a different attitude to the business.
“They are managing their customers rather than letting their customers manage them,” he said. “They complete 100 percent of the engineering and part analysis before they start the build, minimizing costly and disruptive changes during the build. They know their true detailed costs when they quote.”
German moldmakers are fully booked out well into 2008 and they are shipping tools into China. They are succeeding despite more stringent work place safety regulations than Canada has, an enforced 35-hour work week with no overtime permitted, the highest labor rates for the least hours worked by any worker in the world, high tax structures, little or no government assistance, and tooling costs well above comparable Canadian costs.

“A German tool supplier’s objective is to understand the complete system for which he is designing and building the tool so that the tool is properly thought out for the overall process rather than the production of the part,” Schmidt said. “The supplier then becomes part of the production team working with the customer to provide the best tool/part solution for the process.”

By contrast, he observed, most Canadian moldmakers want to acquire the basic information necessary to get on with designing and building the tool. They then move forward and builds the tool to produce the part, building according to print.