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Technology Focus

Should You Have an In-Plant Dieshop? No and Yes

by Robert Larson, President of Larson Worldwide, Inc.

May-June, 2001
Over the years, the question of whether or not a company should consider having their own in-plant cutting die manufacturing facility has been a recurring topic. This is also a very delicate subject to many diemakers. They see a loss of business whenever a customer decides to produce his own dies. A diecutting converter considers such an action as a possible solution to reduce the cost of tooling and to get his dies to the diecutting department faster. This situation is universal. It has been brought more to the forefront today with automated equipment, especially with the steel rule diemaking process. There is no easy “yes” or “no” answer to this question. Before delving into the subject, I would like to tell a story based on my experiences in the industry as a commercial cutting die manufacturer, as well as a diecutter. I have lived on both sides of the street, so I can appreciate both points of view. As an industry consultant, I am often asked if it is a viable solution to create an in-house die making facility.

My story involved a consulting assignment where I was called into a company in New York state who diecut gaskets and filter materials. This company primarily produced the materials to produce gaskets and filters and diecut some of those materials in-house into parts for customers. They were having problems with their diecutting operations. I found two underlying reasons for their problems: the diecutting equipment that they were using and their cutting dies. They were using old mechanical punch presses that needed repair and reconditioning. I recommended that they take on a program to rebuild their present equipment or investigate newer, more efficient diecutting presses.

They also made all their own dies in a large machine shop. When I asked why they made their own dies, the response was that there was no diemaker that could properly take care of their requirements. I immediately saw a problem in their thinking. They were using all solid milled dies and lathes and they did their own heat-treating. The design of many of the dies was totally inappropriate for the cutting requirements and their diemakers were all old machinists who had little to no exposure to any diemaking knowledge outside of the company. They were producing expensive machined dies when far less expensive steel rule dies could have done the job, in most cases. This was a case where management had perpetuated an uneconomic, unsatisfactory situation for years.

First, I recommended that they go outside the company for their cutting dies, at which time they soon discovered the errors of their past ways. They closed down their in-plant shop and purchased their dies from several diemakers depending upon what type of dies they needed. Finally, they closed down their total diecutting operation and subcontracted their diecutting requirements to a commercial diecutter. They opted to let someone else handle the diecutting of their customers’ specialty parts and returned their focus to producing materials. They still provided customers with die cut parts when requested, but, by partnering with a local commercial diecutter, they got the “diecutting monkey” off their backs. The commercial diecutter produced die cut parts more economically and with a better quality than they were able to in the past.

Do what you do best

A very true concept in business is to focus on what you can do best and commit to remaining focused on your core competencies, whether you are a trade finisher, folding carton house, or other manufacturer. Theses businesses are good at what they do and have created excellent processes to produce their products. Does it make sense to bring in-house a foreign manufacturing process that will divert energies and resources from their prime objectives? The answer is “no” and “yes”. Let me explain. First of all, I am a firm advocate for not re-inventing the wheel. If someone is an expert in producing something and has developed a lot of expertise in developing that product or service, it just does not make sense to try to duplicate the effort. It’s just too time consuming and costly.

A matter of partnering and communications

Over the years, I have seen many situations where a company has been driven to consider investing in their own in-house diemaking capabilities because of a lack of communication between the company and their die supplier. I have heard many stories that a diemaker does not understand the company’s problems in diecutting: the diemaker never visits the company to see what is going on; the delivery times are too long; the dies are not what the customer expected; or the dies cost too much. Often, whoever is ordering the dies has one prime objective - to buy the cheapest die to get the job done. Company policy dictates that three quotes be obtained on dies; then select the lowest cost. After all, aren’t all dies the same?

This all boils down to a diemaker and a diecutting converter developing a relationship and a partnership to provide the best tooling to make a diecutter’s press work at its optimum performance. This is accomplished by developing dialog or communication between the two parties. They both have to appreciate the fact that each “partner” has special skills and problems and that both have to make a reasonable profit in their individual activities. This concept does work. There are many examples where diemakers work closely with their diecutting counterparts to each other’s benefit. After a while, the diemaker becomes an integral part of the customer’s operation and they go beyond the problem of “discount pricing”.

Let’s look at the other side of the situation. Let’s talk about why it may make sense to have an in-plant diemaking facility. First, let me identify two types of in-plant cutting die facilities. The first one is a facility that can produce whatever dies are needed to accommodate production requirements. Management may determine that because of rush of delivery concerns, in-house built dies can improve production. The second type of in-house diemaking facility is what I call the repair or re-rule facility. A converter will still rely upon a diemaker to produce his new dies. When it comes to repairing a die, replacing a section of rule in a steel rule die, or re-ruling a die, that work can be done in-house. When a new die is purchased, several sets of blades and creasing rule will be ordered along with the die. Today, many companies are using waterjet cut die ejectors. Several extra sets of ejectors will be ordered for future re-rulings. This type of a shop makes perfect sense in many operations.

Some considerations

In the past few years, there have been numerous advances in how to produce steel rule dies. You used to require an all around diemaker who could produce a die from laying out the dieboard to rubbering the die. It was a challenge to find, and keep, such a person.

Today, that has changed, as most die designs are prepared in a CAD department. The CAD file is sent to the diemaker. If the diemaker does not have a laser to prepare the dieboard, he/she can modem the file to another diemaker who laser burns the dieboard. With the use of a steel rule processor and bender, the same file can create all of the bent rules to be placed into a dieboard. If a diemaker cannot afford a laser to burn the die lines in a dieboard, he can consider other options, including the Gerber Profile routing machine system (see Technology Focus, page 51 of February/March issue of InsideFinishing). A lot of the labor has been taken out of the diemaking operation. CAD driven automatic diemaking equipment handles many of the previous all labor-intensive operations.

It is only natural that many converters may look at these new diemaking systems and determine that they can bring the diemaking operations in-house. One important factor that they have to consider is does it make sense from both a quality and productivity point of view.

All cutting die tooling is the same

This is what many converters think today as they instruct their purchasing people to buy at the lowest price. This is the commodity syndrome. A converter should be purchasing cutting die tooling that can make his cutting die presses operate at their maximum levels of productivity. Dies should be prepared to be put on a press with the absolute minimum of set-up time or makeready. With proper tooling designed to maximize the diecutting process, it is possible to maximize the profitability of each cutting press system; it is possible to run one or more jobs a day with minimal downtime. This can only be done with the proper tooling, which increases productivity and profitability. A good commercial diemaker knows from experience how to create tooling that can optimize the profitability of a customer’s press. If your present diemaker cannot do this, then it is time to discover another more forward thinking diemaking supplier.

Often, people in an in-plant diemaking facility just do not have the opportunities to reach out and see how to do things better. They do not have the opportunity to see different types of applications that can bring them new ideas on how to improve tooling. Quite often their in-house built dies are not as good as a commercial diemaker’s. Management may live with that situation and accept “good enough” tooling, where in fact they should be demanding innovative solutions to maximize productivity.

Some are excellent

I do not want to cast an unfair light on all in-house diemaking facilities. Some facilities that I have seen are first rate. The management of these companies has invested in equipment and training to produce first class tooling and let their people go outside the company to discover the latest and greatest in diemaking and diecutting information. On the other side of the situation, I have seen even more in-plant dieshops that just do not reach the level of commercial diemaking operations.

What is the answer - yes or no

First of all, I encourage diecutting converters to develop and maintain an excellent relationship with a commercial cutting die manufacturer. Insist on quality tooling and a partnership in your diecutting operations. In doing so, you will get the best tooling at the most reasonable prices.

I also encourage each diecutting converter to have an in-house diemaking maintenance operation. It just makes sense to have a facility to repair a die, make a slight modification or re-rule a die close to your diecutting operation. This can reduce downtime in the middle of a run. The cost of setting up such a facility is within reason and, I believe that it is a cost-effective solution to maintaining productivity.

If you should decide that it makes economic sense to create your own in-house diemaking facility, do your homework first. Does it make sense to divert your manufacturing resources to produce your own tooling? Do you have the management people to manage this new operation? Check out the costs of investing in equipment, training personnel and maintaining the operation. In a number of cases, the cost of the in-house produced die is equal to or more than the one made outside.

An answer?

I hope that I have at least opened the door to questions concerning the positive or negative factors in determining if it is logical to produce your own cutting die tooling. Again, I go back to one of my original thoughts - management of every company must remain focused on its core competencies. It is not always logical to try and reinvent the wheel. Let the other guy do what he does best. When it comes to cutting die tooling, think twice before you decide to save money and possibly accept ‘just good enough’ tooling from your in-plant diemaking operations when you would never accept that quality from your commercial die tooling provider.

Robert Larson is President of Larson WorldWide, Inc. He has many years of experience, as a cutting die manufacturer and a commercial die cutter. Robert is a charter member of the International Association of Diecutting and Diemaking. He provides international consulting services in the diecutting industry. Visit www.dieco.com to learn more about the diecutting process.