Purchasing advice: The 500-mile rule, or “You ship molds and parts HOW far?”

07/12/2011

There is no turning back the clock on the global nature of the logistics business, but that does not mean that every transaction you conduct requires a global sourcing plan. In fact, argues injection molding consultant Bill Tobin in this article, you can get pretty much everything you need within 500 miles of your facility, and save money and trouble doing it too.

The "500 mile rule" in plastics manufacturing is probably a subset of Murphy's Laws: (1) For plastic parts: The bulk density of plastic parts is too light to ship parts farther than 500 miles because the cost of freight added to the manufactured cost would point more profitably to a molder closer to the customer. (2) For molds: Shipping and insuring a mold to travel more than 500 miles usually alters the overall mold cost enough to justify a local source. (2.a) Mold repairs, warranty work, etc. take too long and become too expensive because of freight costs.

Back to the beginning: The potential customer sends you a request for quote (RFQ) and you submit your quote. The buyer gathers in all of the RFQs and other information he can find, and looks at the mold cost and the part prices. Somewhere in his lizard-buyer-brain he picks the successful vendor, calls him up, haggles both the mold and price down a little more; and places the job. ...
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