This news article was originally written in Spanish. It has been automatically translated for your convenience. Reasonable efforts have been made to provide an accurate translation, however, no automated translation is perfect nor is it intended to replace a human translator. The original article in Spanish can be viewed at La tecnología moderna es más económica que las bajas prestaciones

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Modern technology is cheaper than low benefits

Gerd Liebig, Christoph Derrida, Demag Plastic Group15/05/2005

Awareness of costs. The European technical standard injection moulding machines provide owners an advantage in comparison with the machines of simple equipment of Asian manufacturers, so-called "low specs" machines or low performance. An analysis of the costs of manufacturing of different injection moulded parts shown: are the costs of acquisition of a machine, but its availability, and performance determine efficiency.

Only raw material costs represent 90% of the costs of production of the packaging of rapid manufacturing, and in the case of more complex technical parts amount to 60%. The percentage of expenditure on machinery with regard to the totality of the costs of manufacturing is low for the vast majority of manufacturers of injection moulded parts. This percentage varies from 10% to pieces of packaging up a quarter, approximately, for demanding technical parts.

Why are the prices of machines under pressure?

When buying a machine of moldeo by injection prevails almost always the price of purchase. The studies about the process of decision in the purchase of machines of moldeo by injection consider that the price of purchase is one of the five more important criteria when deciding by a provider. The increasing sensitivity with regard to the prices by part of the transformers of moldeo by injection has like consequence that concedes a lot of importance to the price of acquisition in the study of profitability. At the same time, it loans less attention to other factors that have at least an equal incidence in the profitability of the manufacture. Therefore, also the transformers of those countries with a level of automation and requirements very high, e.g., with regard to the quality of surface of the piece to manufacture and to the proof of processes, interest of increasing form by machines with a low price of purchase and a quality that, sometimes, is considerably inferior to the level of the western machines.

Because of several tendencies and appearances, the prices of purchase of the machines of moldeo by injection have gone down along the years:

The increasing sensitivity with regard to the prices by part of the transformers of moldeo by injection that operate to world-wide level,
The concentration of the acquisition that realise the big transformers with a similar structure to a holding and, with this, the selective increase of the volume of determinate requests,
The inclusion of the departments of purchase in the process of decision of purchase,
The increasing use of the auctions realised through Internet and
The “adelgazamiento” of the machines with a minimum volume of equipment.

The status of competition in Europe

All the European manufacturers of injection moulding machines are facing this pressure on prices and have taken a series of measures to resist in a time where the volume of sales is stagnant in Europe. These measures include series of basic machines as "initial models", a series of configurable flexible form-based modules and machines the general waiver of any excess of engineering (engineering over).

Despite the efforts of the European manufacturers of machines address the trends mentioned above with new offerings, the trend towards the segmented and geared to the production purchase offers new possibilities to the so-called "low specs" machines. These are machines with low performance data ("low specifications") that are made by Asian manufacturers and are sold in Europe. Currently, Asian importers have reached in Europe by pieces sold a percentage of 5% of the market. Not yet commercial activities of this type have been detected in Germany. Manufacturer of machines "low specs" focus on the sale of new machines, without offering a comparable variety in terms of after-sales service, development of projects and equipment tailored to the client as the European manufacturers.

Table 1. Basic parameters for the cost-benefit analysis.

What effects are more favourable to the machines "low specs" parameters?

Analysis of the profitability and the influence of variables

The Demag Plastics Group has made costly series of evidence both with own client's machines, obtaining comparable castings production data to develop a comprehensive cost-benefit analysis. The study was based on factors affecting manufacturing costs and, therefore, in the profitability, i.e.

The acquisition of the machine (purchase price, technical data of the machine),
The operation of the machine (cost of servicing and maintenance, power consumption and cooling, availability, cycle time) and
The resale value of the used machine.

The following considerations are intended to show how the above variables affect cost models.

The purchase price of simple injection molding machines from Asian production is significantly lower than the European machines. With a force of similar closure and similar distances between stringers as main guidance criteria, the average Asian machines acquisition costs totalled only 60% of European technology.

An effect that positively affects the profitability of European machines was not taken into account: the automation. The assessment of the growing automation of injection moulding machines depends largely on the wage level of each country. Due to the large differences, he dispensed in these considerations of a quantification of this effect.

Technical data is contemplated, in particular, distances between stringers, relevant to the production. The corresponding values were used for the factors affecting the operation of the machine, empirical or those values which create a virtually ideal setting for "low specs" machines.

The results shown below are based on the conditions of manufacture of a central European country. The main parameters (excerpt, see table 1) are

The relationship between the clamping force and the distance between stringers,
The availability of the machine
Energy consumption
The consumption of coolant
The cycle time and
Maintenance costs

Of special interest, from the economic point of view, is the evolution of the residual value of injection moulding machines. To do this, the analysis uses price lists leading dealers of used machines that each month in detail reflect the residual value of machines. Despite the fact that the used machines of different European manufacturers get prices below or above the average in case of sale, broke an evolution of the average value for European machines. The evolution of the value of the machines "low specs" was defined by Chinese experts (Figure 1).

The analysis of the profitability was developed based on different parts - storage box, cover of camera, cord-grip - in terms of size of the molded part, the closing force required and the necessary performance of the machine in two scenarios. Based on the average values available for the factors of influence were determined conditions limit for a "real case" (realistic case) (table 2) and - in the best conditions for machines "low specs" - for a "optimistic case" (case optimistic).

The realistic assumption is based on an amortisation period of six years for "low specs" machines and ten years for European machines, as well as maintenance costs of 10% of the purchase price per year for machines "low specs" and 5 per cent per year for European machines, in addition to the loss of value of the two types of machines.

The optimistic assumption (from the point of view of Asian suppliers) is based on periods of amortization of equal duration of six years and particularly favourable maintenance costs of 8% of the purchase price per year for "low specs" machines andagain, of 5% per year for European machines, as well as the loss of value of the two types of machines. These assumptions are quite optimistic for each of the variables. In short they appear to be unrealistic, but they show the margins can reach Asian suppliers.

Calculation examples

Extensive evidence identified the costs of production for different pieces of moulding by injection, namely: keyboard computer, crankcase for trucks, box Stackable Storage, cover of mobile phone, camera, cord-grip, bearing, connector and plug casing. It is necessary to note that the costs of manufacture of the plastic parts manufactured in moulding machines by European injection, taking into account the loss in real value of machines,

• with periods of depreciation and realistic peacekeeping costs, i.e., in the "real case" are lower in an 8 to 38% in function of the molded part

• with equal periods of amortization and maintenance costs are very favorable for machines "low specs", i.e. in the "optimistic case" are lower than a 3% to 22% depending on the piece molded to the manufacturing of machines "low specs" costs (table 3).

Or the variation of the different parameters of Asian machines has a significant influence on the result. Even a substantial reduction in the time of cycle, a significant increase in the availability of the machine, a reduction in maintenance costs or a lengthening of the amortisation period do not change the result in the Fund (table 2). Only an appreciable simultaneous improvement of all operational parameters can improve the outcome of the machines of Asian origin. However, such improvements cannot be achieved with the technology of the machines "low specs" and, therefore, must be considered unrealistic.

This article was developed based on extensive tests and well-founded assessments. Depending on the location of the production and the molded part manufactured has to repeat the calculation, but this does not change a fact: the European technology of injection molding has its purchase price, but in the production process provides a clear economic advantage. A manufacturing oriented profitability cannot be confined simply to the reduction of the purchase price of a molding machine by injection, but it must control all the factors and determine their impact on the costs to later define the production environment more economically favourable to a piece in particular.

Summary

In the present analysis of the costs of manufacturing of different molded injection parts, the high availability of European machines and its increased performance compared to the "low specs" machines, have proven to be key success criteria. With regard to profitability, the purchase price of the machine plays a secondary role. The economic benefits are independent of each application and independent of the location of the factory.

Despite the little demonstrated influence of the purchase price on the profitability of the production of injection molding, the Demag Plastics Group faces pressure on prices in the acquisition of machines and the demand for cheaper offers as a manufacturer of machines. It contributes, on the one hand, the concept of platform with the decentralized manufacturing and high volume of standard machines with specific equipment and according to local needs. These machines are available in very short delivery times and offer a good relationship cost - performance. On the other hand, the modular system with flexibly configurable machinery technology, offers the right solution for the high demands of transformers. In addition, commercial and large geographical coverage after-sales service structures support customer in situ of a rapid and comprehensive.

Being a manufacturer of machines rooted in Europe and operating worldwide, the Demag Plastics Group wants to emphasise with this study on the cost efficiency of the technology of European machines for production in series.

Central European machines of manufactured injection according to the standards provide an economic advantage on the machines of simple equipment of Asian manufacturers, so-called "low spec" machines to transformers. The cost benefits are independent of specific applications or the site of production. In an analysis of the costs of manufacturing various molded injection parts, the increased availability of European machines and its higher performance have proven to be the decisive criteria that contribute to the success: accredited by studies, manufacturing costs are between 8 and 38% lower than the "low spec" machines. When we talk about profitability, the purchase price of the machine only has a secondary importance.