Die Science: Die costing and estimating

One of the common complaints I hear from stampers is that tooling cost estimates differ significantly when they are requesting quotes. One would think that if every shop were quoting to the same die design standards, the tooling cost would be similar from each shop quoting, but that’s not the case. I’ve seen the cost difference between shops be more than 50 percent. How is this possible, and how can it be fixed?

Nine Factors Affecting Tooling Cost

1. Tooling Type. The annual volume of parts needed, along with press and feeder capacity, often determines the type of die needed. Progressive dies usually cost more to process and build than single-stage or hand-fed line dies. However, progressive dies yield a much higher production rate than conventional single-stage tools. Like progressive dies, transfer dies also are more expensive than single-station tools used for low production. Dies used for deep drawing also are more expensive than conventional solid-form dies.

2. Part Geometry/Complexity/Tolerancing. Difficult parts requiring extensive prototyping or forming simulation will have a higher tooling cost. A simple washer without a critical flatness characteristic is simple to process and build, but a washer with a critical flatness characteristic may require a special type of die or even special equipment, such as a fineblanking press. Deep-drawn parts also tend to drive up tooling cost, especially those that require several reductions or redraws, or those with a lot of deep contours. Tight-tolerance parts also increase tooling cost.

3. Part Material. Parts made of specialty materials, such as titanium, aluminum, niobium, and magnesium, also tend to increase tooling cost, because higher grades of tool steel and carbide often are needed to manufacture the dies. Dies making parts made of high-strength steel also tend to require more costly tooling.

4. Vendor Diemaking Niche. Stampers should find a shop that specializes in the type of part and material it needs. Diemaking vendors with multimillion-dollar mills that machine door dies are not going to be competitive on estimates for making small bracket dies that could be made on a small mill.

5. Vendor Location. Labor rates for diemakers, designers, and process engineers vary by geographic location, and so do tooling costs. For example, it usually costs more to build a tool in California than in Wisconsin because the cost of living is higher in California. Designing and building dies is labor-intensive, and labor cost is a large factor.

6. Vendor History. If the tooling vendor has produced dies for a stamper in the past and has made dies to produce similar parts, chances are the vendor will base the quote on the history of the job. If the vendor made a reasonable profit, chances are the stamper will get a similar quote.

7. Vendor Workload/Capacity. If the tooling vendor is loaded to capacity and working overtime, the tooling cost likely will be higher, especially if the tooling must be built during a busy time. However, if business is slow and the shop needs the work, the estimate may be more competitive.

8. Vendor Payment Terms. Customers that pay their invoices promptly are more likely to get a lower quote than those who don’t. This is especially true for expensive tooling projects. For example, if a die-build shop borrows $1 million to build a set of outer door dies, and the customer is three months late in making payment, the die shop must pay interest on the borrowed money for three additional months. For costly projects, progress payments are preferred.

9. Vendor Capabilities. Some shops have more experienced toolmakers, designers, and process engineers than others. Certain jobs may be quoted high because the die-build shop lost a lot of money on a similar job. This loss, which often can be traced back to a poor process or poor tool-making techniques, results in a tendency to quote similar dies significantly higher.

Getting Apples-to-Apples Quotes

So how can this problem of wide variance among quotes be prevented? One main way is for the stamper to determine how it will make the part before sending out requests for quotes (RFQs). The stamper might need to have a tooling expert on-site who knows how to design and build a quality process and die.

The process used to make the part is a very large factor that contributes to tool cost. More often than not, a stamping company will send out a part print to a die shop and leave it up to the shop to determine the process and number of steps needed to make the part.

And that’s when opinions about processing methods diverge. One shop might quote a 10-station progressive die with a 5-in. pitch, while another shop might quote a 15-station die with a 5.250-in. pitch. This difference in processing method will most likely result in a significant difference in the quoted costs.

Even with these efforts, a few shops will always quote very high or very low. Unfortunately, it’s the nature of the die-building trade.