The situation
You have been getting molded plastic products made in China, in this case, a type of water bottle.
Your business relationship with your Chinese supplier needs to come to an end; you have found a supplier in Taiwan and you want to switch production over to them.
You already have your own molds (tooling) which are on-site with your Chinese supplier right now and you need to find a way to get them to Taiwan in good condition and make sure that the new supplier can use them and start production as seamlessly as possible.
The risks
There are a number of risks here:
- A Chinese supplier who knows the relationship is coming to an end is likely to be uncooperative. As they know they’re losing your revenue, they may even hold your tooling and demand payment to release it (or claim that they own it). This also goes for any stock they may have in storage at their facility right now.
- An angry Chinese supplier may decide to use your mold to start producing your product and selling it to competitors or in direct competition with your own products.
- If your Chinese supplier has been storing your molds between productions can you be sure that they have been kept safe and in optimal conditions? It may be that they’ve been stored in too humid an environment leading to rust and they haven’t been maintained properly. Or they aren’t packed properly which can easily lead to damage.
- Your new supplier isn’t able to use your tooling properly and manufacture products with it at your required level of quality. Usually, they will be on their own to find a way to make the tooling work on their presses with minimal defects as your former supplier won’t help.
- Once it is installed and checked in Taiwan, if the mold is found to have defects or needs to be adjusted, the fabrication shop in China will be able to adjust it, but only if it is sent back to China. On top of the shipping, those adjustments won’t be cheap.
What needs to happen
The good news is that it is possible to transfer plastic injection mold tooling from the Chinese Mainland to Taiwan, but it’s a delicate situation. Let’s address each issue in turn.
Dealing with your current supplier
Does your current supplier know you’re ending the relationship and what type of development and/or manufacturing agreement have you signed with them?
If you have signed a tooling development or manufacturing agreement that is enforceable in China and clearly states that you have full ownership of your mold, this is a positive step as it makes it hard for the manufacturer to withhold it even if they feel aggrieved at the end of the relationship. This also applies to your product IP. If your supplier has signed an NNN agreement with you, they really don’t have the right to use your tooling to produce your product without authorization.
On the other hand, if they don’t already know and you do not have a clear agreement it’s probably better not to inform them about your plans to switch to a new supplier. Instead, you can request to store the tooling yourself between productions. If you do this as standard, they will not feel you sending in a truck to pull your tooling is unusual and then you’re able to pull the plug and start the process of sending your tooling to Taiwan without the worry that it may be withheld from you.
Related 👉 We can help remove and store your tooling safely and do this in our own Chinese facility. At the same time, the tooling is thoroughly checked for issues and you’ll be informed about its condition.
Assuring your Taiwanese supplier is capable of producing products as required using the tooling
We can do a factory audit in Taiwan which will focus on the quality system, and the auditor can make videos of course if the client asks. The price depends on the factory city.
The problem is, it’s not really a matter of “audit and make sure our molds would be compatible.” The audit can help confirm the new supplier has good systems in place, but not much more. What we suggest doing before pulling the molds from your current supplier is:
- Get ALL possible information about the molds (Sofeast can send an engineer to do a teardown of the molds, comment on maintenance and other possible issues, take photos…) and, if possible, about the process setup at the current factory (what model of machine they use, what cycle time, what temperature, what pressure, how many shots are needed until good parts come out…) provided they are still running some production.
- Provide this comprehensive information to your Taiwanese supplier and ask them to confirm if all seems all right for processing on their equipment.
- Once confirmed, then pull the molds out of the current factory and ship them to the new factory.
Related 👉 Read this detailed post about Tooling Management for Plastic Injection Molds in China including information about what to do after production and moving the molds to a new supplier.
Conclusion
Switching suppliers is always a risky time and since molds are an important and costly investment the risks are higher if your former supplier in China catches wind of you ditching them for a new supplier and decides to play hardball by refusing to give them up.
Pulling the molds from their facility is goal one, but before doing so it will really help your new supplier to have detailed information about the molds and process setup currently in use, otherwise, they’re going to have unfamiliar molds arriving at their factory that they have to start testing and working with from scratch with no prior idea of how they’re used effectively. This will cost you time and, if the new supplier finds out that the molds need to be adjusted to fit their processes after they’ve arrived, extra expense.
Dissatisfied with your manufacturer? Read this eBook and get one step closer to a solution
You don’t need to put up with quality problems, unauthorized subcontracting, shoddy treatment of your IP, late deliveries, unexpected and unwelcome price rises, and more, which are all red flags that your manufacturer isn’t reaching your standard.
Fabien and Renaud (Agilian/Sofeast CEOs) have decades in dealing with Chinese suppliers and manufacturing in China for various customers, and this eBook shares their insight and experience with you by explaining why you will benefit from switching and how to make the transition smoothly.
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