Pulling Your Tooling from Chinese Manufacturers: Key Risks and Best Practices

When it comes to switching from one Chinese manufacturer to another, one of the trickiest aspects is transferring tooling—whether it’s plastic molds, die casting tools, or others—from the old supplier to the new. While it may seem straightforward, the process of pulling out your tooling comes with acute risks that businesses often overlook. Let’s explore the key risks and best practices to follow when pulling tooling from Chinese manufacturers.

This blog post draws on the discussion in this video:

1. Understanding When to Pull Tooling

In some cases, the decision to switch manufacturers doesn’t mean you need to abandon everything with the old supplier. As discussed:

“You may be in a situation where you want to change the assembly part of it or everything else, but the plastic molding supply stays the same because they are actually doing a good job.”

If the plastic molding element of your cooperation is performing well, but the assembly or final product quality is lacking, you may only need to transfer part of the manufacturing process. This distinction can save time, cost, and effort. This approach also means that it’s perhaps less likely to lead to the old manufacturer misbehaving because they’re losing all of your business and feeling sore about it.

2. The Risk of Not Having Contracts with Tooling Suppliers

One significant challenge lies in ownership and contracts. Many businesses assume their agreements with manufacturers will protect them, but that’s not always the case:

“In many cases, manufacturers or trading companies don’t have a contract with the tooling and plastic factory they outsource to… If that factory doesn’t want to return the tools, even if you the customer have a contract with the manufacturer, you basically end up in a sticky situation.”

If you or the manufacturer do not have a formal agreement with their tooling and plastics supplier, retrieving your tools at the end of a project can become complicated, often requiring legal action in China. This risk emphasizes the importance of ensuring clear contractual agreements that are enforceable in China with every relevant supplier.

3. The Validation Process: Don’t Assume Tooling Will Work

Even when tooling is successfully transferred to a new manufacturer, businesses cannot assume everything will run smoothly. The tools need to be tested and validated even if they were fine in the old supplier’s facility:

“There’s a very, very important step that needs to be taken. You can’t just take it for granted that if you’re taking tooling from one supplier and putting it into another, and that everything’s going to work straight away.”

Transferring tooling requires a systematic verification process to ensure the tools are functional and meet quality standards. Failure to do this can lead to production delays, costly rework, and inventory management issues.

4. Poor Tooling Design and Yield Risks

A major risk when transferring tooling is discovering that the existing tools are poorly designed or deteriorating. This may be unknown to you until your new supplier flags the issue.

“We had cases that the yield of the production is like 50%, which is definitely unacceptable… The tool has not been designed properly.”

Low yield rates mean a lot of parts are not acceptable and have to be reworked or (more typically) scrapped. That causes significant financial and operational challenges. For example:

• A yield of 50% means producing double the quantity to meet quality targets.
• Poor yields can lead to erratic production timelines: “Instead of being three weeks, for example, it will be six weeks or seven weeks… That might screw up the whole assembly process.”

These delays disrupt lead times, assembly schedules, and inventory management, creating cascading issues across the supply chain. Unfortunately, if your tooling is found to be poorly designed it may need to be refabricated properly.

5. Assess and Repair Tools After Transfer

In some cases, tools may require reworking to meet quality standards. Here’s an example:

“For the MacBook accessories that we [were making], we had to rework the tool to fit our quality standard… The tool was designed more for cheap production, and the performance was degrading very, very fast.”

Upon receiving transferred tooling, businesses must assess its condition and performance (so be mindful that your new supplier is doing so and reporting results back to you):

1. Test the Tools: Verify production output and identify any issues.
2. Repair or Rework: Address design flaws or degradation to ensure the tools meet production standards.
3. Prepare for Worst-Case Scenarios: In extreme cases, businesses may need to invest in new tooling.

Next Step…Plan Ahead and Test Everything

Transferring tooling from one manufacturer to another isn’t without its risks. Best practices you should follow include ensuring clear agreements are in place, verifying tooling performance, and preparing for potential rework.

“You need to understand, if you are going to transfer your tooling, never take it for granted or assume that the tooling will just be able to pick up and run it.”

By carefully planning and thoroughly testing the tools, you should be able to minimize disruption, maintain quality, and avoid costly surprises.

You may also like to read these related resources…

• Injection Mold Tooling Suppliers: Avoid “Quick and Cheap”
• We can help check your tooling before it’s shipped to your supplier: Mold Capability Validation Supervision (in China)
•  In order to prevent your supplier from holding all of the cards, we provide a tooling custody and management solution where we pick or receive your tooling and store it safely and securely at our Dongguan facility, returning it to your supplier only when needed once more.
• Plastic Injection Molding Questions: 17 FAQs Businesses Need Answers To