🇺🇸United States

Under-quoting and unbilled die/tooling costs in packaging jobs

2 verified sources

Definition

Shops routinely miss or understate die‑related costs (new dies, refurbishments, changeover time) in quotes because tooling data is not integrated, leading to jobs that appear profitable but erode margins in execution. Tooling charges are also sometimes not passed through to customers at all.

Key Findings

  • Financial Impact: $50,000–$250,000 per year in margin leakage for a mid‑size specialty packaging manufacturer, extrapolating from ERP providers’ warnings about underquoted jobs when tooling and inventory data are disconnected.
  • Frequency: Weekly
  • Root Cause: Estimating systems do not pull real‑time information on existing dies, refurbish history, or changeover labor; estimators rely on rules of thumb and may forget to include die amortization or one‑time tooling charges.

Why This Matters

This pain point represents a significant opportunity for B2B solutions targeting Packaging and Containers Manufacturing.

Affected Stakeholders

Estimating/quoting engineer, Sales/account managers, Finance/controller, Customer service representatives

Deep Analysis (Premium)

Financial Impact

$20,000–$60,000 per year in plate and setup costs for agricultural SKUs that are not recouped, especially from smaller or seasonal customers. • $25,000–$70,000 per year in under‑recovered plate costs and extra makeready for supposedly ‘repeat’ industrial jobs. • $25,000–$75,000 per year in hidden tooling surcharges, premium rush fees, and unbudgeted die refurbishments passed through late or absorbed by the converter to keep the account, which then get baked into higher run pricing or eroded margins on multi‑year supply agreements.

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Current Workarounds

Ad-hoc tracking of actual die/refurb costs via spreadsheets post-quote • Calls Inventory Manager for tooling status, estimates die costs from memory or last similar job, adds buffer markup to hide uncertainty • CSR does not have seasonal die reuse data; checks old order manually; cannot explain variance; customer escalates; manual investigation by Sales/Operations

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Methodology & Sources

Data collected via OSINT from regulatory filings, industry audits, and verified case studies.

Evidence Sources:

Related Business Risks

Duplicate die/tooling purchases from poor inventory visibility

$100,000 per year (documented in one precision manufacturer’s first-year savings after fixing the issue)

Lost press time from searching for missing dies and tools

$5,000–$20,000 per month per line in lost contribution margin for mid‑size plants, based on chronic changeover delays and downtime described by automated storage vendors and CMMS providers (time loss scaled by typical press hourly rates).

Excess tooling inventory and overstocked materials due to poor die/tool data

$50,000–$200,000 per year in avoidable carrying cost and write‑offs for mid‑size shops, inferred from ERP vendors’ emphasis on overstock waste and profitability impact for tool and die operations.

Scrap and rework from worn or poorly maintained dies

$10,000–$50,000 per month in scrap and rework for mid‑size operations relying on manual tracking, based on CMMS vendors reporting that proactive die maintenance reduces defects and downtime significantly.

Unplanned downtime from reactive die and tooling maintenance

$5,000–$30,000 per month per facility in lost output and overtime premiums for reactive maintenance, consistent with CMMS providers’ claims that proactive die maintenance reduces downtime costs significantly.

Delayed billing when die/tooling usage is not captured to jobs

$10,000–$40,000 in incremental working capital tied up at any time for a plant with high die‑intensive work, inferred from ERP vendors’ emphasis on linking tooling and work orders for faster, cleaner billing.

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