🇺🇸United States

Unbilled or Underbilled Tooling, Repairs, and Engineering Time

6 verified sources

Definition

Tool-transfer guides emphasize extensive engineering work—pre-transfer assessment, documentation, cleaning, repairs, and process development—yet many molders bundle part of this effort into piece price or absorb it to secure the business, effectively giving away services.[2][3][8] Articles highlight that transfers are an opportunity to assess tool condition and maintenance needs, implying that prior suppliers often failed to transparently scope and charge for required refurbishment and preventive maintenance.[3][4]

Key Findings

  • Financial Impact: $1,000–$10,000 in unbilled engineering, sampling, and minor repairs per tool transfer; for shops transferring 20–50 tools annually, this can translate to $20,000–$250,000 per year in margin leakage
  • Frequency: Monthly (each transfer event typically involves unbilled or partially billed engineering and toolroom hours)
  • Root Cause: Lack of standardized, itemized billing for tool-transfer activities (design review, validation sampling, documentation creation, and minor refurbishment) and poor tracking of engineering/toolroom labor result in significant work being treated as overhead rather than billable project cost.[2][3][8] Ambiguous ownership of tooling and associated fixtures further discourages full cost recovery because suppliers fear disputes over what can be charged.[7]

Why This Matters

This pain point represents a significant opportunity for B2B solutions targeting Plastics Manufacturing.

Affected Stakeholders

CFO/Controller, Cost accountant, Program manager, Sales/account manager, Tooling manager, Engineering manager

Deep Analysis (Premium)

Financial Impact

$1,000–$10,000 per tool transfer in unbilled engineering and repairs • $1,000–$10,000 per tool transfer in unbilled engineering, sampling, and repairs • $1,500–$5,000 per tool transfer in unbilled technician labor (20–40 hours × $50–$150/hr); annualized for 20–50 transfers: $30K–$250K

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Current Workarounds

Engineering hours logged to overhead or general indirect cost pool, never charged to specific tool transfer; work instructions and control plans documented in shared Excel spreadsheets, Google Drive, or PDF files; no job costing linkage • Maintenance hours absorbed into shop labor pools or recorded in maintenance logbook but never formally cost-allocated; repair work orders not created or linked to tool transfer job; time tracked informally, reconciliation never occurs • Manual Excel pivot tables reconciling invoices to actual technician/engineer/maintenance hours; after-the-fact variance emails to Operations; historical gut-feel estimates of transfer costs; no real-time dashboard or automated flagging

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Methodology & Sources

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

Evidence Sources:

Related Business Risks

Unplanned Costs and Downtime from Poorly Managed Tool Transfers

$50,000–$250,000 per large tool transfer event (incremental inventory, re-qualification, expedited logistics, tool repair), equivalent to $4,000–$20,000 per month when amortized over annual transfer volume for mid‑size molders

Lost Production Capacity During Tool Transfer and Re-Qualification

$10,000–$100,000 per transfer in lost gross margin from idle press time and delayed shipments for high‑volume tools, depending on press rate and program size; for a plant doing 12–24 transfers per year this can equate to $120,000–$1.2M annually in opportunity cost

Scrap, Rework, and Warranty Risk After Inadequate Tool Transfer Validation

$5,000–$50,000 per tool in additional scrap, rework, and controlled shipments during the first 3–6 months post‑transfer for regulated or high‑precision programs; for a portfolio of dozens of transferred tools this can accumulate to low‑six‑figure annual quality costs

Delayed Customer Billing Due to Prolonged Tool Approval and PPAP/FAI Cycles

For a medium program generating $50,000–$150,000 per month in revenue, a 4–8 week delay in approval after tool transfer can defer $50,000–$300,000 of cash inflow; across multiple concurrent transfers this can tie up mid‑six‑figure working capital annually

Bad Sourcing and Asset Decisions from Limited Visibility into Tool Condition and Ownership

Misjudging tool condition or ownership can force premature rebuilds or emergency replacement costing $50,000–$250,000 per mold, plus associated downtime and expedited logistics; at a portfolio level, even 2–3 such missteps annually can create low- to mid‑six‑figure losses

Customer Frustration and Churn Risk from Tool Transfer Disruptions

Losing or downsizing a single major OEM program due partly to a failed or painful tool transfer can cost $500,000–$5M in lifetime margin; even without full churn, recurring expediting, penalty freight, and price concessions to appease customers can reach tens of thousands annually

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