Plastics Market Expertise
Plastics Fabricators are generally the tier 1 or tier 2 suppliers of OEM/solution providers. They can also be found as tier 3 suppliers in more complex industries such as the aerospace & defense industry, providing plastic components and/or sub-assemblies to be included in final assemblies. Plastics Fabrication is also one of few spend categories where the pricing structure includes a product unit cost AND a tooling cost. For example, injection molded/vacuum formed/thermoformed parts will be quoted with a product unit cost, and a mold cost. The mold is unique to each part’s design, therefore suppliers quote in accordance with the part’s design complexity.
Plastics Fabrication Strategic Sourcing goes beyond requesting quotes for parts and includes negotiating tool ownership and tool maintenance policies, and all these factors contribute to potentially higher plastics fabrication costs. Companies struggle with Plastics Fabrication Strategic Sourcing in two key ways:
- Plastics Fabrication Sourcing Strategy and Resources – Establishing the right plastics sourcing strategy, approaching the right markets, and ultimately selecting the right plastics fabrication suppliers are challenging tasks that require resources, time, market knowledge and expertise that companies may not have available on hand.
- Plastics Fabrication Supplier Identification, Vetting and Selection – As plastic resins cost is closely tied to the market index fluctuations, there is not a lot of leverage for negotiations on raw material cost. Therefore, sourcing within the plastics fabrication space requires identifying low-cost labor suppliers with top of the line manufacturing technologies. Identifying plastics fabrication suppliers that fit this description, vetting them properly and making sure they are reliable (in terms of quality, capability to take on new business, and production capacity) in the long term is a particularly challenging task.