By Sean Fenske, Editor-in-Chief
 
Companies’ supply chains are garnering significant attention due in part to the multiple challenges that have occurred in recent years. From supply shortages to logistics nightmares to natural disasters, companies are encountering situations they may not have faced previously, causing them to reassess their sourcing situations.
 
One potential result of this analysis of supply chains is the need to move manufacturing from one supplier to another. This leads to the need for tooling transfer, which is yet another challenge with which many manufacturers are unfamiliar. Mistakes made in the tooling transfer process can lead to significant manufacturing delays or increased costs. As such, it’s critical to have a solid plan in place to ensure a smooth transition.
 
Fortunately, Jared Sunday—Director, Technical Solutions at Comar—participated in the following Q&A regarding tooling transfer within the medical device manufacturing space. He responds to several questions to provide companies with a potential outline for successfully conducting a tooling transfer among suppliers. Sunday addresses the most important considerations, often overlooked factors, when the process is required, and more.
 
Sean Fenske: When referring to the transfer of tooling, what specifically is involved?
 
Jared Sunday: The transfer of tooling more specifically involves the movement of customer- (or OEM-) owned assets used in the manufacture of components, sub-assemblies, or finished product from a current manufacturer to another strategic supply partner. This can involve physical mold assets, assembly equipment, gages, fixtures, or even manufacturing process knowledge.
 
Fenske: Why is this process so important when making a change with suppliers?
 
Sunday: The process provides the roadmap for an orderly transfer and revalidation of the mold to ensure a steady supply of product. Once assets are “turned off” and begin to move, there is no ability to produce product until revalidation is completed. This effort of revalidation should be a standard process led by your new supply partner. There can be many varied reasons why a tool transfer process should begin:
 

• Supplier Consolidation: Multiple tools can exist at multiple suppliers, resulting in a large, unwieldy supply chain.
• Dual Sourcing: Currently in a high-risk position due to critical product coming only from a single supply source. Transferring tooling will reduce overall risk to supply, promote cost competitiveness, and lead to a potential surge of new technologies.
• Problems with Current Supplier: These issues can be as simple as increasing production costs. Potentially, the supplier is no longer aligned strategically due to a change in location, core competency shift, a change in management focus, stagnant investment in new technologies, lack of quality service or quality system, lead time changes, or non-responsiveness to change requests. There is also the potential that a change in ownership impacts the overall business relationship or creates conflict.

 
This process is part of focused strategic supply chain management. It can be used to consolidate suppliers, reduce supplier management costs, and lead to a smaller supply chain that is aligned based on core technology competencies or location. Direct cost savings can be achieved by leveraging higher production demand for lower manufacturing rates, consolidation of shipping and transit costs, and improvements in quality. Higher raw material purchase quantities can lower raw material costs. Supplier consolidation also leads to increased supplier responsiveness and customer service, with a lower number of critical core suppliers as opposed to dilution of focus by spreading business over a large number of suppliers. Overall, the risk to consistency of supply is reduced.
 
If you currently have only one supplier, a dual-sourcing strategy can be used to ensure competitive pricing and reduce the risk if one supplier is unable to produce due to capacity issues, weather-related issues, resource limitations, or financial difficulties.
 
Fenske: Is tooling ownership something that needs to be addressed in the initial contract? Can a current supplier refuse to transfer tooling in their possession?
 
Sunday: Tooling and asset ownership should be clear as part of the initial contract when the manufacturing process and end product are developed and launched into production. Comar recommends revisiting the initial quotations, purchase orders, and contracts that would typically show a complete list of specific asset ownership. It is within the rights of the asset owners to move those manufacturing assets to another supplier unless specifically prevented or limited within the bounds of an existing master supply or quality agreement.
 
Typically, suppliers want to ensure all open invoices are paid and the customer has met all financial obligations before they release a tool in their possession.
 
Fenske: What are the most important considerations for a company seeking to transfer tooling from one supplier to another?
 
Sunday: There is a long list of considerations that must be kept in mind. Some of the more important ones are:
 

• Build a robust process-based plan with key stage gates and process steps.
• Have a pre-approved “Plan-B” if validation fails.
• Expedite an aggressive quality plan including revalidation requirements.
• Agree on a pre-transfer checklist. These are not all critical, but the more information that is available at the start of the process, the higher the chances of a successful, efficient, and effective transfer.
  • 2D-part prints and 3D-solid models of parts, molds, and equipment
  • Sample components with runner; three to ten complete shots
  • Individual part weight and overall runner weight
  • Runner system type, manufacturer, and connection method
  • Coolant system and ancillary connections
  • Process settings and cycle times
  • Quality history
  • Condition report of tooling, spares, and equipment
  • Overall owned asset list including metrology fixtures/gauges, end-of-arm tooling, hot runner controllers, secondary equipment, etc.
  • Packaging, labeling, certification of compliance/analysis, and packing slip requirements with ship-to location
  • Automation or value-added requirements
  • In-process lot inspection requirements
  • Metrology equipment needs and designs
  • Raw material or finished goods minimum inventory requirements
  • Batch or lot number requirements
  • Minimum order quantities, forecast requirements, firm/flexible order timing
• Retain approved last-shot samples.
• Have a project team with an approved budget in place.
• Monitor the status of daily safety stocks, inventories, and sampling execution.
• Empower the project manager with the tools and resources to be successful.
• Suppliers with proven track records of transfer success, such as Comar, are able to utilize state-of-the-art tools, such as CT scanning, to help prove equivalent components are being produced. This technology is able to easily and quickly identify misalignments in produced components compared to print or solid model requirements prior to transfer.
• Provide as much information as possible regarding the tool (e.g., tool dimensions, knock-out pattern, check-ring size, shot size, secondary equipment, etc.) to ensure potential new vendors have a molding machine capable of handling the mold.

 
Fenske: Are you able to transfer tooling when seeking to expand suppliers such as for the purpose of dual sourcing or manufacturing in a new region or must new tooling be fabricated?
 
Sunday: Yes. Dual sourcing for risk reduction is often a sound strategy. If currently available assets are in good working order and able to manufacture in a robust manner, they are able to be transferred once proper engineering assessments have been completed to ensure appropriate equipment, floor space, and any required ancillary equipment are available.
 
Fenske: What mistakes have you seen involving the transfer of tooling? What should companies avoid?
 
Sunday: Just as there’s a long list of considerations to keep in mind, there are many challenges that can create issues. There are a number of things to avoid.
 

• Do not sacrifice or reinvent a quality standard due to urgency.
• Do not build large inventories to compensate for a poor-quality transfer plan.
• Do not forget that upfront project work is critical to long-term success.
• Immediately escalate and address open action items. Once assets are shut down at the current supplier, the clock is ticking. Delays in decision-making or feedback are not to be tolerated.
• Do not ignore current stock levels on a frequent basis. These amounts are key to day-to-day priorities and decisions. Changing priorities based on available information should be encouraged.
• Do not ignore out-of-specification items or misalignments in quality expectations based on the upfront project work, specifically the delivered sample components.
• Do not expect the new supplier to process around tooling that is not in robust condition. Quality cannot be inspected into a product.

Most importantly, do not delay! Keep action items visible, communicate frequently, and make decisions based on the transfer plan.
 
Fenske: Do you have any additional comments you’d like to share based on any of the topics we discussed or something you’d like to tell medical device manufacturers?
 
Sunday: Transfer of tooling and manufacturing equipment is a task that is key to a strategic supply management source. This happens often in our industry with success. OEMs can lean on the expertise of a supply partner that is involved early in the process. Transparency and open communication are important items that should not be overlooked. Do not minimize the work that can be accomplished upfront before beginning the transfer process. This lays the foundation for a successful, low-risk transfer. A supplier with a proven track record of transfer success can be leaned on to lead and manage all aspects of the process from start to finish.
 
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