Part 1: Impacts on the organization of companies
Whether they are located in their owners’ factories or with suppliers, molds have their own life cycle.
From their manufacture to their destruction, through their renovation/maintenance and their physical & accounting follow-up, industrial molds must be controlled throughout their life cycle.
The assesment of industrial molds is often complex to implement because it concerns several departments, whose interests may overlap:
- Finance & controlling
- Suppliers; obviously, suppliers are not counted as a company department, but they are involved in the industrial mold management process and play an essential role, as we shall see later
The list of departments concerned by the assesment of industrial moulds is not exhaustive (but quite complete anyway!).
Depending on the group’s organization and sector of activity, other departments may be affected, such as packaging, IT services or risk management. We can add the mold makers who are systematically involved in the manufacture and renovation of industrial moulds.
This series of 3 articles on industrial molds is structured around 3 themes which will be developed separately:
- The impact on the organization of the different departments of the company
- The stages in the life cycle of industrial molds and tools
- The solution
1. What are the impacts of the life of an industrial mold on the company’s organization
The life cycle of industrial molds impacts several departments in the company.
The actors involved in the life of an industrial mold do so under the prism of the obligations and functions specific to their departments; they most often have a compartmental view of the issues involved in the global assesment of industrial molds, hence the need to adopt a global vision of the subject.
Ideally, molds & industrial tools, especially if they are held by suppliers should be dealt with at group level.
You will find below the main actors concerned and involved on a day-to-day basis in the assesment of industrial molds.
1. The purchasing department
In theory, when an industrial mold is put into service, the purchasing department must formalize the operation by issuing a document.
If the industrial mold is entrusted to a supplier, it is strongly advised to issue a certificate of ownership (other terms can be used to designate such a document, such as loan contract, etc.) linking the owner of the tool to his supplier.
The purpose of this certificate of ownership of industrial molds is threefold:
- To legally secure the ownership of the industrial mold held by the supplier; the signed contract will be the proof in case of doubt (for example in the case of events such as transfer, liquidation or others).
- To make the supplier responsible for the quantity of parts that he undertakes to produce with the industrial mold in his possession; this quantity will be mentioned on the certificate of ownership signed and will commit the supplier
- To limit the risk of counterfeiting by comparing the number of guaranteed parts with the number of parts actually produced
Purchasing is involved in all relations with suppliers, particularly when renovating or replacing molds with mold makers.
2. Finance & Controlling
Financiers & controllers are also concerned by the assesment of industrial molds in two ways:
- To forecast and validate the budgets for the acquisition and renovation/maintenance of industrial molds, in collaboration with the purchasing department and the suppliers/moldmakers
- To ensure rigorous analytical accounting, including of course industrial molds (“in situ” or relocated) in conjunction with the company’s accounting and technical departments
3. The accounting department
In principle, industrial molds are fixed assets and as such the accounting departments must ensure that they follow the company’s rules in terms of recording and monitoring accounts.
This is true for industrial molds “in situ” but also and above all for industrial molds held by suppliers, where traceability can be more complex.
Usually the objectives of the accounting department concerning the industrial molds belonging to the company are as follows:
- Record the industrial mold in the assets file when it is put into service according to the rules in force in the group
– If the industrial mold is located in the company’s factory, the recording will follow the same rules as for other assets
– If the industrial mold is outsourced to a supplier, the certificate of owner for its provision can be used as the basis for the accounting entry
- Follow the industrial mold throughout its life in order to trace any changes that may occur (transfers, renovation, destruction) and record them in the accounts
4. Suppliers & Moldmakers
When companies decide to subcontract part of their production to their suppliers, they make available to the latter the industrial molds that are essential for the manufacture of the parts.
The industrial molds held by the suppliers are the property of the companies and therefore constitute assets.
Although they are not part of the company’s departments strictly speaking, suppliers are the cornerstone of the assesment of offshored molds.
- When manufacturing the molds held by the suppliers, the latter place orders with the moldmakers on the basis of the specifications provided by the client; the molds are delivered directly to the suppliers
- When refurbishing supplier held molds, the moldmakers carry out the repair work under the supervision of the supplier
- For the manufacture and renovation of the molds located in the customer’s factory, only the moldmakers are involved in collaboration with the company’s technical services