Procurement teams compare contract injection molding cost on piece price — then lose margin to scrap, air freight, engineering rework, and safety stock. Total cost of ownership (TCO) models the full program economics over 3–5 years.
TCO components beyond FOB piece price
| Cost bucket | What to model |
|---|---|
| Tooling | Deposit, amortization per part, modification cycles |
| Production | Piece price × volume, setup, regrind policy |
| Quality | Reject %, sort cost, warranty returns |
| Logistics | Sea vs air, duties, broker fees, DDP surcharges |
| Engineering | Your PM hours × fully loaded rate |
| Inventory | Longer lead times → higher safety stock carrying cost |
| Transition | Supplier switch or mold transfer if relationship fails |
Example: why 8% lower piece price can lose
Supplier A quotes $0.52/part with 4% reject at ramp. Supplier B quotes $0.56/part with 0.8% reject and included DFM. On 100,000 pieces/year, A’s scrap and sort can exceed B’s unit premium — before counting extra T1 loops A required.
Domestic vs China contract manufacturing
- Tooling — often 30–50% lower in China for comparable cavitation
- Unit cost — labor and overhead advantage at scale
- Lead time — add freight and holiday windows
- Communication — budget 10–20 hours per project for timezone and revision control
China wins TCO when engineering depth is verified — not when choosing lowest directory quote.
Build a one-page TCO spreadsheet
- Annual volume and growth scenario
- Tooling cost and expected life (shots / years)
- Piece price and reject rate assumptions
- Landed freight per shipment frequency
- Internal engineering and travel
- Compare NPV over program life — not year-one only
FAQ
Should tooling be amortized in piece price?
Commercial models vary — ensure apples-to-apples comparison across quotes.
How do tariffs affect TCO?
Include HS code duty in landed model; monitor policy changes on long programs.
When does air freight erase savings?
Launch delays and line-down often force air — model expedite scenarios explicitly.
Next step: Request Deuchi pricing with line-item breakdown for your RFQ package.