Tooling and mould ownership: how to protect the tools you pay for

Why tooling ownership causes disputes

Moulds, dies, jigs and fixtures are often the most valuable thing a buyer “owns” in a supplier’s factory, and the least documented. Disputes usually start when a buyer wants to move production: the supplier says the tool was never fully paid, or that the price included amortisation not yet recovered, or simply delays until the buyer gives up.

Nearly all of these disputes can be prevented with a short agreement, a clear payment structure and good records made at the start. This guide is general information, not legal advice; for high-value tooling, have a lawyer review your agreement.

Write it down before the tool is built

A tooling agreement, or a tooling section in your purchase order, should cover:

Many suppliers in India and China accept these terms readily, because they are standard with larger customers. A supplier who resists writing them down is telling you something.

Pay separately, in milestones

Paying for tooling separately from parts makes ownership clear and keeps the part price honest. Common milestone structures:

• 50/50: half with the order, half on approval of first-article (T1) samples.
• 40/30/30: 40% on order, 30% on T1 samples, 30% on final approval after corrections.

If you prefer to amortise tooling into the part price, agree in writing the quantity it is spread over, what happens to the price once that quantity is reached, and what you owe if you stop ordering early. Without that, the supplier can fairly argue it has not been paid.

What a tooling quote should contain

Tooling quotes vary wildly, and much of the variation is scope. Ask every toolmaker to state:

• Steel for cavity, core and inserts, with hardness, and the mould base standard.
• Number of cavities and whether it is a family mould.
• Runner system: cold runner or hot runner, and the hot-runner brand if used.
• Cooling and ejection design, and the expected cycle time it is designed for.
• Guaranteed shot life and what happens if the tool falls short.
• Surface finish or texture on each face.
• Design for manufacture review and mould-flow analysis, if included.
• Trial rounds included before T1, and the T1 sample quantity.
• Lead time to T1 and to final approval.
• Spare parts supplied with the tool.

With these on paper, two quotes that differ by 40% often turn out to describe two different tools.

Mark it, photograph it, register it

Ask for a metal nameplate on each tool stating “Property of [your company]”, with the tool number. Keep a register with:

• Tool number, part number, cavities and steel grade.
• Photos of the tool, nameplate and cavity side, taken at approval.
• Location (factory, city) and custodian.
• Shot count at each review and condition notes.
• Date of last maintenance and any repairs.

Review the register at least once a year, and ask the supplier to confirm the shot count and condition. A tool that has been “lost” is much harder to argue about when you hold photos and a signed register.

Shot life and maintenance

State the guaranteed shot life when you order the tool, along with the steel for cavity and core. A hardened-steel production mould and a soft aluminium prototype mould are different products at very different prices, and a quote that seems cheap may simply be the second kind.

Agree who pays for what:

• Routine maintenance (cleaning, lubrication, minor polishing): supplier, as user of the tool.
• Wear repairs beyond the guaranteed life: owner.
• Damage from misuse or poor maintenance: supplier.
• Replacement at end of life: owner, often with the supplier’s quotation compared against a should-cost. The should-cost calculator helps.

Worked example: one mould, two pricing choices

At the end of a programme

Tools outlive products. When a part is discontinued, decide what happens to its tooling rather than leaving it in a corner of the factory:

• Keep it in storage at the supplier, with an agreed storage period and a yearly condition check, if the part may return.
• Move it to your own premises or another supplier if you want control.
• Scrap it, with written authorisation from you and a scrap certificate with photos, so an old tool cannot quietly make parts for someone else.

Record the decision in the tool register. A tool that is neither used nor recorded is the one most likely to cause a dispute later.

Transferring a tool to another factory

Moving a tool, for a second source or a change of supplier, is a small project. Plan it:

1. Check the agreement and payments, and give written notice.
2. Run a last-shot sample before the tool leaves, and keep the parts as the reference.
3. Record the condition: photos, shot count, known repairs, spare inserts.
4. Crate, document and ship. Moulds are heavy and valuable; use proper crating, rust protection and correct export paperwork.
5. Trial and approve at the new factory. New machines, materials and settings mean a new first-article inspection and, usually, a new golden sample.

Budget time for the gap: the old factory stops when the tool leaves, and the new one cannot ship until it is approved. For high-volume parts, building a second tool is often better. See the China plus one guide and the second-source planner.