Economics of Manufacturing Summary

Snap-A-Spike

Noah Berryman and Tyler Nolan

 Following the design of the spike design we began to look for manufacturing facilities to

create a 1:1 prototype of our design with the desired material. This was incredibly necessary as

the main concern in our design revolved around the desired material based on its flexural

modulus value. We quoted our projects to ProtoLabs and ICOMolding. We received quotes for

making our design out of computer numerical controlled aluminium and injection molded

plastic. We were informed by ProtoLabs that their CNC machinery was unable to make the

aluminum design but we were quoted by both companies on the price of an injection molding

project. The quotes we received greatly surpassed our budget for this class. This marked a dead

end for prototyping our design and our testing was over before it had even begun. Most of our

tests look into the materials and the physics of using the design at a 1:1 scale. Without a 1:1 scale

of our design with the desired material our testing would be meaningless.

Even though we are unable to test our design the manufacturing quotes we received are

quite revealing as to the economics of manufacturing our design. We can look at the quoted

prices of the creation of our design and make estimates as to the cost of producing our product in

the long run.

Based on the ICOMolding quote we received we can see that each part of our product

was quoted to cost about 32 cents per piece. Obviously ICOMolding has to make a profit so this

price is marked up. Additionally ICOMolding is not making our product in a massively large

quantity nor are they using machinery that is best suited for injection molding at this small of a

scale. It is safe to assume that in a scenario where a company had spent money to obtain

machines effective at injection molding a product at this scale in mass quantities their
manufacturing price per part would tend towards being negligible in the long run at about 1-2

cents per part. This is important to note as the current leader in track spike sales, Omni-Lite

Industries, is able to sell their spikes in large quantities for about 5 cents per spike. From this low

of a price we can assume that they are able to manufacture their product for about 1 cent per part.

Based on our market research we know that a majority of track spike users are willing to

spend 2-3 times more on a set of spikes to solve this issue. This means that in the long run the

production costs can be up to 2-3 times that of Omni-Lite to be competitive. Based on the quotes

we have received we have very good reason to believe that if made with the correct material and

dimensions our product will not only be functional but profitable in a business scenario.

It is also important to note that based on communications with ProtoLabs we are sure that

our design can be made out of aluminium or another metal using a CNC or other process;

however, the companies we contacted simply lacked the capabilities to manufacture a design of

this small of a scale. In a business scenario a machine able to manufacture the product would be

an extreme start up cost that would go on to be completely mitigated by sales profits in the long

run. Unfortunately since we were unable to obtain a quote on the price per part of a CNC process

we are unable to estimate the quantity of spikes that would need to be sold to mitigate startup

costs.