This article will discover essential steps that every thermoforming project should perform before they finalize their choice of thermoforming machine. Once you have clarified the information on the product, check your competitors and suppliers. 

Peter is a project manager, and his company is a paper cup producer. They were buying thermoformed lids before; now, they want to start their production. We have clarified machine and tool parameters (link article 1) and product analysis (link 2). 

Competitors analysis. 

Usually, competitors’ study starts with the product range – but in Peter’s case, the product is the coffee lid, and he knows all of his products, so we skip this step. 

The second step is to clarify added value chain that Peter’s competitors are using. 

• They can resell the products;
• They can run thermoforming with a purchased sheet and sell their scrap;
• They can run extrusion and thermoforming using their waste, buying virgin or recycled material. 

The longer is added value chain, the more margin you make. If Peter wants to get an advantage, he must create a longer chain. Also, Peter has managed to find out more or less precise information about his competitors’ equipment, which we will discuss in this article later. 

Peter finds connections with competitors ‘ pricing and market shares once the added value chain and information about competitors’ equipment are analyzed. 

Going without extrusion would increase costs. Higher costs bring higher pricing and lower market share, or Peter has to compensate for the cost of the lid with the margin of the cup, which makes the project senseless. On the other hand, extrusion complicates everything and increases investments. In upcoming articles, we will discuss the role of extrusion in thermoforming packaging production. Now we see how vital competitors’ analysis is. Peter’s project might be delayed, but Peter has an opportunity to make things most efficient and safe. 

Suppliers analysis. 

Now it is time to discuss suppliers’ analysis. Like in every project, Peter plans to choose one from a list he made. Peter doesn’t plan to study all possible suppliers; he made his shortlist of 5 companies from different countries with different prices and solutions. 

We have clarified the parameters, and now the only thing we have to compare is pricing. But price means nothing in thermoforming except being able to pay or not, and Peter’s essential is how much each option earns and how fast it pays back. But if Peter starts focusing economy now, he might skip another crucial aspect. The problem is that here we have two groups of parameters. If the machine and economy parameters are measurable,  know-hows (or key technologies), ecosystem, and supplier’s experience are hard to measure and almost impossible to estimate.  

We will start with the parameters from the right side:

Suppliers’ know-hows

Any solution that allows you to decrease waste or increase your output will enable you to earn more than competitors. 

If Technology is good, users don’t share this info with suppliers. But they get an advantage, and the market notices that. Sooner or later, every know-how that gives real benefits becomes a standard for the industry, but the most significant profit is gathered by pioneers who started first. 

We meet a system conflict: we need to decrease uncertainty and risks by using proven solutions. On the other hand, to get an edge over competitors, we have to risk and become pioneers of new technology. 

How to solve the conflict and keep the balance when choosing your equipment? There is no simple answer to this question; any case is unique, but the general advice is to remember that being a pioneer costs a lot. The research phase for a solution never implemented before requires time and money. It requires even more time and money to bring the product to the market. And if this is your first project in the thermoforming industry, you have to do it in parallel with the process setup. 

Supplier’s eco-system

If a company has supplied more than 50 machines to your market, there is enough space for additional infrastructure such as technical support, spare parts warehouse, etc. Think of situations when:

• You have a time difference with your supplier that narrows the window for communication up to 2-3 hours per day. 
• The language barrier is not a problem when CEOs communicate in English, but it might change when your operator and supplier technician don’t speak the same language.
• Spareparts shipped in 24 hours are stuck at customs for weeks, and you have to spend days on communication and paperwork. 

Those are just a few examples of situations that give you an idea of how much money you can save with the presence of a supplier in your region. 

Supplier’s experience

A complicated multisystem cannot be perfect with the first iteration. Evolution tells us that it is a feedback reaction to the external environment. You need lots of time and testing to make a robust and reliable thermoformer, which is impossible to follow up in a workshop. This evolution story is a long-term story, and the more thermoformers suppliers have built, the more reliable the machines are.

Suppose the first supplier has built 30-50 machines in 5-10 years and is ready to show machines running in different countries. The second supplier has made these machines for 2-3 years and has few references. 

If you are new to thermoforming, you have to set up the production and study the production technology, so adding problem-solving with “raw” equipment is not what you need. 

As you can see now, these three factors might be critical. At the same time, it is tough to calculate how they affect your financial model, and it is much easier to start with those factors and exclude the equipment that might bring problems before comparing machines’ parameters and prices. 

Equipment parameters and prices. 

Finding a machine that suits your needs is not easy at all. The parameters you can check on the web do not answer your questions. In our first article, you can find basic information on the parameters and how they affect [link to the article “quest for the thermoforming comparison], but remember that those are just the basics. As for machine prices, check the article [the ultimate indicator that any thermoforming production needs]. It reveals the concept of throughput margin indicator that allows making an economic comparison that gives you much more than prices.