What is 'Tooling Digitalization': The Guide

Updated: Apr 28

Tooling (molds, dies, etc.) is the baseline of manufacturing, molding and shaping the products that serve as the face of product-based companies. These OEMs must ensure that their procurement activities will optimize outcomes and overall efficiency.

An increasing number of OEMs are utilizing tooling as part of their procurement process. As of 2018, the global tooling market has reached $200 billion, foreseeing an estimate of $368.5 billion in 2026.

Yet despite its promising growth, tooling continues to be managed in a way that is not in-line with advancements in technology.


Most manufacturing companies continue to manage data manually, subjecting themselves to higher probabilities of error, disruption, and overall inefficiency. When taking into consideration the extent to which companies invest in the tooling process, such disruptions can lead to critical results in supply chain management.




What is Tooling Digitalization?


As we speak, innovation marches upon all sectors of the manufacturing industry.


In the face of the so-called 'fourth industrial revolution', 'Industry 4.0', or 'industrial digitalization', major businesses are on the watch for new technologies and paradigms they could adopt to transform their practices.


Now, how does 'tooling digitalization' fit into all this?

'Tooling digitalization' is the process of integrating IoT sensors with molds, dies, and other types of tooling.

IoT sensors (or “mold counters”) are placed on molds, where they pick up relevant mold data and transmit them autonomously to dedicated software systems. With modern AI and machine learning, the systems can analyze this information and apply them to invaluable real-time analytics.


The end result is a streamlined, interconnected industry. Through digitalization, OEMs may better understand their manufacturing activities. They may exchange information, control actions, and operate facilities with a level of visibility that was previously impossible.





Why Should I Care?


Though the road to Industry 4.0 is still murky, the technology for it is now more or less available. We are on the cusp of sweeping industrial innovations.

Yet even in the midst of such development, 92% of manufacturing companies are using spreadsheets to manage data.

The relative obscurity of manufacturing data is a critical obstacle for OEMs. It is a root cause of inefficiencies for both OEMs and suppliers, incurring costs and obscuring overall visibility.


The digitalization of tooling allows OEMs to gain real-time tooling data, ensuring clear visibility and communication over the manufacturing process and supply chain. For firms, tooling digitalization boosts efficiency and enhances data accuracy, optimizing procurement practices.



How Does It Help?


By taking advantage of tooling digitalization, OEMs can optimize their practices in the following areas:



Tooling Digitalization for Different Industries


Tooling digitalization has a broad range of functions. These functions enhance the performance of companies in a number of industries. The following three categories are an overview on how companies can utilize tooling to their advantage:


  • Companies that invest heavily in tooling (Discrete Manufacturing):

- Automotive

- Aerospace & Defense

- Machine & Equipment


Molds are costly; even more so for companies within these industries. Reducing costs, therefore, would be the top priority in the procurement process. Tooling digitalization allows OEMs to scrutinize their molds, so that no spare parts go astray. They can also compare the performance of different suppliers, and negotiate costs to prevent them from hiking prices.


  • Companies that utilize their tooling asset frequently (Packaging):

- Cosmetics

- Consumer Goods

- Food & Beverage


Industries that sell accessible, everyday goods require consistent utilization of their tooling machines. This makes them highly sensitive to tooling malfunctions, where overuse may lead to disastrous results. Compared to the manual collection of data, automated processing enables OEMs to receive real-time operational data. By monitoring whether their tooling is adhering to optimal-use standards, companies can avoid disruptions in the supply chain.


  • Companies that are vulnerable to product quality:

- Pharmaceutical

- Electronics

- Medical Devices


For the aforementioned industries, the quality of products is the essence of their manufacturing process. Malfunctioning of one device, poor quality in one product may even permanently damage the reputation of a company. Digitalizing tooling enables OEMs to supervise overall performance and instantly react to or even predict problems. In doing so, companies can decrease scrap rates and achieve better utilization of their toolings.



Tooling Digitalization: Short- & Long-Term Benefits


  • Short-term benefits

The immediate benefit of tooling digitalization for OEMs is transparent information over tooling operations. Shot count, cycle time, temperature, pressure and tooling location all serve as the fundamentals for data analysis. Through such data, firms will be able to analyze the utilization rate, locate dispersed tooling, and maximize efficiency.



  • Long-term benefits

From a broader perspective, OEMs can reduce costs incurred from inefficiency (i.e: equipment malfunction, suboptimal supplier negotiation, etc.). By monitoring tooling performance and benchmarking suppliers and toolmakers, OEMs can invest in practices that guarantee higher returns and utilize their assets to their fullest potential. Ultimately, this will provide a comparative advantage over competitors in the industry.



Do I Need a Big Budget for Tooling Digitalization?


The straightforward answer would be no. The costs of digitalizing tooling devices account for approximately 1% of the total tooling cost.


The implementation process also does not require high costs; the counter and terminal only needs to be attached to the tooling. The low costs can easily be offset when utilization rates are improved.



Okay, Now What?


Now you have a general idea of what tooling digitalization is; but is there anyone who's done it before? What were the results?


Case Study: Samsung Electronics

Samsung Electronics was highly concerned with their lack of visibility on their tooling data. But by adopting tooling digitalization, they could transform the way they managed their in-house and external manufacturing. Read up on Samsung's success story here.

Schedule a meeting with us, and we can talk how to kick-start your own digital transformation.



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