Can you justify the simulation investment? Ask Sivyer Steel.

Once cautious about the computer solidification investment, this large steel foundry now shares its experience with the technology.

In the foundry industry's current climate where any type of capital investment is so carefully scrutinized, the question marks likely abound about exactly what economic impact solidification software will have on your operation.

Because hard justifying data didn't exist for this relatively new technology, Sivyer Steel (a 320-employee, shell, nobake and green sand foundry that ships $33 million per year in a variety of steels) passed on this project several years ago, yet chose to acquire it several months later. Now with experience and a record of use and cost savings, we hope this article helps foundries out there contemplating the implementation of this technology.

No Data Available

In the summer of 1992, after having researched the state-of-the-art of casting process simulation technology, Sivyer was considering the acquisition of such software. At first glance, it was difficult for us to justify the cost of acquiring such a system. Hard data on what changes simulation would make in the methoding of Sivyer's castings didn't exist and, more importantly, the cost savings these changes could bring to the foundry weren't known. Without hard cost savings data, investment in simulation was put on hold indefinitely.

That same summer, we took orders for two large castings with complex geometries, unlike anything we had ever produced. Without historical information on a method for these types of castings, we applied "best guesses" and poured castings. The results were far from successful. What followed was a long process of scrap, rework and, ultimately, late deliveries.

When the orders were finally completed, we questioned our desire to push into markets needing castings of this type of complexity. Interestingly, we also realized that the money lost (including profit not realized) would have been enough to purchase a high-end simulation system outright.

The solidification software was then reevaluated with this outlook: if Sivyer Steel was to expand into new casting markets, it was imperative that it have a tool that would provide up-front information on new products before samples of questionable quality were poured.

In addition, we expected such a tool would also assist us in optimizing current jobs. With recent experiences fresh in our minds, we decided to proceed with simulation, despite the lack of a forecast of future cost savings. In November 1992, Sivyer Steel acquired MagmaSoft (a finite difference method system) and a Silicon Graphics workstation. We expected that if this tool could predict internal defects accurately, the total cost benefit would provide a favorable return on investment.

At present, Sivyer Steel has been using the solidification software for more than three years. In retrospect, simulation has done more for us than we had first hoped, both in terms of operational benefits and as a sales and marketing tool.

Operational Benefits

The operational benefits of using our solidification modeling package have been mainly in the reduction of scrap and rework, and the reduction of total manufacturing costs. In the areas of scrap and rework, simulation has helped Sivyer Steel eliminate 90% of sample rejections due to shrinkage--related defects. The remaining rejections--mostly castings that for various reasons weren't simulated--are usually of relatively good quality and are easily repairable.

The optimization of total manufacturing costs has included the costs related to improving yields. Yet while we have experienced an improvement in yield, we believe that because the cost of molten metal isn't a foundry's only expense, and focusing solely on yield is, for our purposes, too narrow.

The simulation model contains nearly every detail about the castings to be produced with a given method. These details include not only the yield, but also the required chills, sleeves, flask size, cores and core sizes, cooling time and risers contact size, etc. All of these items have definite costs that are available in our foundry's cost accounting system. The sum total of all these costs provides an estimate of the total manufacturing cost to produce a casting with a given method. Thus, we aim to optimize the over-all all manufacturing costs, not simply to increase the yield.

Sales and Marketing Benefits

Whereas the operational benefits discussed above are significant, perhaps the most important advantage simulation has provided Sivyer Steel has been as a sales and marketing tool. For years, customers have pushed us for higher quality castings with shorter startup times and faster deliveries. Simulation is a tool that assists our foundry engineers in meeting these demands. Simulation's advantages are easily demonstrated to casting customers, and most, if not all, are quick to recognize how the system can work for them.

Simulation takes on many sales and marketing roles at Sivyer Steel. It is often the pivotal asset to convince customers to move problem jobs to our facility with the confidence that we can eliminate the defects that result in bad castings and missed deliveries. Furthermore, simulation has promoted the establishment of successful concurrent engineering relationships, in which we as a foundry help our customers trouble-shoot potential problem jobs before casting designs have been finalized. Such projects rely on the efforts and cooperation of numerous groups, and the monetary value of simulation in these relationships is impossible to calculate.

The Bottom Line

Because we decided to make the initial investment in simulation without a forecast of future cost savings, we have been interested in quantifying our savings throughout the implementation of the software. Although it's difficult to break out the cost savings and sales increases that Sivyer Steel can attribute directly to simulation and not other simultaneous advancements, such as our ISO 9002 certification, our casting tracking system, and other operational and marketing improvements, Table 1 lists estimated benefits of solidification at Sivyer Steel over the last three years. We consider these conservative estimates.

Table 1. Estimated Benefits of Solidifiation Software
1993-96

Benefit                              Savings(*)

Reduction of scrap and rework        $320,000
Reduction in manufacturing cost      $210,000
Profit on increse in sales revenue   $170,000

Total                                $700,000

(*) only when there was clear evidence that simulation
made a difference in a job, was a dollar value added
to the totals.

These cost savings data have already greatly exceeded our initial investment in software and hardware, as well as the costs associated with the time of the process engineer to operate the system.

An Asset to the Foundry

Since it was implemented, solidification modeling hasn't only been a cost-effective investment for Sivyer Steel, but also a major technical asset. Simulation has helped Sivyer Steel successfully move into markets with more complex and technically demanding work. The ability to predict internal soundness has allowed us to improve quality and deliveries, and has also provided us information required to make key manufacturing decisions based on accurate cost estimates before pattern construction even begins.

The technology has played an important role in Sivyer Steel's increased sales and profits since 1992, and we plan to continue our simulation activities in the years to come.