Communicating 'total costs' to purchasers. (Marketing).

AS indicated by the record attendance, the "Market - Driven Foundries in the 21st Century" session was of great interest to casting marketers. While the session featured three very different topics, each focused on ways to compete vs. low-cost nations.

"Hidden Costs of Foreign Sourcing" by Aurora Metals' D. Bumbar directly focused on the offshore issue. It was meant to arm foundries with information to present to purchasers being pressured to buy offshore.

Bumbar presented a list of expenses any manufacturer incurs by buying castings offshore. These include overhead costs of designated personnel, travel expenditures, freight, inventory storage, and associated fees and expenses (bond, broker fees, etc.). Assigning actual numbers to these areas, Bumbar concluded that a firm with annual casting purchases of $1 million will incur 20% more in costs than from a domestic supplier. When considered in this light, the price differential can close significantly.

Beyond real-world problems in metallurgical integrity, dimensional consistency and tooling, Bumbar described additional big-picture consideration. These include communication difficulties, lead-times, emergency supply issues and currency valuations. More information will be provided in future issues of MODERN CASTING and Engineered Casting Solutions.

In addition, M. Gwyn, Advanced Technology Institute, outlined a practical framework for securing casting conversions, which can provide value-added margins and offer better protection from global sourcing. Also, in a presentation on how to compete vs. foreign competition, Todd Nelson explained Dotson Co.'s 10-step approach to reverse its loss of business, increase sales, improve value as a supplier and increase profitability.