Foundrymen examine ways to better serve customers.

Casting buyers spoke out, forecasts were shared and computerized sales tools were evaluated to enhance casting sales and marketing.

From updates on current and future market trends, to using computers to manage your foundry's marketing and sales effort, including advertising on the Internet, the AFS Marketing Conference "Trends & Technology," offered foundry officials an inside look at the future of foundry marketing.

Held June 18-19 in Glenview, Illinois, the conference attracted more than 70 foundry sales and marketing officials and featured 10 speakers, including a visit from baseball great Jimmy Piersall, currently an outfield coach for the Chicago Cubs.

The 'Perfect' Casting Supplier

In a panel discussion, casting users discussed the characteristics of the "perfect" supplier in the year 2005.

Describing his company's vision of the ideal supplier, Brian Hutton, NACCO Materials Handling Group, Inc., pointed out the need for a strategic supplier base. "We are focusing on fewer suppliers that strive for quality and consistency, and we must build stronger strategic relationships with mutual objectives," said Hutton. His firm is concentrating on early supplier selection to allow reductions in product development and lead times. "We, and other casting users, are expecting more development input from the foundries," said Hutton.

According to Gene Ohrmund, Tecumseh Products Co., all suppliers are rated on quality, service and value. "Quality is a given," said Ohrmund. "If you don't have it, you definitely won't survive. But the perfect supplier will have all three of these characteristics."

Also on the panel, Jeoffrey Burris, Simpson Industries, Inc., and Robert Puder, Case Corp., asked the question "Where do our customers expect us to be in 2005?"

Burris highlighted four major areas OEMs focus on, including value, global enterprise, technology and engineering and adaptability. In the area of value, he said customers will require double digit PPM levels and competitive pricing. This means suppliers must concentrate on better process controls and continuous cost improvement.

As a global enterprise, Burris said Simpson (along with many OEMs) will be producing its goods in many countries and regions and foundries will need to have global engineering support and global production capability.

In the area of technology and engineering, foundries will be expected to have better R&D capabilities and onsite support. And because end-users must be able to quickly adapt to the marketplace and the economic environment in 2005, foundries must have a better understanding of the global competitiveness of design manufacture, quality and cost.

"The closer we work together with the foundries, the more value we can provide to our customers," said Burris. Discussing the importance of continuous improvement, he said, "In 2005 you may get the plaque for customer satisfaction. But in 2006 you'll be forgotten if you don't continue to improve and adapt."

Puder admitted that "we have to be better customers before we can tell our suppliers how to be perfect." He shared some of the points of Case's new purchasing program that separates parts into casting segments:

* critical - parts that require special cleaning and specific metallurgy strength;

* medium critical - parts with standard requirements;

* noncritical - as-cast products or counterweights.

Once the type of part needed is determined, the supplier is judged by five characteristics; manufacturing, technical services, engineering, supplier relationship and total acquisition cost.

For critical castings, manufacturing, technical services and engineering are the most important characteristics of the supplier.

From this point, strategies for each segment were developed. For critical castings, Case identifies suppliers with leading technology and integrates them into the design and development of the part. For medium-critical parts Case identifies a cost advantage supplier.

Some benefits Case has realized using this process include more equitable pricing, shorter lead times, less uncertainty with fewer suppliers and fewer variations, and better quality. At the end of day," said Puder, we want to bring our supplier closer to the customer to result in the least cost, the most flexibility and the fastest product delivery."

Computers' Role in Sales

"The job of the sales representative isn't any different today than it was five to 10 years ago, and it won't be much different in the future," said Todd Nelson, Dotson Co. "We need to talk to people and we need to get our potential customers' attention."

He and Dennis Dotson, explained how the gray and ductile iron foundry has been using computers for 10 years to manage their sales program.

"As sales representatives, the more we keep in contact with the customer, the better the business relationship," pointed out Nelson. "Using a management program, you can easily keep track of everything you do with every customer."

Dotson added: "Using management programs is a simple way to keep track of and put together a presentable information sheet for customers. Keeping all this information on the computer builds the credibility of your sales representatives. Rather than lugging around a huge briefcase of papers, a notebook computer can store all the information needed and can be accessed much quicker than sorting through years of papers."

A good management program allows the sales department to keep a handle on all aspects of a job and helps to eliminate problems before the casting reaches the customer.

According to Dotson, if a company is starting from scratch, it will need a notebook computer with 16 megabytes, one gigabyte, Windows '95, and a 28.8 speed modem, the information management software of your choice, Microsoft Office professional software and a printer. Dotson said this can cost from $3000-$8000.

Foundries On-line

"As much as the fax machine has changed our way of communication, e-mail goes one step further," said Dotson. "Communication is even quicker and much less formal." E-mail can be sent and received anywhere that there is a phone line and response time is much quicker than by fax. With a scanning device, said Dotson, any sort of document can be entered into the computer and attached to an e-mail message if necessary.

Don Beacom, Magic Bus Ltd., explained the advantages of using the Internet in business. "By using the Internet, the limits of time, location and capacity can be made less constraining," said Beacom. "On the Internet, you can reach people 24 hours a day, anywhere in the world, while minimizing your costs."

According to Beacom, the Internet has been around since the early 1970s and was used by the military as a massive communication network that could withstand nuclear attack. Today the Net is changing dramatically. More and more people are getting involved; in 1993-94, the number of users was doubling every month.

Today, foundrymen can use the Internet for research and checking out the market or competition. Nearly unlimited information is available for as little as $20 per month.

Foundries can also set up their own informational home page that tells the company's story and what it does. Beacom says this costs a few hundred dollars and you can either do it yourself or hire a professional. The process, according to Beacom, may take up to a week, but you will tweak and update the page forever.

Another option 'is to set up an interactive home page. Using an interactive home page, you can provide customers with real-time information and get feedback from users and potential customers. This costs substantially more than just an informational home page - up to $1.5 million - and usually requires professional assistance.

Some suggestions for tracking the activity an informational home page generates were offered by Beacom and foundrymen in the audience who have already implemented the use of a home page. These included offering electronic coupons or setting up an 800 telephone number that is only published on the home page.

According to Beacom, worldwide sales over the Net were estimated at $24 million in 1995. "This is a relatively small number," said Beacom, "but business communication is just as important as passing actual money through the Net. Lots of information will change hands over the Net that will lead to sales."

Economic Overview

"Casting shipments as a mature industry are closely linked to the economy and the growth patterns of major customer markets," explained economist Edward Trubac, Univ. of Notre Dame. "The casting sector is far more volatile than the broad economy during periods of recession and recovery." This, according to Trubac, is due to the fact that many castings go into products that people don't need in hard times, like new cars. But when the poor economic climate clears, there is a surge of buying.

Offering his evaluation of the economy's status in 1996 and the future, Trubac predicts that the production of cars will be down 5% from last year, light tracks will be up 5% and the production of heavy trucks will go down significantly.

Six months into the year, domestic car sales are ahead of last year, but production is behind because of an increase in production in Mexico. Heavy truck production is running about 13-14% below last year.

Trubac said at this point he sees a balanced recovery with little chance of recession this year or next. The Blue Chip consensus forecasts call for a 2.5% gross domestic product (GDP) growth in 1996 and 2.1% growth in 1997. For metalcasting, the 2% GDP growth means few, if any, gains expected in casting shipments.