Geary Smith: Balancing Jobbing, Captive Challenges for MBAF.

Most small foundries are fighting for survival. Without the high production volumes to maximize profits on each component produced, small foundry managers are having to resort to becoming customer service specialists by reducing lead times and providing value-added services for components.

For Manufacturer's Brass & Aluminum Foundry (MBAF), Blue Island, Illinois, and its Vice President and General Manager Geary Smith, the struggles of increasing profitability are compounded by the fact that 25% of its production is sold at cost to its parent corporation (and next door neighbor) G&W Electric Co., a manufacturer of high-voltage electrical equipment. However, Smith has turned his foundry's part captive status into a positive by using that steady flow of production as a means to increase efficiency through technology mechanization and modernization. In addition, Smith has realized that the small foundry's future is providing whatever its customers need, including three-day order turnarounds and fully machined and heat-treated components.

This article takes a look at Smith's career and how his leadership has helped propel MBAF into the jobbing foundry market.

Growing Up with Metal

Growing up in Northwest Indiana, Smith knew he was going to end up in a metals-related industry. "My father, grandfather, uncles, cousins and friends worked in the steel mills," said Smith. "However, in high school, I was fascinated with my foundry class in shop. I loved to make the molds of statues and figurines and pour metal into them."

Smith followed this fascination to his first job after high school working in the coreroom for Hammond Valve Corp., Hammond, Indiana, a captive copper-base green sand caster of valve components. After eight months, Smith was promoted to coreroom supervisor at age 19.

In 1977, Smith left Hammond to join the captive copper-base Sloan Valve Foundry in Melrose Park, Illinois, as a general foreman. This foundry presented Smith with his first introduction to automatic molding and pouring. After an 18-month stint in Melrose Park, Smith accepted a job with Hiler Industries, Walkerton, Indiana, as a general foreman for its shell molding and core operation. This was Smith's first introduction to the jobbing foundry environment as well as to aluminum casting as Hiler cast both it and copper-base components.

"Every step of my career was a learning experience," said Smith, "Whether it was learning a jobbing foundry environment, aluminum casting or automatic molding and pouring, each step of my career has provided the foundation for the next."

In 1980, Smith received a call from Hammond Valve. The foundry was in the midst of a modernization project with the addition of automatic molding and pouring, but it was faced with quality issues. Hammond asked Smith to return to the foundry to help iron out the problems it was facing. Little did Smith know that the turnaround project he undertook at Hammond Valve would be the basis for his final career jump.

MBAF: Becoming a Job Shop

In 1979, Manufacturer's Brass Foundry, Blue Island, Illinois, had just been acquired by new ownership. The same family that had purchased G&W Electric had purchased the 40-employee copper-base and aluminum green sand caster. At the time of the purchase, the foundry was supplying 80% of its castings to G&W, and the owners saw the benefits of reduced inventory with having a just-in-time supplier. However, the ownership was looking for more.

It started by changing the foundry's name to Manufacturer's Brass & Aluminum Foundry (MBAF) to signify a new emphasis on both copper-base and aluminum castings. The ownership then brought in Smith to help begin a "true" venture into the jobbing foundry arena.

Although MBAF attributed 20% of its production to jobbing markets, the foundry had never focused on efficiency because its basic purpose was to supply G&W with its casting needs. G&W was focused on turnaround times of less than a week for its casting supplier and, as a result, largely ignored casting cost in place of turnaround times of less than a week for its cast components. By ignoring efficiency issues, however, MBAF's technology with green sand floor molding and four jolt-squeezer lines didn't place it on a level playing field with jobbing competition.

"The foundry was not profitable," said Smith. "In addition, it was supplying G&W with castings priced higher than what could be found on the open market. Ownership knew that just-in-time lead times of less than a week were important, but not worth lost profits."

Smith was hired for two specific reasons: to modernize the foundry and increase the jobbing side of the operation.

"I was brought in because of my experience with modernization projects," said Smith. "But as the foundry was becoming modernized, capacity would open up and efficiency would increase to allow the foundry to compete on the open market."

At the time of Smith's arrival in 1981, MBAF's outside sales were $200,000. The breakdown of casting production was 70% copper-base and 30% aluminum.

"Beginning in 1982, the first modernization project was the development of a sand system," said Smith. The foundry added a muller and sand distribution and return system. This was followed by the addition of two more squeezer machines, a large rota-lift squeezer and mold handling equipment. Then, Smith attacked the melt department, removing six gas-fired crucible furnaces and adding two electric induction furnaces. The next step in the '80s modernization was the addition of nobake molding. "We needed to add capacity for larger aluminum castings, and the nobake line allowed us to go after components with a fine surface finish," said Smith.

The final step in modernization for MBAF came in '97 with the addition of a new horizontally parted flaskless molding line. In total, the foundry spent $1.5 million for modernization from '82-'97.

"In the early '80s, MBAF wouldn't have survived the economic slowdown that hit the industry without the captive production from G&W," said Smith. "Today, the captive work is just one facet. The jobbing work is critical to our continued success.

For Smith, comparing MBAF's sales figures from when he started with the firm to last year's $2.5 million doesn't show the whole story of growth and increased efficiency. MBAF has reduced its dependence upon supplying G&W to 25% of total production while also reducing its employee count by 25% to 30. In addition, aluminum production by sales has grown to more than 40% of production, which coincided with the rise of nobake production to 40% of casting sales. The true indicator of efficiency, however, according to Smith, is MBAF's ability to produce castings for its parent company at a cost 5-15% lower than any of its competitors.

Captive vs. Jobbing

For Smith, the challenge of running a captive vs. jobbing foundry is based in economics.

"We are a profit center so despite the fact that 25% of our production is sold to G&W at cost, we must be profitable," said Smith. "This can be especially difficult when we have capital expenditures that must be based in profit contributions from only our outside sales."

Despite this financial restriction, Smith cites the short lead-time mindset that he must employ in his foundry as the greatest offshoot of the captive mentality. "Since we have to be able to respond to the needs of both our captive and jobbing customers in the same manner, we don't treat either differently," said Smith.

MBAF averages 10-day lead times between both its captive and jobbing customers with G&W orders being delivered between 3-6 days and jobbing orders between 1-2 weeks. MBAF currently has a 96% on-time delivery rate for all its orders and can supply components to both inside and outside customers within three days of order if necessary.

But Smith says the jobbing side of MBAF's business also is leading to benefits that will please its captive customer, MBAF has started supplying value-added components (heat treated and machined) to some of its jobbing customers. This was in response to a job it lost to a Chinese competitor that provided machining, assembly and packaging services to the customer.

"If a customer seems to place an expectation on your foundry that you deem unacceptable, whether it be cost or delivery time, you better rethink your stance," said Smith. "Ten years ago I would have never thought we could supply castings to our jobbing customers in three days, but we do."

Geary R. Smith

Vice President and General Manager

G&W Electric Co.'s Manufacturer's Brass & Aluminum Foundry

Age: 49.

Metalcasting Associations: AFS, Illinois Cast Metals Assn. (1st vice president).

Company Information

Founded: 1926.

Metals Cast: Copper-base (60%) and aluminum (40%).

Mold Capabilities: Green sand and nobake.

Core Capabilities: Shell and nobake.

Melting Capabilities: Electric induction and resistance.

Casting Size: Less than 1 lb up to 300 lb.

Plant Size: 36,000 sq ft.

Markets: Electrical equipment, food handling equipment and special machinery.

2000 Sales: $2.5 million (jobbing only).

Employees: 30.