Road trip revelations for success. (Editorial).

The location of our offices outside Chicago place MODERN CASTING in the heart of foundry country. As a result, our staff continually takes one to two-day road trips throughout the Midwest to meet our industry firsthand.

Although these trips often turn into foundry profile and Product Innovation articles for the magazine, the main benefit is the knowledge our staff gains about our metalcasting industry by talking to the people immersed in it. I would like to share with you some of the knowledge imparted to me on recent road trips.

Survival Techniques--A recent trip to an independent gray iron plant demonstrated how a U.S. foundry can compete against low-cost foreign competition. Matched up against global heavyweights, this 300-employee foundry has advanced its technology and casting dimensional repeatability with an automated core production system it installed in the mid-90s. In addition, the firm has automated its cleaning and finishing with the addition of manipulators to existing equipment, reducing labor by more than 70%. This automation reportedly has brought its man-hours/ton throughout production close to single-digits.

According to the firm, its competitors' weakness is heavy reliance on inconsistent (albeit cheap) labor. As a result, the foundry has counterattacked by eliminating labor and replacing it with the reliability of well-engineered processes and equipment. When selling in its global market, it offers customers equivalent or close to equivalent prices but with a more than five-year history of consistent quality.

Listening Is a Skill--Customers provide some of the best food-for-thought. After a tour of an engine assembly plant, an OEM design engineer explained the - difficulty he, as a casting advocate, has in driving design changes to produce near-net-shape castings or conversions to castings due to supply chain hierarchies. Since machine shops tend to be the Tier 1 suppliers buying the castings, any design changes that will reduce the machining dollars in a component are met with resistance.

I then asked: "Why not source more components to foundries as Tier 1 and have them supply finished castings?" The answer: "Find me a foundry that wants the responsibility."

An engine manufacturer can't find a foundry willing to provide value-added services either in-house or through outsourcing. Is our industry not responding to customer requests or are we not listening? The design engineer said that diecasters understand that finished product sourcing "is the rule instead of the exception," but iron, aluminum and steel foundries, for the most part, still "act as if it is an imposition."

For survival in the price-driven global manufacturing economy, foundries must assist the customer with any services necessary to ensure the component remains a casting. Why shouldn't foundries become the dominant Tier 1 supplier of castings instead of the machining houses? Then, we could be in control.

Middle Class Warfare--During visits to two midsize foundries (less than 200 employees), discussions focused on what U.S. foundries must do to compete against China. Both foundries are in the same struggle as a large percent age of their medium-volume work (production runs from 100 to 100,000/year) is being secured by offshore competition in China at price reductions of 40-50%.

One firm's president offered this solution: "I want to go (to China) because it offers an opportunity for revenue growth by supplying the Chinese market. Our main (product) is critical in the development of the country's infrastructure. The opportunities to supply China are endless."

Although many metalcasters are and have considered producing their own components in China, most have done this with the intent of selling them in the U.S.--not in China. Why not turn the tables on offshore competition? Although not every foundry has the means to build a plant in China or some other offshore arena, options exist to form partnerships and joint-ventures that secure your firm's place in the global community.

Our industry's future success depends on our ability to evolve from past failures and successes. If my revelations haven't provided you a springboard for future successes, take your own road trip. You may be surprised at what you would learn.