Small foundries can compete.

The road to modernization takes time, effort, research and using existing resources, but it all pays off.

Conventional wisdom for the small foundry operator dictates that an ongoing modernization program is needed to remain competitive. This means devoting time, evaluating current operations and developing manufacturing, product and market options for the future. This "free time" isn't a realistic option for most small foundries.

What then can the "small guy" do if he can't support a planning staff and must rely on his wits to develop competitive programs? Where does he turn for help to hold and build his business? His problems certainly aren't unique. In one way or another, they are shared by every small foundry. Much depends upon knowing and using what is available, and the foundry community offers a lot of vital information that is there for the asking, much of it free!

Some of the ways for the small operator to "keep current" on modernization options are presented here as indicators of how varied the avenues are to more efficient, effective operations. The contest is to find and apply the resources available in time to make a difference.

To get this process under way, the foundry operator first must develop a strategic plan. N.M. Scarborough and T.W. Simmer, the authors of Effective Small Business Management, suggest several key steps to get started:

* develop a clear company mission statement stating near- and long-term objectives of the business;

* assess company strengths, weaknesses;

* analyze manufacturing capabilities, markets and competitors;

* set achievable modernization goals and objectives;

* formulate options to accommodate changes in product mix, markets, financing, costs, new processes, etc.;

* translate plans into action;

* establish accurate intrafoundry controls.

Simplified, these key steps broadly fall into four questions that require the foundry manager's careful attention.

Where Are We Now?

The answer provides the platform on which a modernization program is built. First, it's necessary to examine a foundry's equipment, market demand/accessibility, financial resources, employee skills and management's capacity to integrate objectives. Profit margins must be honestly evaluated, decisions made on what to do with low-margin castings, quality levels fixed for markets served and plant equipment and facilities assessed. Typical of the information required to develop a planning baseline include:

* an assets inventory (building drawings, list of equipment and utilities);

* plot a plan/adjacent properties, zoning, taxes;

* material flow and handling methods;

* process details;

* product information, yields, delays, startup, changeover, type, mix;

* raw materials, product inventories;

* shipping and receiving procedures;

* environmental data;

* current manpower, payroll, benefits, work rules, contracts, precedents;

* operating budget, materials costs.

This information provides a sensitive evaluation base that is the most difficult and time-consuming step in the process. If staff is available, the work can be subdivided. Further steps of the process, however, are critically dependent on the honesty and accuracy of this evaluation.

Where Do We Want to Go?

This step involves developing a marketing plan, a difficult task for the "small guy" who must wear the marketing hat as well. This approach, however, won't do for the 1990s and beyond.

A focused market strategy is essential to a modernization plan. One must know the projected product volume of his market for three, five and 10 years; the ranges of projected volume for any given business cycle; estimated product mix, yields and criteria for new products; forecasted sales, prices, margins and return on investment.

Market analysis and plans can be developed in-house, but outside marketing support should be sought if the effort exceeds time and talent. Outside consultants can be located through consultant directories (published in modern casting), suppliers, metalcasting courses, academics, and the technical staffs of manufacturing and raw materials organizations.

Market and trend data is available through AFS technical staffs, operating committees, and in industry and foundry trade association publications.

What Help Is Available?

After analyzing a foundry's technology, finances and market penetration and then determining where to go, it's time to evaluate what is "out there" to help the foundry reach its goals.

Traditionally, this task has fallen on the owner/operator, who relies on personal experience and advice from a few salespeople. While such advice is usually free, it's sometimes biased. Because the small foundry isn't a large-volume buyer, manufacturers' representatives are not frequent visitors. So the small operator must find other sources that, fortunately for him, are plentiful.

An obvious place to look for information are trade magazines that cover new and available technology and its practical applications. Probably next in importance is the AFS organization and the annual Casting Congress. Both give the small operator an opportunity to learn the latest technologies first-hand while meeting with knowledgeable suppliers and other foundry operators. Other resources are the AFS national library, local AFS chapter meetings, regional conferences and the meetings and publications of foundry trade groups.

Important, yet underutilized, sources are gas/electric utilities that have numerous programs to help upgrade foundries. For instance, the Foundry Office of the Center for Materials Production, an R&D applications center funded by the Electric Power Research Institute, provides detailed technical information and evaluations of foundry processes. It also supports foundry research programs to improve operations.

How Are Resources Used?

A key question is how to modernize when foundry size, finances and technical factors are paramount. Part of the answer lies in the use of the expertise available from foundry suppliers and consultants.

Modernization progress depends on staff expertise, time and funds available for outside help, but that doesn't necessarily mean that modernization should be placed on hold. To illustrate this fourth part of the small foundry modernization equation, a case study of a small foundry shows how it successfully incorporated many of these key principles--despite limitations.

Rexite Casting Co., St. Louis, Missouri, is a typical small foundry (20 employees) that looked to upgrade to assure its future as an aluminum castings supplier. Founded in 1916 by an art caster, the foundry was closed in the late 1930s. It reopened in 1945 to provide copper-base castings for the Manhattan Project, adding aluminum production soon after. It operated as a typical jobbing shop with no specific proprietary product. Copper-base and permanent mold aluminum castings were phased out, leaving the foundry configured for green sand molding for aluminum castings.

One Foundry's Journey

A decade ago, Bill Reck, Rexite operations manager, said his main objective was simply to stay in business. While it now sounds simplistic and short-term, that objective directed Reck and his staff to "do what had to be done," and is an outstanding example of a "homegrown" analysis of ways to remain competitive for the long term. Modernization required that Reck and his associates investigate their working and market positions and analyze the options open to them.

First, they addressed the question "Where are we now?" In 1985, production was satisfied with small hand/squeezer molding lines and gas-fired crucible melting furnaces. Molds were transported by hand, the entire casting process was labor-intensive and melt losses were excessive due to dross formation. Rexite then began a progressive modernization program that emphasized automation and productivity. To answer the second question, "Where do we want to go?" they surveyed major customers and prospects, confirming their decision to continue to focus on sand-molded aluminum castings.

The first area Rexite slated for change was the hand/squeezer molding operation. With the assistance of suppliers' sales and engineering personnel, a new high-pressure automated molding line was designed that used a Hunter HMP-18C molding machine in tandem with appropriate sand preparation and handling systems. The new line was installed in 1985 and now carries the bulk of casting production, while remaining hand/squeezer work is being phased out. The increase in productivity and quality has been enormous.

The next step was improving cleaning room productivity. Using a vendor's engineering assistance, a modern Wheelabrator shotblast unit was installed in 1989, increasing throughput and allowing the cleaning room to keep up with the molding department.

This was followed by the daunting task of upgrading melting operations to improve melt rate, metal quality and minimize dross losses. Rexite called on Union Electric Co., the local electric utility, to help evaluate the newest aluminum melting furnaces for handling the foundry's anticipated needs.

Union Electric provided Rexite with a case history of a small aluminum foundry using electric resistance melting that produced similar castings (prepared by the Electric Power Research Institute Center for Materials Production), and a survey of melting practices used by other local nonferrous foundries. Rexite contacted several electric furnace manufacturers for operating data and, assisted by utility engineers, prepared a detailed study of manufacturing costs for Rexite's needs.

The projected cost savings were significant and Rexite used the survey to select its melting furnaces. This change in melting practice affected most aspects of the shop's operations. To ensure a smooth transition, Union Electric commissioned an independent foundry process and energy audit to assess all aspects of the integration of the furnaces and identify other areas where quality and productivity improvements could be realized.

Installed in early 1992, the furnaces provided the predicted gains in quality and productivity projected in the utility's analysis. Foundry energy efficiency is monitored on a regular basis, and additional operating efficiencies are made as the foundry becomes more proficient with new production procedures.

As the modernization projects neared completion, additional automation opportunities and productivity improvement became apparent. Manual handling of molds was replaced by a relatively simple, dedicated mold handling device engineered by Rexite's staff that has further increased productivity.

Still to Come

Pouring--the last area to be addressed by Rexite--is done with conventional dip-out shank ladles. This limits the weight of the full ladle to about 40 lb. Although the pourer can handle the weight, accuracy and consistency of each pour are questionable.

To improve this, installation of a dip-out style, automatic pouring device is planned. This will complete the improvement chain from sand preparation to the cleaning room, and provide the modernization that Rexite management conceived seven years earlier. At little or no cost, the foundry drew on a number or resources to engineer a comprehensive modernization program that positioned the foundry to meet the challenges of its markets.