Southern Aluminum's evolution to full service automotive supplier.

Founded on the rock of automation, this foundry realized enormous growth simply by performing and being willing to change for the customer.

In its inaugural year in 1973, Southern Aluminum Castings (SAC) Co., Bay Minette, Alabama, began producing five aluminum castings for a dental chair manufacturer, setting a course for a successful green sand jobbing business that would produce 400 different castings for more than 100 customers over the next 13 years.

Zoom ahead to 23 years on the company timeline and, ironically, the foundry's customer list is the same length as it was when Jim Hunt founded the company in 1973 (one customer). But a lot has happened in the last 23 years, and SAC has gone far beyond just being a sole supplier of castings to Ford Motor Co. Much more than simply an aluminum foundry, its 600 employees now provide complete machining and full assembly to the automaker.

President and founder Jim Hunt was quoted shortly after its founding as saying, "What we really want to do is make our foundry a department to each of our customers." While there is only one customer today and the company was sold to Citation Corp., Birmingham, Alabama, earlier this year, Hunt's philosophy still rings true. The difference, however, is that the "department" is far more encompassing than 23 years ago.

A Momentous Decision

By 1986, SAC had built another onsite foundry and had recorded $4 million in sales while serving the truck, automotive and computer markets. That year, it was about to alter its face forever. As a result of high-volume automotive work from Ford (it received Ford's Q-1 Award in 1985), it decided to exit the jobbing business and become a high-volume automotive casting producer.

The most critical issue of that decision, said Mike Irby, vice president-finance, was finding a new home for $4 million of jobbing castings. "Our salespeople went out and found new sources for our customers' work," he said. "We contacted our customers, and said, `Here's the name of a foundry we recommended to cast your part, and why the tooling works best there.'"

(Speaking of sales, SAC no longer has a sales force by common definition. "Our sales force is our engineers," said Hunt. "The foundry sells itself on its concept of engineers sharing in the design process.")

By 1988, based on expanding orders, the decision was made to source castings only to Ford. Explains Irby: "In the '70s and '80s, Ford split their business between one to three suppliers on smaller jobs. We simply performed when others failed, and as a result, Ford gave us opportunities to quote on higher volume work.

"They were always good to work with. We had courted Japanese producers, and at times looked for other customers, but when given the chance to expand with Ford or elsewhere, it was always Ford."

Today, with three onsite foundries, the firm ships 10,000 tons of Al-319 castings per year. Producing 20 different part numbers, the annual volume of Ford parts produced at SAC include 800,000 lower intake manifolds, 1.2 million throttle body adapters, 500,000 remote oil coolers and 1 million oil filter adapters.

At Ford's request, the firm also began providing complete machining and assembly in 1992. Of the castings listed above, 55%, are shipped as finished assemblies to Ford Cleveland, Essex, Romeo and Windsor Engine Plants. The balance either goes directly to Ford or to one of three independent machine shops, who in turn supply Ford.

This value-added capability is expected to boost the company's sales from $18 million in 1994 to $75 million this year.

Happily Married with Ford

As mentioned earlier, SAC is the 100% supplier for every casting it produces for Ford. While Ford had 4000 suppliers in the engine division several years ago, it now has 1200, and plans to further reduce that number by another 200 over the next four years. "Before," Irby said, "we made the casting, someone else would machine and someone else would assemble. Now we do it all; that's our niche. Value added."

He said Ford leans heavily on its suppliers, and admits there is pressure for improvements in quality and price. "We committed to a 4.5% annual cost reduction for the 1995-97 model years," Irby explained. "But Ford doesn't want us to just cut our margin. It wants us to get there through productivity improvements and tying continuous improvements to our suppliers."

He said SAC has achieved necessary cost reduction through the firm's high degree of automation, as well as teaming with the automaker in casting design. "A lot of cost-saving can be found in the two-year design phase," he said. "Their expertise in maximizing engine performance is coupled with our's in manufacturability, and we make their designs more foundry-friendly. We can do things like making more cores, or identifying changes to allow us to go with a four-on pattern rather than a two-on, and so forth."

SAC's engineering expertise is another of its foundations. Early in its history, it offered permanent mold capability, but found the permanent mold jobs it quoted on to be more cost-effective for green sand, and made numerous redesigns. Eventually, the firm sold its permanent mold equipment.

With the machining and assembly additions, SAC has made life infinitely easier for Ford. With demand for components changing on a weekly basis, Ford has only one firm to deal with on SAC's parts, rather than a myriad of supplier and subsuppliers. "Now they have only one firm to communicate with, and there's no pointing of fingers," said Irby. "We have the responsibility."

Machining and Assembly

SAC began machining in 1992, when it received a small-volume order for lower intake manifold and throttle body for the 5.8 liter F150 Lightning Truck. Those pieces also went into the first assembly job for the firm, as SAC was asked to add a tube to and paint the throttle body, and install a baffle plate on the lower intake manifold. The next year, it received an order for the finished assembly work for a special police car oil cooler.

"We started small, knowing we wanted three to four years to gain that knowledge," said Irby about the new venture. In 1995, its value-added machining and assembly was at full swing.

At the new 40,000 sq ft machining center (only a couple of miles from the foundry) are 10 dial index machine centers and six CNC Toyoda horizontal machining centers, for high- and low-volumes, respectively. "One difference compared to traditional foundry-machine shop logistics, though," said Irby, "is that we aren't as picky on cosmetics. Many independent machine shops dictate better quality than stated in the blueprints. For instance, why should we take the flash off if it'll be machined later? We can correct insignificant things in the machine shop rather than rejecting and returning parts to the foundry."

As the high volume castings enter machining, they're loaded on one of the 10 dedicated dial index machines. With 6-14 stations per machine, the operator fixtures the casting, and each station within the unit performs a machining function before indexing to the next. As the operator removes the fully cycled casting, a new one is fixtured to begin the cycle. Generally, these dial index machining centers can machine 200 pieces/hr (most low-volume machine shops have CNC machines that, because of necessary part size flexibility, can only machine 10 pieces/hr). Most parts will be fully machined after passing through two dial index machines.

Following machining, castings may enter either manual or automated assembly, depending on the part. The throttle body, for instance, will be placed on one of six automated assembly carousels, each needing only one operator. The process consists of:

1. castings passing through a parts washer.

2. castings placed on a fixtured pallet.

3. pallet advances to station and lock-tight is applied to casting and tubes are pressed in.

4. flow testing.

5. leak testing.

6. barcode labeling.

7. advances to operator. It will either be kicked to the operator for acceptance or a light will flash, indicating an error.

8. loaded into custom-designed dunnage for shipment.

Illustrating the added sales that assembling parts holds, the remote oil cooler for the 4 x 4 trucks contains a 1 lb casting that sells for $5. SAC purchases the oil filter, bracket hoses, oil sensor switch and oil cooler, and assembles it and sells the complete component to Ford for $90.

Purchasing $15 million/year of outside components and managing the assembly is a complex task, Irby said. SAC manages the inventory and deals with 25 suppliers, most of whom are from the U.S. but may also hail from Sweden and Mexico. Each Tuesday, Ford provides SAC with a 10-week firm release and planning figures for four months. "We use that data to communicate with subsuppliers on an as-needed basis. It takes the pressure off of Ford, but managing the supply is complicated. For instance, if we need a component that costs $35/piece, you can see that we can't afford to have large inventories hanging around."

In addition to the SAC's supplier coordination tasks is the responsibility of incoming material inspections. Irby said: "We have the responsibility of all those subsuppliers and must make sure that if they aren't Q-1 certified, that they meet all quality requirements."

Commitment to the Best

From the get-go in 1973, the foundry established itself as a leader in automated molding. Today, with automatic molding machines and turntables, robotic lading and the new automatic coresetting equipment, foundry labor consists of only one man at molding (to operate the coresetter) and one at shakeout.

"We've been lucky to have new work coming in to continually upgrade our foundry. The work was always in hand before we put new equipment in," Irby said. "In terms of equipment, we're a young, modern foundry."

SAC melts and holds in seven reverberatory furnaces, ranging in bath size from 10,000-45,000 lb. Molding is handled by seven Hunter molding machines, four 32's and three 20's. Produced by the phenolic urethane amine coldbox process, coremaking is handled by nine machines: five Beardsley & Pipers and four Sutters. Automatic ladling has been in place at SAC since 1987, and the pouring station is further automated through computer-controlled grain-refining.

Among the newest additions to the operations are new Fata core knockout machines and a Mossner programmable cutoff saw application for lower intake manifolds--both discovered at GIFA shows. Already in use overseas at Volkswagen and Mercedes, the Mossner heavy-duty bandsaw was installed at SAC in 1995, becoming the first installation in the U.S. The cutoff operation is entirely automated with the use of robots.

In addition, the firm has a new Wheelabrator continuous blastcleaning unit that allows easy automated transportation of castings via conveyor into the unit for easy throughput. A new hook conveyor system bringing castings from shakeout to knockout (in a separate building) eliminated forktruck loading and lifting of castings. Operators simply attach a hook to the casting as it exits the shakeout. The result is a foundry entirely free of basket after basket of castings waiting to be processed.

"For a small company, we've always tried to pursue the best in equipment and technology," said Hunt.

Having spent $40 million in capital investment and tooling over the past two years, Irby said, "I'd put our foundry and machine shop up against any in the world. Especially the machine shop--everything is fewer than two years old."

In addition to its automation, SAC is also unique in that it purchases scrap and alloys itself. "You can control chemistries better and tighter, and produce your alloy for less money," Irby said.

Also, they have extremely tight control of the chemistries. While the 319 specification calls for a range for copper 3-4%, Irby said, "We're always 3. 1%. It's the same with iron--we have a set level of 0.7%. We've found that metal composition does impact quality, even within acceptable ranges."

With process controls in place, Irby said that scrap levels are 1.5% to machining, 0.10% to the customer and 3-4% internal scrap. "And we're working to reduce those further," he said.

Talking about SAC's progression over the last 10 years Irby said, "We hadn't expected this type of growth, but we had such good systems and service that our customer always wanted us to take on more work. Our success has been 50% luck, but you get that luck by having the right people and equipment--you can create your own luck."

With new resources as the result of being acquired, the growth path for SAC is expected to continue, as it obtains QS 9000 this winter ("Being Q-1 certified, we're 75% of the way there," said Irby.) and takes on more value-added responsibility. At any rate, SAC will continue as more than just a casting producer.

RELATED ARTICLE: Hunt: `Southern Aluminum's Successful Path Began with Competitiveness from Day One'

When dental chair equipment manufacturer Den-Tal-Ez relocated from Iowa to Bay Minette. Alabama, Hunt, who was a part-owner of his family foundry. Fairfield (Iowa) Aluminum Casting Co., followed the company to set up SAC in '73 with a building and capital investment cost of $750,000. He soon began producing Den-Tal-Ez's five castings, and charted his course into the jobbing business. He had 15 customers within one year, including Homelite, Peterbilt, Westinghouse and General Electric.

"When we started, our plan didn't go beyond our single foundry with two automatic molding machines," he said. "But as we began to grow, we reinvested nearly all the earnings back into the plant--taking out only what my wife and I needed to live on."

In 1982, SAC received a waterpump casting order for the Ford Escort and Lynx, "mostly because other supplies fell down," Hunt said. Soon, SAC was producing 35,000 pumps/month.

A new foundry was constructed onsite to handle the emerging automative business, while the other remained a job shop. In 1986, SAC exited the jobbing market, and, within two years had only one customer.

Reflect on the journey, Hunt said, "From day one, we started out with the automated molding machines for competitiveness. With equipment, we always spent money on the best available, taking key company officials to every foundry equipment show, and in 1984 attending the GIFA exhibition in Germany. We were always looking to see what else is out there."

One of the pioneers in small foundry automation, Hunt (a certified public accountant), saw early on that there was too much labor in processing, while automatic molding could produce 800 mold/day. His mindset toward improved competitiveness through automation is evident in the firm's robots for ladling and casting handling; cutoff saws and the hook monorail for transporting casting.

When asked of his lessons learned, he said the key is upgrading in facilities, equipment, personnel, management and customer base. "You can't start out with everything you want, but when you decide to embrace a new customer, see that it's is the best to work with. When an employee leaves, upgrade and find a better one. With equipment, find better equipment than what you had previously.

RELATED ARTICLE: Time Needed to Learn From Launches

While product launches are exciting times for the both the foundry and customer, Irby, who's seen eight launches in one month, said caution is necessary. If an initial launch allows a 3% margin, for instance, there must be time for internal tweaking and learning before higher margins can be achieved. "Given time, these will take place," he said.

For instance, on the recent programmable sawing installation, SAC experimented with six different types of blades before the best one was found. "The same is true for the casting process," Irby said. "As you go, improvements can be recognized and made."

He said a foundry may be better off expanding its capacity with improvements that come from having time to learn ways to do it better." And this takes place without new capital," he said.