The cost-value relationship of metalcasting technology.
Author Warren Bennis has suggested that the manufacturing plant of the future will house two beings: a man and a dog. The man's job is to feed the dog, and the dog's role is to stop the man from touching anything. This may be an exaggeration, but the foundry industry has undergone a steady evolution resulting in streamlined operations, process controls, workforce empowerment and increased productivity. In addition, technology advances have allowed us to better control dimensional tolerances, reduce scrap and enhance casting finish.
This paper traces the cost-value relationship of technology in the metalcasting industry since World War II and suggests a megatrend view of the foundry of the 21st century.
It is worthwhile to analyze the cost of assets (including capital, equipment, and human resources) today vs. about 20 years ago in relation to the value generated by foundry corporations. Moreover, it is important to identify the parameters that drive these cost-value relationships.
Table 1. Cost of Foundry Tools: Then vs. Now 1925 1995(*) Shovel $2.00 $60.85 Riddle $3.00 $91.28 Snap Flasks (24x30) $43.75 $1331.16 Wheelbarrow $21.00 $639.00 Slicks (set of 10) $10.00 $304.26 Core oven (2-door) $367.00 $11,166.50 Truck ladle (6 tons) $740.00 $22,515.55 * inflation adjusted at 5% annual rate
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An interesting comparison is to look at the past cost of foundry tools. Table 1 shows prices for foundry tools as found in a 1925 catalog from Hill and Griffith Co., Cincinatti. If we correct these prices for inflation, using a 5% a year rate, we can see a wheelbarrow's price at $639 and $11,166 for a small core oven. These are steep compared to actual prices today. Perhaps the "good old days" weren't so good.
The average cost of a "greenfield" foundry in 1963 was $600-900 per ton of annual capacity. Today, including the cost of new technologies and environmental compliance, an automated greenfield foundry will cost $1800-2000 per ton of annual capacity - more than double the cost in 1963.
If we correct the cost per ton of annual capacity of 30 years ago to today's dollars, take the average cost of $750 in 1963 and assume an annual 5% inflation rate, we obtain a present value of $3200 for 1 ton of annual capacity. This is far more than today's cost of $1800, even though more than 20% of the $1800 is earmarked for environmental compliance equipment. This points to the value of technology...the technology that is perceived to be "so expensive" provides the foundryman real value and reduces the cost per ton. The Peoria, Illinois, Caterpillar Foundry designed in 1967 with 1 million sq ft, 7 lines automated with power pattern transfer and "good" environmental compliance for that period, was built for $100 million. Today, the estimate from Lester B. Knight Cast Metals, Inc., Chicago, is that the cost would be more than $225 million. Again, this looks like a large increase; however, if we correct the 1963 numbers to the present value we find that the $100 million is $500 million. Today's price is quite attractive.
Examining specific industry lines, we find similar trends. It's particularly interesting to compare indices such as tons produced per employee, and $ per ton. Table 2 shows the numbers for a ductile iron foundry using vertically split molds, and compares them for two time periods - actual 1974 values and inflation adjusted values for 1995. We can see that the fixed gross assets increased as did the tonnage and the employees.
To make a fair comparison, the gross fixed assets have been brought up to a present value using a 5% inflation factor. It is surprising to see that the gross assets per ton in 1995 have gone down by 17%, whereas the gross assets per employee at $89,574 is 192% above the 1974 value. We could say that we got our money's worth! Production per employee is up to 122 tons/employee, which is an increase of 252%. The thesis crystallized by these figures is that technology has decreased the cost per ton of castings produced.
Table 3 shows the data for a gray iron foundry producing blocks, heads and other small parts for trucks. This foundry made major investments in the '80s, transforming it to a state-of-the-art operation. On an inflation adjusted basis, the assets per ton increased from $446 to $666 - almost a 50% increase. This increased the investment per employee by 217%. Similar to the previous case, production per employee increased 111%, at more than 120 tons per employee. These are impressive statistics.
The figures for a multiplant operation producing a variety of gray iron and ductile castings are given in Table 4. We observe that the gross assets per ton increased by 8% during the last two decades (a low number at $295 today). The gross assets per employee have gone up to $67,548 - a 20% increase - and the tonnage per employee has risen 10% to an enviable 228 tons per employee.
The data for a ductile iron foundry using horizontally split molds is given in Table 5. Since 1974, the gross assets per ton have decreased 75% and, even on a gross assets per employee basis, there has been a decrease of 25%. The gross assets per employee are in the low range for the foundry operations we have examined. The figures for 1974 are distorted as the foundry was acquired in 1974 and the assets are based on the purchase price. The critical and noteworthy figure is the tonnage per employee - a 197% increase from 1974!
All four examples cited are foundries in full environmental compliance. Today, in the U.S., environmental costs run around 20% of total assets, with equipment operating costs of about 23% of total costs. Even with the investment made for environmental concerns, the investment per ton of casting is down or slightly above 1974 figures.
In addition to technology, management changes have also transformed [TABULAR DATA FOR TABLE 4 OMITTED] [TABULAR DATA FOR TABLE 5 OMITTED] the foundry industry. In the '70s, hourly labor was 70% of the labor costs. Today, it is less than 40%. Maintenance costs have increased from 7-9% to more than 20% today. The number of employees have decreased, the mix of skills has changed, and the management skills needed today appear to be quite different. Team building and empowerment are the keystone of today's foundry. The training and educational investment that is being made at our metalcasting shops are paying big dividends. Today's foundry requires a lower investment per ton of casting than 20 years ago, and the product has better dimensional tolerance, lower scrap and better casting finish.
Impact of Technology
World casting production increased 42% over a period of seven years between 1987 and 1994 (Table 6). Even though total actual production for the U.S. during this seven-year period increased by 28%, the U.S.' share of the world market decreased from 22.1% to 20%. Though aluminum casting production stayed the same at 29% of the total world production, other than steel, copper and magnesium, market share for all other types of castings decreased. Value creation for our customers is the key to increasing market share, and technology is the principle means of achieving that objective. Technology has the power to develop and attain: new and higher value added processes; new and higher value added products; and cost reductions.
There are several examples that attest to the "power of technology" in the process development area. Molten metal processing advances during the last decade have had an enormous impact on our industry. In aluminum casting, we have witnessed:
* metal treatment via grain refiners and modification;
* thermal analysis of the molten metal before pouring to ascertain quality;
* the use of rotating degassing equipment;
* the use of hydrogen gas measurement devices;
* the use of filtration technology to remove inclusions;
* measurement devices to quantify the level of inclusions.
During the last decade, the quality of the molten metal being poured by metalcasting shops has dramatically improved.
Solidification modeling is another major advance that has changed our operations and resultant cost-value relationships. The days of trial and error are gone; we can model, simulate and predict defects due to filling - as well as feeding - during solidification, allowing us to fix the "problem" at an earlier stage.
Over the last decade, technology has played a major role in the development of processes to mass produce automotive components such as engine [TABULAR DATA FOR TABLE 6 OMITTED] blocks and cylinder heads. Cadillac's V-8 block is die cast and uses slip-in wet liners. At Porsche, a linerless V-8 block of a hypereutectic alloy is cast by low-pressure permanent molding. Honda, on the other hand, manufactures I-4s and V-6 blocks with cast-in bore liners using high-pressure diecasting. Honda also makes an I-4 model with cast-in liners by medium-pressure diecasting using a sand core to form a closed deck face.
While these three examples use metal molds, Ford Motor Co. has taken a different path by employing precision sand casting, the Cosworth process. The 100% sand process (using zircon sand) leaves little flash, thus reducing cleaning and finishing operations. It also eliminates the expense of metal molds, as well as the costs and shortcomings of dry sand cores and green sand molds. This precision sand process' benefits are: 85% or better yield; 10-12% lighter castings; excellent mechanical and physical properties; and the ability to specify machining allowances in the 1.5-2 mm range. Using this technology, Ford's Windsor Aluminum Plant, at full capacity, is producing 1 million engine blocks per year.
Another story that exemplifies the impact of technology in reducing costs and creating value is the development of lost foam (expendable pattern casting) and its use at Saturn Corp.'s foundry in Spring Hill, Tennessee. In 1994, lost foam foundries produced 63,000 tons of ferrous castings and more than 104 million lb of nonferrous castings. The biggest end user of the process is the auto/truck market with 33%, while plumbing is the next largest at 18%. The Saturn story is a process designer's dream in that the product was driven by this new process; it was the case of designing a process for individual products rather than forcing the product into a rigid generic process. Saturn project engineer Jim Deppler's statement makes the case for enhancing cost-value relationships in metalcasting: "To put the benefits into perspective, on the block and head machining lines alone, over 16 in. of drilled holes are avoided using as-cast passages not attainable in other processes. This equals more than 16 in. of aluminum not generated into chips on each engine, yielding significant reduction in variable operating costs and aluminum material cast. We paid for the foundry in machining, component and assembly cost avoidance."
Semisolid metal processing (SSMP) is another technology that has great potential to enhance value and reduce operational costs. A relatively new technology with few commercial applications at present, it has a bright future ahead. The process takes advantage of the thixotropic properties of the semisolid slurry, which has been prepared in such a way as to break up the dendritic structure of the solid component. The main advantage of SSMP is the higher apparent viscosity of the slurry introduced into the mold cavity, resulting in finished parts with lower porosity and better mechanical properties.
The lost foam process driving product development at Saturn Corp. is a good example of the symbiotic relationship between process and product. Two cases of product development and their beneficial impact on cost-value relationships reaffirm the connection between process and product development.
Societal concerns for the environment have motivated the development of new products and processes. One such target of opportunity is titanium aluminide (TiAl) automotive valves, which allow higher engine operating temperatures resulting in significant fuel cost savings. The valve material used today is austenitic steel (21-2N) and finished valves cost $1$3. Lifetime and engine temperatures are limited by the material properties of the austenitic steel. However, reducing the weight of a piston by 50% through the use of TiAl will result in fuel savings of 2-5%. Assuming a value in the middle of the range of 3.5% fuel savings, this means a national fuel savings of 4 billion gal of gasoline per year, or a $5 billion a year savings.
The development of products such as TiAl valves clearly creates value for the customer. As for the cost of the product, the basic raw material cost is relatively low - ingot aluminum and sponge averaging about $0.35 per valve. The challenge is to convert these raw materials into a finished valve at costs that are reasonable for the automotive industry - about $4 per valve.
Because of TiAl's formability properties, casting seems to be the optimum route for this product. MCT Corp. has invented a novel approach to investment casting TiAl automotive valves. The process uses a countergravity, low-pressure, inert gas melting chamber and the entire cycle from power-on to final casting is fewer than 3 min. The crucibles are coated with graphite to mitigate oxygen pickup and, since the cycle is rapid, carbon pickup is minimized to less than 0.05%. Titanium in a graphite lined crucible is outgassed and the chamber is subsequently backfilled with argon; molten aluminum is poured into the titanium and power is applied. As soon as all the metal is melted, the cover is removed for casting through the countergravity method. This process allows the manufacture of TiAl valves for $1-3.
Metal matrix composites (MMC) are a class of materials that can fill the need for higher strength and lighter weight in automotive, aerospace and other specific markets and provide solutions to a variety of challenging societal applications. Alloys, notably those of aluminum and magnesium, are reinforced with fine ceramic particles, whiskers or fibers to improve their mechanical properties. As long as the ceramic volume fraction added to the matrix is relatively low, the density of the MMC remains unchanged and significant improvements in mechanical properties are attained. Until recently, such improved performance without the penalty of added weight came only at high costs. Moreover, composite materials could not readily be cast to near net shapes because remelting caused degradation of the composite microstructure and subsequently degraded the mechanical properties.
However, Duralcan, San Diego, has developed a ceramic-particle-rein-forced aluminum material suitable for remelting and shape casting with slightly modified conventional aluminum foundry practices. MMCs produced by the process are substantially defect free with consistent and improved mechanical properties, and the strength, modulus, wear resistance and thermal stability are significantly enhanced compared to the unreinforced alloys. The key to this patented process is to cause the molten aluminum to wet the ceramic particles through vigorous mixing so that the two substances are bonded together. This breakthrough in MMC technology has opened the path for gravity casting of foundry ingot, as well as direct chill casting of extrusion billet and rolling slab. One major application for this MMCs is a green sand disc brake rotor weighing about 7 lb less than the cast iron rotor it replaces. Most of the other possible applications involve moving components, in which weight savings from the use of composites results in increased fuel efficiency.
The number of changes the foundry industry has experienced the last decade or so is only a preface to what is ahead. As we look 20 years ahead, we can be certain of some fundamental changes. A billion people will be added to the world in each decade, and most of these will be in the developing countries. Computing power will be 30-50 times cheaper a decade from now, and 1000 times cheaper 20 years hence. The U.S. will spend at least $500 billion per year on environmental and remedial issues, compared to $150 billion today. The major scientific leaps will occur in three areas: information, bioengineering and materials/manufacturing.
In materials and manufacturing, miniaturization and micromachinery will be realities. We will be able to affect and manipulate atomic configurations and material defects that comprise the basic foundation of material properties. In brief, we will see more specific property tailoring as we develop new tools to manipulate atoms.
Akin to Bennis' model of the future manufacturing plant are intelligent processing methodologies (IPM), a class of future technologies that will revolutionize the metalcasting industry. The word "intelligent" in IPM means the system is continuously learning and that there exists a feedback mechanism and a means to have on-line control of the process. The three principal components of IPM are the process model, sensors and control:
* A model of the process provides an understanding and a relationship of the independent and dependent variables.
* Sensors provide on-line information - real-time feedback - regarding critical parameters as dictated by the model.
* A control function maintains quality assurance in the manufacturing process.
The emergence of advanced sensors, coupled with process modeling, artificial intelligence, and expert systems, will bring about new approaches to metalcasting. In the future, it will be the norm to have in place a computer-integrated manufacturing infrastructure providing a single, plant-wide, flexible manufacturing system, with enhanced productivity and product consistency yielding substantially reduced costs. The metalcasting shop of the future will contain a multitude of on-line controls involving full integration of design, procurement, and control of incoming components, manufacture, assembly, handling, packaging and distribution [ILLUSTRATION FOR FIGURE 1 OMITTED].
The use of traditional foundry engineering techniques to develop manufacturing processes has not always yielded optimum processes because of the need to find an economical way to produce the casting. The result is that additional casting costs are incurred, and casting quality, although meeting the demanding specifications, has not achieved its ultimate level. In brief, the level of process engineering and operator skill, rather than on-line process control, has dictated the profitability of foundries. During the next decade, we will see a major transformation of the operational lines of our metalcasting shops. Consistency, reliability and built-in quality at every step of the process will be the norm.