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Controlling melt components can lower good casting costs.

Total customer-ready metalcasting yield is in direct proportion to total control of all melt costs.

Operating a foundry in the black is difficult. To survive and prosper, it is axiomatic that foundries know their total cost to produce good castings.

Melting metal can account for up to 50% of energy costs in a typical electric furnace foundry and 30-50% of all processing costs.

To calculate the real cost of metal in good castings, one must isolate each component of those costs and devise a strategy to reduce them. The cost of metal in good castings can be divided into the following major cost components:

* the cost of charge materials, such as the metallics, graphitizers and ferroalloys required to produce the base iron;

* processing costs, including energy, labor, refractories and melting consumables (treatment alloys and inoculants, less a credit for their silicon contribution);

* rework, including unscheduled heat treatments, to meet customer specifications.

The contribution of these cost components to the cost of good castings depends strongly on their interaction with overall yield, expressed as the ratio of the weight of good castings shipped to the total weight of metal melted. The cost of charge materials is virtually unaffected by overall yield because, apart from a small melting loss, one ton of charge materials is required for every ton of good castings sold.

The picture is completely different for processing costs. Their contribution to the cost of good castings is inversely proportional to the overall yield. For example, at an overall yield of 50%, two tons of metal must be melted, treated, inoculated and cast for every ton of good castings produced.

Thus, the processing costs at the spout must be doubled to obtain the cost in good castings.

Selecting a Target

Following simple guidelines based on costs and risks, the ideal reduction targets are those that combine high cost with low risk. High-cost factors yield good potential savings (compare the savings from a 10% cut in consumption of a $100/ton material versus the same cut in a $20/ton material). To achieve savings, however, changes should not risk quality, production, equipment damage or working conditions.

Valid changes reduce high risks to product quality, productivity, equipment and personnel--areas that could result in heavy, often unexpected losses. For example:

* High cost/low risk--charge material selection for gray iron foundries making municipal castings, where lower quality charges usually will not affect acceptable quality.

* High cost/high risk--the selection of poor-quality charge materials for ductile iron castings is not acceptable because of added costs for melt corrections and the risks to quality and resultant liability.

* High risk--furnace refractories, a relatively low cost but important item, risks productivity, quality and personnel.

Select Tools

While all the tools listed in Fig. 1 influence melting costs, only charge materials are discussed here.

Charge materials are a large and continuing problem for foundrymen. For every ton of metal sold as good castings, eventually, more than one ton of new materials must be purchased. Availability and cost of charge materials and the expenses incurred in controlling purchased scrap are part of the equation that make up the production of customer-ready castings at a profit.

Typical Numbers

Figure 2 shows that for ductile iron the cost of charge materials equals almost 60% of the total cost of the metal at the furnace spout. This is correct, but misleading, because no foundry sells metal at the furnace spout, but instead as quality castings.

There are three important cost factors that must be known: charge, processing costs and the overall yield (ratio of the weight of castings sold to weight of metal melted).

Figure 3 shows the distribution of charge and processing costs for the production of ductile iron at the furnace spout and in good castings for two different yields, 65% and 45%. It indicates the importance of yield in influencing the cost of metal shipped.

Charge costs, relative to processing costs, are not as important in determining casting costs as the effect of charge costs on overall yield. Charge materials can have a significant effect on casting quality (high risk).

Using typical foundry cost numbers on a spreadsheet analysis, Fig. 4 shows yield vs. charge and processing costs. Charge costs are constant and independent of overall yield. At a 50% yield, the processing costs are doubled. Increasing the overall yield by 1% will result in cost savings of $4-5/ton at 50% yield up to $10-11/ton at 34% yield. Therefore, an inferior and possibly cheaper charge material that might cause an increase of 3% in the scrap rate (and a subsequent reduction in yield from 50% to 47%) would increase the cost of good castings by $12-15/ton.

To offset this and the added penalties of poorer quality and added rework/inspection, the charge cost should be decreased at least $15-20/ton.

If the charge material being considered formed 100% of the purchased portion of the charge, the material would need to be $15-20/ton cheaper. If the material formed only 50% of the purchased portion, it would need to be $30-40/ton cheaper. When the impact of yield improvement on all foundry costs is considered, the savings for each percent improvement is probably doubled. Thus, the inferior charge material described above would need to be $60-80/ton cheaper before it should be considered.

The top line in Fig. 5 shows that increasing the charge cost by $1/ton to reduce processing costs by $1/ton produces an overall savings in good castings. This can occur by reducing other raw materials that are used (lower sulfur content means less treatment alloys for ductile iron; high carbon content means lower graphite additions).

Processing costs are lowered by having a better, more consistent treatment and lower energy costs. This is independent of yield, but as the yield goes down, the savings in good castings becomes even more pronounced. The other two lines show that increasing charge costs by $2 and $2.50 to produce a $1 decrease in processing costs, moves the break-even point to 50% and 40%, respectively. With increasing reductions in processing costs, the savings in dollars of good castings becomes very favorable at any yield number.

Based on spread sheet analysis, Fig. 6 demonstrates that when the charge cost is a higher percentage of the total metal cost, the overall cost in good castings is less sensitive as overall yield goes down. The three curves are at different charge cost levels with the highest cost being represented by the lowest curve.

Figure 7 highlights some of the factors that deserve consideration when attempting melting cost reductions as they relate to charge materials. Points of interest include:

Creative purchasing--Always consider new materials that add value and reduce processing costs, evaluating their cost and the impact on casting quality and yield.

Nonmetallic content--Many materials, and especially purchased scrap, have dirt, rust, nonmetallic materials (paint and enamel) and other unwanted materials. The percentage of these materials must be considered because of their adverse effect on melt yield and processing costs.

Residuals--These can pose special problems when making ductile iron. They can have undesirable effects on graphite shape and the iron matrix, increase quality control costs, resultant scrap and required rework, and add to overall metal costs.

Risk factor--The risk factor in the production of high-quality castings increases significantly using charge materials with poor quality. Consider purchased foundry returns. They can be a risk-ridden material, since it may be another foundry's rejects for off-chemistry. The material then becomes low cost and high risk.

Least-cost charges--Based on least-cost chemistry, high-quality scrap should be used whenever possible. This means the best use of returns, minimum treatment after melting, low alloy costs and the least metal-related defects. As an example, late carbon additions increase processing time, use more energy to get the carbon into solution and reduce productivity. It is best to hit the carbon target with the original charge. In gray iron production, it means charge materials with the correct ratio of Mn to S for the best control of mechanical properties and machinability.

Process control--To reduce melting costs, especially the percentage of defective castings, process control helps "get it right the first time" instead of controlling quality the expensive way--by inspection. Late additions necessary to trim chemistry may not be recorded as melting costs. Unrecorded, they become inventory shrinkage (losses) at the end of the fiscal year.

Figure 8 shows the charge and processing costs at the furnace spout for an electrically melted ductile iron. The charge cost is $176/ton and the overall cost is $298/ton. This leaves $122/ton for the processing costs divided as shown.

The components of some of these processing costs are detailed in Fig. 9 together with some of the methods used to reduce these costs.

Figure 10 is similar to Fig. 8 except that these values are for good castings (not metal at the spout). It is apparent that the charge cost has increased only slightly due to melting losses. The total metal cost in good castings has increased to $460/ton because, at a yield of 45%, processing costs have more than doubled to $277/ton.

With costs at $80-90/ton, melting energy and consumables are two prime targets for cost reduction, but so is overall yield. Many foundries work to improve yield but few appear to include all processing costs in their metal cost programs, concentrating instead on raw materials.

The examples presented have shown many ways to reduce melting costs where they count in good castings--without risking production or product quality.

The key is to reduce processing costs because they can double savings in the shipped castings. Reducing only charge costs offers little extra savings and can cause considerable risk to casting quality.
COPYRIGHT 1993 American Foundry Society, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
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Author:Warda, Richard D.
Publication:Modern Casting
Date:Jun 1, 1993
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