Watch the Pendulum Swing

The Annual Modern Casting Census of World Casting Production is one of our favorite projects each year.  Published in December, this feature (p. 21) provides a snapshot of the state of metalcasting globally. It is a one-of-a-kind feature that is much-relied upon throughout the industry.

This year, while reviewing the data, I was struck by the different perspective with which the North American metalcasting industry approaches the global market compared to five years ago.  A significant shift has occurred that few, if any, saw coming. This has brought a renewed energy to North American metalcasting.

“Manufacturing cost competitiveness around the world has changed dramatically over the past decade…so dramatically that many old perceptions of low-cost and high-cost nations no longer hold…Mexico now has lower average manufacturing costs than China…China’s manufacturing-cost advantage over the U.S. has shrunk to less than 5%. Costs in Eastern European nations are at parity or above costs in the U.S.”

This quote is from the report, Global Manufacturing Cost Competiveness Index, released by the Boston Consulting Group in April of this year. While it is about general manufacturing, these ideas resonate within our niche of casting manufacturing.

GE announced in November plans to invest $60 million into its recently acquired Lufkin, Texas, casting facility to expand and modernize the ductile and gray iron plant to create a simplified production flow, improve employee working conditions and provide customers with improved quality and delivery.  The plan is to add 72,000 sq. ft. of new casting space while refurbishing the remaining plant space. According to GE, “The goal is to make the facility as efficient as possible and help strengthen the competitive position of our business around the world.”

In the last 30 years, GE has been one of the leaders of the global sourcing movement, shipping many of its castings to suppliers across the globe. The shift across many of the GE manufacturing divisions to re-invest in North American manufacturing says that the pendulum has swung back to some extent.

The reasons cited in the report for the shift include:

  • Energy costs.
  • Currency value.
  • Productivity.
  • Wage rates.

While this information is positive as you look to the future, the success of your casting facility still depends as much on the decisions you and your management team make as on macroeconomic factors. Your casting facility must focus on what it can control—marketing, HR, production efficiencies, environmental and worker safety initiatives, to name a few—to be successful, because if those departments function at a world-class level, your casting facility can as well.

Can Sand Be Reclaimed for Use in Fracking?

With so much work being done to prove and establish beneficial uses of used metalcasting sand, you might have wondered if reclaimed sand could be used in the fracking industry. 

The question was recently posed to a member of the AFS technical department, who asked for input from a few sand experts. According to them, the sand needed for fracking has very specific properties that are too costly to replicate and verify with reclaimed sand—particularly when virgin sand still is readily available at a lower cost.  

“Frac fluids are formulated to have very specific rheological properties. Extremely large volumes of proppant (up to 10 MM lbs.) with very consistent physical and chemical properties are required to frac even one well,” said Dave Jablonski, Badger Mining Corp. “It would be difficult and expensive to get a large enough volume of reclaimed sand with uniform properties to a well site for potential use.

“Due to the high cost of the reclaimed sand at the well site, it wouldn’t even be worthwhile to use it for part of the proppant requirement as virgin sand would be less expensive and have more consistent properties. Engineers would be unwilling to adjust formulas site by site to accommodate the use of whatever reclaim sand was available to them. There would simply be no advantage to reclaim sand.” 

In the future, some periphery uses for reclaimed sand in fracking might be found, but presently, it is not cost or technically feasible.

What's Old Is New Again

In this issue of Modern Casting, the focus is on plant engineering—ways to upgrade, remodel, expand and advance your metalcasting facility.  Through four features, this issue examines a new steel casting facility in Omaha, rejuvenated facility Brillion Iron Works, trends in facility upgrades and a redefinition of investment priorities for metalcasters. As always, the goal is to provide you some food for thought as you evaluate your facility for ways to push forward.

My food for thought for this issue came when Senior Editor Shannon Wetzel and I visited Brillion Iron Works a few months ago for the story, “Brillion Iron Works Rejuvenation,” on p. 26. My first visit to Brillion more than 10 years ago occurred on a bitterly cold winter morning for which Northern Wisconsin is famous. While the facility was large with vast capabilities, it appeared as if its best times were a thing of the past.

“Brillion had tired equipment, an ineffective layout and a challenged operation,” Rick Dauch, president and CEO of Brillion’s parent Accuride, said this year.

When the industry was whispering that Brillion was coming alive again, I will admit we were skeptical. The key was to visit the facility firsthand to judge with our own eyes.  And with our first steps into the remodeled entrance and office buildings, the cold winter I experienced before seemed to fade away, replaced by the warmth and excitement of new beginnings.

“The last two to three years, we have been working to diligently fix the business.  And the culture of the management team has been to invest to make sure the technology is right,” said Brillion President Dave Adams.

The turnaround strategy has included applying lean manufacturing principles that improve financial performance, replacing tired equipment, enhancing communication with the workforce, and reevaluating the cost and pricing structure. Sounds like a straight-forward plan, but then consider the new management team at Brillion is trying to enact these changes at an 80-year-old facility that also happens to be one of the largest single-plant casting operations in the U.S.

The results show the new Brillion management team is on to something. The improvements at the facility have reduced the plant’s breakeven point in sales by 30%, a monumental achievement for a 140,000-ton-capacity metalcaster. Lead times also have been improved by more than 30%.

 “Managing for maturity … means moving beyond investing in equipment for capacity and growth. Instead, we need to focus on investing to shrink cost structures and boost competitiveness via improved quality and short lead times,” writes TDC Consulting’s Dan Marcus, an expert on turnarounds in metalcasting, in the feature, “ROI for the 21st Century,” on p. 34.

For Brillion, the focus is on costs, quality, lead times and profitability—with dramatic improvements in the first three, resulting in growth of the fourth. For this metalcaster, the turnaround does appear to be “transformational.”

It’s the Sum of the Data

You can’t judge a book by its cover.

We have all heard this adage hundreds of times. You look at the appearance of a person and make judgments about who they are, what they are and what they believe. Even though we all resist, it is hard not to fall in this trap.

The same trap exists within our metalcasting industry. We will hear about the type of casting operation (green sand automotive, ductile iron pipe, etc.) and we will assume we know most everything about it. But, if we take the time to dig a little deeper, we often will uncover information and nuggets of wisdom we never considered.

Take a look at our feature, “Knowledge Management Using Digital Dashboards,” on p. 40. Iron pipe producers often are viewed as “specialty” casting producers, not relatable to your typical job shop. But as this article digs a little deeper into developments at Atlantic States Cast Iron Pipe in Phillipsburg, N.J., it discusses the plant’s adoption and implementation of a knowledge management system that has redefined the operation and decision-making processes.

“Actual costs by tons for each cost center is a tremendous tool that gives our managers and fellow workers live information they can use to make real-time decisions on purchases and projects,” said Dan Fittro, Plant Manager.

“Atlantic States has become a ‘knowledge management’ driven foundry,” said Dale Schmelzle, general manager and senior vice president.

Every metalcaster knows the struggles involved with fully understanding your costs. But, every metalcaster also knows that once those costs are understood, business success can follow. Atlantic States Cast Iron Pipe is another example of this theory in action and shows metalcasters of all types and sizes the benefit to consistent and comprehensive data collection and analysis.

The adage at the start of this editorial has kept me awake recently because my 16-year-old daughter, Alyssa, is in the early stages of preparing her resume for prospective colleges. Like many high school juniors, she must find a way to come out from behind the cover of her book—her GPA and ACT (or SAT) scores that appear to still define who a student is.

The key is going to be her ability to present herself as a total package—a sum of all the data. From her community involvement and accomplishments to her athletic success to her current job and career aspirations, Alyssa has developed an impressive resume. Let’s hope she opens the eyes of college admissions counselors in the same way that Atlantic States Cast Iron Pipe opened the eyes of the industry to the fact that it is more than the cover of its book suggests.

Managing Human Capital

In this issue of Modern Casting, the main feature focus is melting and pouring. When most people think of metalcasting, the first thought usually is of molten metal. It is the blood that brings life to every casting operation. The three features in this issue that focus on the heart of every casting production will provide your facility with potential opportunities for improvement and advancement.

But to accompany this issue’s focus on melting and pouring, Modern Casting also dives into the brains of the metalcasting operation in the profile article, “Employee Engagement,” about Lethbridge Iron Works, Lethbridge, Alberta, Canada, on p. 22. “The brains” being the people.

Whenever I visit metalcasting facilities, one of the regular comments made by management will be that their people are their greatest asset. It is a great phrase and one that if practiced is a powerful tool. But the reality is that some of the facilities that use this phrase perceive their people similarly to the melting and pouring equipment in their facilities—as tools used to produce castings.

At Lethbridge, this same perception may have been the case until a few years ago.

“We had to ramp up our hiring practice from lots of screening to hiring anyone with a heartbeat,” said John Davies, president, Lethbridge Iron Works, when talking about his facility during production ramp ups in 2007 and 2011. “We did what we had to do to meet our customers’ needs, but it didn’t meet our bottom line very well to have people who were not well trained, not showing up andwithout much interest.”

After the last growth spurt in 2010-11, the management team at Lethbridge decided a turnaround in its approach to securing and engaging human capital was necessary. From the interview and hiring process to training to reviews to the distribution of production and profitability information, Lethbridge redeveloped the entire human resources system. This turnaround went as far as bringing in a corporate coach in 2012 to further enhance employee engagement.

“We have seen our profitability go up,” said Davies. “Employees are key to business success these days. It starts at the top and must filter down to the shop floor.”

The results for Lethbridge from a production perspective include lower reject rates and increased on-time deliveries. In addition, profitability is up. All while following through on phase two of an expansion that is re-engineering its molding, coremaking and melting.

Managing human resources is a challenge in the best of environments. In a metalcasting facility, this skill requires the same attention to detail as required on the melt deck to ensure production stays on track. Make sure you review the recommendations presented in all our features this issue. Both your mind and your heart will thank you.

Castings Equip Amazing Work in Chile

Metalcaster, Supplier to Metalcasters

Astronomers from all over the world share resources in the Atacama desert of Chile, the driest place on the planet. Its lack of airborne water vapor is among the factors that make this region one of the best places for telescopes to view the night sky, and it is home to many of them. VLT

MUSE instrumentation on the Very Large Telescope The technology employed by the European Southern Observatory at Paranal is under continuous development. A telescope dubbed the VLT (for “very large”) uses cryogenics, lasers and other specialized equipment to enable unprecedented feats of astronomy.

New metal castings on the VLT include two 3D print-enabled components. Using a printed thermoplastic pattern, German firm voxeljet AG produced a complex, investment cast sensor arm for use with the telescope’s MUSE instrumentation. Metalcaster ACTech GmbH investment cast a ductile iron “spacer” component using a laser sintered pattern.A team of astronomers prepares to begin MUSE Science Verification observations as the new instrumentation debuts.

The MUSE instrumentation is on its second generation, recently installed on the VLT, which has now undergone a series of successful tests performed to ensure its operation. "It enables us to see a greater field, allowing the study of multiple objects at one time," explained Cristian Esparza, VLT telescope and instrument operator. The culmination of approximately 10 years of research and development, MUSE exponentially increases the VLT users' ability to study everything from black holes to entire galaxies.

Check out the view from the VLT site in this video.
The VLT is moved into position as the night’s work begins.

Answers May Be Simple, But Execution Is Key

I lost my keys last month.

We all have done it. In this case, these lost keys required all five of my family members and an hour and 45 minutes to find them.

During my all-out, turn-everything-upside-down search of our house, garage and cars, I kept saying to myself, the simplest answer probably is the correct one. For me, the simplest answer would have been that the keys were left in my car. So, we searched every crack and crevice of my car at least five times. But it took one final gasp of frustration during the last search of the car for me to take a step back, stare in the distance for some clarity (across the roof of my SUV), and see my keys resting on the roof.

This story relates to our feature, “Success Strategies for Job Shops,” on p. 34. This article contains the opinion of a veteran casting buyer who worked in a metalcasting facility in a previous life. The buyer is sharing his opinion on what metalcasters must do to solidify their business and weather the ups and downs of the economy.

Yes, you have read similar articles and heard similar presentations in the past. While this article doesn’t break any new ground on the subject, Modern Casting has selected this article because the message is still important. If your business doesn’t execute on the fundamentals, it is difficult to build a foundation for success.

Here is a list of the six points raised by the casting buyer:

  • Serve different market segments and diversify your customer base
  • Produce well-balanced product mix and never lose contact to market reality
  • Know your production costs
  • Permanently optimize processes in the shop
  • It is all about sales
  • Train and educate your people

While you can look at your costing system and say it is an accurate reflection of your operation, the best evaluations often come when you examine other successful businesses and their best practices. Maybe this is a metalcaster you compete against or maybe it is a manufacturer in another industry that received positive press for its implementation of a new quotation system. Constantly seeking out these case studies of success and comparing them to your own systems (no matter how efficient you might be) ensures you are running at peak efficiency.

The core of your business is the fundamentals. Execution of these fundamentals is at the heart of success.  Read the thoughts of this casting buyer and truly examine how your facility stacks up.

When I came home from work that evening on the day I lost my keys, my 11-year-old daughter Abigail smiled at me and said, “Remember, the simplest answer probably is the correct one.”  I will continue to remind myself of this and hopefully you will to.

6 in 10 Teachers Choose Welding

A recent poll asked 220 vocational and technical high school teachers the following question:

“Thinking about vocational courses, please tell us how likely you feel a student focusing on each of the following career paths would be able to find a job or a career in that field after graduation.”

These teachers were given five different industries from which to choose:

•    Metalcasting
•    Woodworking
•    Machining
•    Tool, die and patternmaking
•    Welding

Table1Take a look at the results in Table 1. Based on some simple math, 59.5% of the teachers surveyed believe it is “very likely” a student focusing on welding in high school will find a job or career after graduation while only 19.1% believe the same of metalcasting.

The results of this poll were a bit of a wake-up call to me. Sure, I knew metalcasting isn’t on the top priority list of today’s manufacturing technology and/or votech teachers. But I saw this as a larger problem for all manufacturing disciplines in which we were all in the same boat. This data says we aren’t all in the same boat; some of our industries are sinking faster than others.

Another surprising result is that machining didn’t place highest among these industries.  I have had the opportunity to see several high school and college workshops decked out with some of the latest machining systems (enough to make many manufacturers jealous) and teachers beaming about the opportunities for jobs as machinists. These must be more isolated cases than I experienced.

On a positive note, this poll isn’t talking about the students themselves or their parents.  However, this poll is talking about one of the biggest influences on students—their teacher.  Couple the feelings of these teachers with those of the school guidance counselors (who, if we poll, would probably express similar opinions as the teachers), and our industry has an uphill battle in securing the next generation of metalcasters.

But it is a battle worth the effort. While our industry is fighting fires on many different fronts—regulations, globalization, customer knowledge and experience, pricing pressures, and competing processes, just to name a few—engaging the next generation of workers is an endeavor that rewards you as much as it does the industry. Just remember, it isn’t just the students we need to focus on. We have to win the hearts and minds of their teachers and their guidance counselors as well.

If you have any comments about this editorial or any other item that appears in Modern Casting, email me at aspada@afsinc.org.

Columbus CEO Helps U.S. Reshoring Effort

In November 2013, Columbus Castings, Columbus, Ohio, reached a major business agreement with Nippon Sharyo USA Inc., Arlington Heights, Ill., for steel Amtrak railcar undercarriages. For Columbus CEO and President Rick Ruebusch, it was an unquestionable highlight of his two years at the helm of the steel casting facility.

As reported by Columbus Business First, the contract could be worth as much as $70 million. If Nippon Sharyo exercises all options in the contract, the green sand facility is scheduled to be at full capacity through 2021. With that kind of success, Ruebusch has good reason to be optimistic, about both his business and the American metalcasting industry in general.

“The renaissance of manufacturing in the U.S. is underway,” Ruebusch said. “We [at Columbus Castings] are well positioned to once again be the point of the spear for this and look forward to the rapid recovery of the nation’s manufacturing base.”

According to industry statistics, approximately 100,000 manufacturing jobs have been reshored by about 500 OEMs and thousands of their suppliers since the manufacturing employment low of January 2010. Owned by Protostar Partners LLC, New York, and formerly known as Buckeye Steel Castings Co., Columbus Castings will add approximately 50 full-time metalcasting jobs to its current 650-employee workforce as a result of the recent Nippon Sharyo deal.

Earning an engineering degree from The Ohio State Univ., Columbus, Ohio, Ruebusch worked as an engineer at GE Aviation, Cincinnati, and gained positions of increasing responsibility at Precision Castparts Corp., Portland, Ore., and SPX Corp., Charlotte, N.C. With his career spanning more than a decade in metalcasting, he is plenty familiar with the industry and what advantages American firms can offer.

“We are closer to customers, which lessens transportation costs, and allows for more visibility and stronger relationships,” Ruebusch said. “The skilled labor is here, and the workforce is hungry for it.”

Considering a number of worldwide economic factors, including steadily increasing labor costs in developing economies, U.S.-based metalcasters can provide benefits not available to overseas suppliers. Ruebusch, after signing the biggest contract in his company’s 110-year history, expects the future to be bright.

“This award is the single-largest order to date in the long history of Buckeye/Columbus Castings, continuing the forward momentum of our organization,” he said. 

Keep It Public

The annual casting competition is a showcase for the latest and greatest. And this year’s winner, the oil pan for John Deere cast by Aarrowcast, Inc., Shawano, Wis., is no exception. By incorporating multiple components to increase performance and reduce cost, this cast component is another shining example of what can be accomplished when the casting designer and metalcaster work together to secure a solution.

And that really is the story with this oil pan casting. Both John Deere and Aarrowcast brought their expertise to the table during the product development process to solve design, production and quality issues.  Even though the process required a couple years and several iterations to achieve a final component, the result validates their efforts and has opened the door to a new line of thinking at Aarrowcast. 

“This part took us out of our comfort zone, and as a result, we’ve changed our entire system to work with our customer up front to ensure success at launch,” said Aarrowcast engineering manager Jim Olson.

In today’s casting marketplace, the push for open, up-front communication is critical. Whether this communication is centered around product development or your firm’s capabilities, the reality is that not all casting buyers have read the headlines and realize the offshore sourcing movement isn’t as perfect as everyone once thought.

“U.S. metalcasters have a lot of catching up to do.”

“U.S. metalcasters have to improve to compete with plants in China, India and Mexico.”

While these two phrases aren’t exact quotes, they are paraphrases of a discussion I recently had with a group of experienced casting buyers.  These buyers said they want to purchase in the U.S. but they just weren’t able to find suppliers offering the total package (price, technology and/or capabilities) they can find in these other countries. Even though these buyers require smaller runs of many different materials and sizes, global sourcing is an attractive option. 

In the last few years, manufacturing in the U.S. and North America has seen a resurgence in both production and reputation. Within metalcasting, we have seen a customer base refocus on regionalized sourcing, reshoring castings with regularity back from the low-cost sources that dominated headlines less than five years ago.  The conversations appeared to have turned from casting price to total cost of acquisition, so costs like defects, shipping and engineering time were being factored into the final decision.

But not all buyers have realized the benefits of working closely with your casting manufacturer like John Deere did with Aarrowcast.  Some buyers still require convincing.  Maybe it is time for your facility to do what Aarrowcast has done and publicly proclaim that your firm is working up-front with customers to offer assistance with casting design for manufacturing.  While some of you do offer this service already, what could hurt to scream it from the mountaintops of your website, business cards and letterhead?  We must continue to reshape the minds of current and potential customers one at a time.

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