Part Buyers Authority Issue #4

19 Visit partbuyersauthority.com to SUBSCRIBE o r CONTRIBUTE as an author. accommodate every part a foundry produces. Therefore, labor still ends up being the number 1 driving force for lead times. LOSS OF METALCASTERS It is no secret that overseas manufacturers have done a great deal of damage to the domestic manufacturing market. In the early 2000’s when many customers were faced with re-tooling overseas as a means to remain competitive, the vast majority of domestic foundries were left with huge voids in their backlog. Many couldn’t replace the lost work and shut their doors. Some were sold to holding companies and remained profitable, but many were closed due to a shift from customers’ satisfaction to shareholders’ and as a result service declined, prices increased, customers left, and profits fell. Conglomerate foundries were consolidated, or divisions closed due to lack of profitability or changes in business models. Multibillion-dollar companies purchased foundries to produce their products by controlling pricing and lead times. The great recession of 2008 also claimed many domestic foundries. Even after all of the events of the last 20 years, there were those that clung to life as best they could but lost out in the end due to lack of labor, increased labor costs, raw material increases, or inability to remain competitive without replacing aging (or investing) in new equipment. Taking all the above into consideration, the cost of building new foundries and government regulations imposed on the industry – new facilities are not considered a good investment. Within the past few years, customers looking to return to the US for their castings, developing new product lines, or trying to relocate their parts, are finding it difficult to find a foundry that fits Contact: MELANIE JOHNSON [email protected] their needs, is competitive, and has capacity. NEWMANAGEMENT New management always presents new ideas regarding how production should be completed, or even a complete overhaul of the business model. In any case, this is always a very hard time of adjustment for both the foundry and the customer. It’s not all doom and gloom as there are many foundries making investments in new equipment to increase capacity. This is a huge undertaking that can take up to a year to see real results. The market is booming right now which can change tomorrow, so making the decision to invest takes some serious thought and time. Buyers will remain loyal to a foundry who has provided them with quality parts. They will weather the storm until it passes or for as long as possible and that is a true partnership. For those who cannot, moving a part to another foundry is a monumental task. Whether it be a new product or existing, below are some tips to help make the transition a little smoother. 1. If you have a beautifully designed new part that you poured your heart and soul into developing, please do not be offended if a foundry requires changes in order to produce it. The foundry experts are not trying to impugn your work, but instead provide you with information to reduce thecost of the product, or simply that the design is not conducive to casting. 2. If you are re-locating an existing part and want to move the tooling, pleaseprovide the tooling description in your RFQ. Sometimes a buyer will not want to alert their supplier that they are shopping but it is nearly impossible to guess what the equipment is and therefore, the quote may be contingent on whether they guessed correctly. The tooling may also be in poor condition and need to be replaced. After reviewing the current equipment, the new foundry may have a more efficient way to produce your part resulting in a significant reduction of your piece price. 3. Please remember that when relocating older equipment, you will receive a product of the tool. Many times, small “tweaks” made to the parts over the years have not been updated in the drawing. If samples are submitted from current tooling and compared to the drawing for approval, there is a high probability of discrepancies. 4. Keep in mind that not all metalcasters are the same. Your part may not be the best fit for one but ideal for another. If you’re shopping new foundries, get a few quotes to determine the market value of your part. It does help to discuss the issues that lead you to relocating your work with prospective foundries. Do they face the same issues as your current supplier? What do they do differently? Is this part well within their capabilities? 5. Determine what pricing really means to you. Can you sacrifice lead time, quality and service to save $.10? There’s a lot of work in finding the perfect fit and with the ever- increasing workload buyers endure, it has become nearly impossible to be as diligent as I’m sure most would like to be. This is where I fit in these days. I will not pretend to know everything about every foundry, but I do work with some of the best and can help my customers determine what molding process is optimal for their needs, and who will be the most competitive.