Expanding a Market Through Customer Education
With request for quotes for cast components a shadow of what they once were, O’Fallon Casting implemented a customer education program that grew demand for aluminum investment castings.
Bruce Willson, O'Fallon Casting, O'Fallon, Missouri
(Click here to see the story as it appears in the November issue of Modern Casting.)
A business axiom states that between 70-90% of a product’s cost is the result of design decisions. As companies struggle to manufacture affordable products, the “low hanging fruit” in that equation is to optimize product designs while they are still fluid. It follows then that it is in the best interest for members of a supply chain to assist their customer/engineers in making prudent design choices.
O’Fallon Casting (OFC), O’Fallon, Mo., came to realize that engineers possess an astonishing appetite for technical information. To better address this hunger, the investment casting business began to provide customers with new educational and collaborative services and is being rewarded for the effort.
OFC is a small business that has manufactured aluminum investment castings since 1969. The major benefit from investment casting is derived from its ability to combine multiple pieces into a single near-net-shape structure that reduces the part count of an engineered product. Aluminum investment castings, because the metal is relatively easy to machine, are advantageous mostly by reducing the part count of an assembly.
Although the castings manufactured by OFC can be elegant, Investment Casting Institute statistics indicate aluminum investment castings represent only about 5% of total investment casting sales. Aluminum investment casting remains a small industry in part because the market is niche but also because good applications are poorly understood. In retrospect, the industry has done a somewhat lax job of teaching engineers to identify good opportunities to utilize investment casting capabilities in their product designs.
Over the past decade, OFC has seen substantial growth that has masked a contraction in the size of the overall aluminum investment casting market. This decline in the market is evident in a business metric employed by OFC to track the number of quotations issued for new business opportunities. The long-term quotation data shows a slow, steady, decades-long trend of diminishing quotation activity. In 2010, OFC’s annual quote activity had waned to being less than one-third of what it had been in the early 1980s.
Although multiple factors contributed to this decline in quotation activity, one unmistakable factor is that fewer aluminum investment castings are being designed and a good portion of that lost market is to competition from high speed machining. With fewer aluminum components being designed for the investment casting process, there has also been an accompanying erosion of customer casting design skill and lost sight for opportunities to employ investment castings for the part count reduction.
Rather than accept the situation as the new norm, OFC began to consider ways to counter these trends and assist its customers to better identify casting opportunities and design investment cast products. Design engineers needed to be instructed in these skills so, in 2011, OFC founded what today it refers to as “The O’Fallon Casting University” and its initial offering of an “IC-101” class.
IC-101 is a three-hour class held at a customer facility on the basic principles and considerations of investment casting design. The class is intentionally kept low on promotion, taught from an industry perspective and offered free of charge to OFC customers. The industry standards as published by the Investment Casting Institute make the foundation of the class and are augmented by the lessons learned from years of working to resolve common casting design anomalies. The IC-101 class content continues to evolve based on feedback received from OFC’s customer students.
In the beginning, OFC was uncertain as to the potential demand for its IC-101 class. It began by proposing the class to selected customers and was somewhat disappointed by what appeared to be tepid interest. Not dissuaded, OFC more aggressively marketed the class and advertised the new offering by an email blast.
OFC found it difficult to directly connect with the engineers who would benefit most from the training because they were often insulated from their supply chain. The challenge then became how to best make engineers aware of this opportunity for training. Often times that introduction was facilitated by our customer’s quality engineering or commodity management. Interest in the class grew and demand has grown to the point that it is now teaching IC-101 on a monthly basis, often conducting two or three sessions per visit.
It became clear that IC-101 was addressing a substantial customer need for information. Following a class of 40 engineers, one manager first congratulated and then challenged OFC with a question: “What more can you do to help us be better?”
In 2014, OFC began to offer its customers a free IC-201 class. IC-201 is a three-day class held at OFC that teaches the basics of investment casting manufacturing. Both investment casting classes stress the benefits of early collaborative involvement. Engineers can be more receptive to design suggestions when discussed at the “napkin” stages and before the ink dries. However, a frequently heard comment from IC-101 students is that engineers are under pressure to deliver and generally aren’t afforded the necessary time to linger over a design. After repeatedly hearing that statement, OFC realized if it truly wanted to participate in concurrent engineering activity, it needed to provide customer engineers with timely access to its resources.
OFC chose to refocus its business development activities as collaborative engineering interaction rather than strictly a sales effort. The company hired engineers to act as its internal points of contact so they could not only respond quickly to technical questions but also be proactive. As an example, on receipt of a request for quotation, engineers reach out to customers with an offer of assistance to make the design more robust. Given the communication tools available today, collaborative design with OFC can be accomplished quickly and effectively.
With the necessary engineering resources in place, OFC began to formally promote a free concurrent engineering service to customers and potential customers. Much as OFC discovered with IC-101, it took longer than anticipated for customers to begin to avail themselves of this new service. Today, customer requests for collaborative engineering support are received each day and, as the benefits are so great, OFC believes this service will continue to grow.
Concurrent engineering provides an ancillary benefit. These interactions also advance the design skill of the parties involved.
To provide customers even greater access to technical information, OFC has revised the focus of its website from being a simple sales tool to becoming an engineering resource. Its website now contains a downloadable investment casting design guide and also is populated by a series of blogs that expand on various casting related topics. The design guide and blogs are both frequently updated from feedback received from students of the IC-101 and IC-201 classes. As a result, the OFC website has more than doubled its traffic.
The investment casting design guide is based upon the lessons being taught in IC-101. As with IC-101 and IC-201, the purpose of the design guide is to inform and not promote. OFC attempts to stay “industry neutral” so the core of the guide is based upon industry standards. It encourages customer engineers to consult with a metalcaster to determine if there are any cost or manufacturability ramifications if they are considering a requirement to be better than the industry standard. A metalcaster might also be able to suggest an alternative approach.
OFC provides its education and collaborative services without cost to its customers and without the expectation of a quid pro quo. OFC customers are enhancing their casting depth of knowledge, and the affordability of their casting designs has improved as a result of these efforts. When customers are satisfied by their casting designs, they will be inclined to design more of them. In the long run, better casting designs will benefit the customer, OFC and the metalcasting industry as a whole.
As it has engaged with customers with its educational and collaborative initiatives, OFC has been rewarded by its first sustained increase in new business quotation activity in 30 years, nearly doubling that of five years ago, to levels the company has not experienced since the mid-1990s.
Castings represent incredible value and will continue to maintain a significant place in the manufacturing world, even as new competitive processes, such as high speed machining and more recently additive manufacturing, continue to evolve. OFC has helped grow a small industry by educating its customers to make good design choices. The industry’s best interest is to find new ways to assist its customers to design high quality, affordable products.