Is Branching Out The Right Move?
Pouring metal and producing defect-free castings that satisfy customers takes plenty of time and isn’t easy. It requires a strong team of experienced workers who know the ins and outs of the art and science that is metalcasting. A dedicated sales and marketing team is also crucial to spread the word about a company’s capabilities and advantages.
But for many facilities, metalcasting isn’t the only part of their business. Whether it’s something a company has been doing for generations or a recent addition to the portfolio, offering secondary operations such as machining, welding or coating can be a great opportunity for new business while presenting multiple challenges at the same time.
Whether it’s worth doing is something metalcasters have to weigh when deciding if they should add other offerings to their customers.
Janis Herschkowitz, president of AFS Corporate Member PRL Inc., suggests companies pondering additional services perform a “strong conservative” payback analysis where metalcasters write all the additional revenue they would generate, offset by incremental labor and other costs to determine what the facility could derive from the investment. And her advice should carry weight, since PRL Inc. owns and oversees four separate facilities near its Cornwall, Pennsylvania, corporate offices: the Regal Cast ferrous foundry; PRL Industries Inc., a facility that performs non-destructive evaluation; and LTC Inc., which includes one machining plant that works on parts up to 10,000 lbs. and another that makes use of CNC technology for machining and assembly of high-tolerance components up to 2,000 lbs.
“Make sure you have the sales to support the change,” Herschkowitz said. “Make sure you have access to qualified people who can implement the changes, including managers who understand the industry. You’re competing against people that have been doing it for many years.”
Herschkowitz brings up multiple pertinent points about the addition of secondary operations. There are benefits, but also challenges.
“If you’re going into machining, your management team has to be as strong as anybody who’s been in the machining business for many years,” she said. “You have to make sure you have the skilled labor to support it, as well as the sales. You have to make sure you have access to the skilled labor and have the training facilities to support it.”
It’s been well-documented that metalcasting and manufacturing as a whole are struggling to fill open positions. Though that’s partly a byproduct of the strong economy and lack of people who are out of work, it presents challenges for foundries. And when a foundry decides to diversify, that challenge is amplified.
Gwen Krenecki of AFS Corporate Member Lodi Iron Works (Lodi, California) knows this well. In 2010, the gray and ductile iron caster added a CNC mill and brought machining in-house after providing fully machined components to its customers already through relationships with other machine shops. Then in 2014, the shop expanded to accommodate machining blanks, and it recently added welding.
Providing what customers need in all parts of the business, requires competent employees. Krenecki was direct when describing what that means to her company, saying building a staff is a challenge.
Lodi, Krenecki said, has done some cross-training over the years. The company has a CNC grinder and at first it was operated by machine shop staff, but now it is operated by somebody who used to work in the foundry.
“It’s all about the people you have in place,” she said.
Brennen Weigel, president and CEO of AFS Corporate Member Fall River Foundry (Fall River, Wisconsin) echoes that. His company has been providing secondary operations since the 1980s when it purchased a machine shop in Milwaukee. The amount of castings that needed to be machined jumped in the 2000s to near 80%, and in 2015 the company decided to bring the machining operation to Fall River.
Though there were some obstacles to overcome with the move, a challenge Fall River continues to face is staffing. That’s helped somewhat by being in south central Wisconsin which provides a large area for workers, but the problem still exists.
“The biggest challenge we have right now is, as anybody has, is just finding good quality help,” Weigel said.
Fall River, Weigel said, has an experienced corps of workers. In the foundry, seniority is routinely in the 12-13 year range with many who have worked there at least 25 years. The leadership (Weigel, foundry superintendent, foundry foreman, machine shop manager, vice president of manufacturing) have been together for numerous years, bringing an understanding of the quality customers expect.
And that requires people on the floor who know what they’re doing and perhaps versatile as well.
Weigel said, if there’s overtime required and there’s extra help in the metalcasting operation, foundry employees are encouraged to learn how to work some machining centers. The company keeps a list of people who are interested in working in the machine shop, and they will go work with operators and train with supervisors and get an understanding of what’s required.
“They’re not (transferable),” Weigel said of the skills. “As far as the skillset coming from a foundry into the machine shop, it’s a completely different atmosphere.”
The preference, however, isn’t to cross-train.
“What we’re looking at when we’re hiring is, we’re looking for machine operators or we’re looking for foundry personnel for a specific duty in the foundry,” Weigel said.
Herschkowitz said she believes in cross-training but it has to be done carefully. The criteria, Herschkowitz said, are an interest, ability and passion for developing multiple skillsets.
“We try to find the one person who is very good at what they do,” Herschkowitz said.
Quality, demand and benefits
When a company enters a new arena, it’s not enough just to say they’re in a new arena. They have to be good at what they do, or else they will be beaten in the open market.
“You’re competing against businesses that have been around a lot of years that are specialists in that niche,” Herschkowitz said.
Remembering the niche is key for Fall River and Weigel.
“Every foundry’s got one. We’re a brass foundry and we deal with the water meter industry. That’s our forte. We dabble in some aluminum and some other nonferrous, but what we do is led-free brass plumbing goods,” Weigel said. “Water meters are the main component. That’s what we really focus on. Then we focus on what our customers require. When I’m looking at other foundries – what do they do, what are they good at, and how can we capitalize and add more value to what they’re doing for their customers?
“My whole philosophy is, how can I make the casting purchase for my customer the easiest possible and add value to that part, to make everybody’s life easier?”
That means relying on a fundamental truth for all businesses: listening to the customers. If enough want machining or other added services, then maybe it’s worth exploring.
For Lodi, it has been worthwhile. The diversity has added new customers, and they’ve seen new casting business come in through the machining, and vice versa
“Survey your customers,” Krenecki said. “Ask them if that’s something they’re interested in. They might even work with you to help you know what direction to go.”
Click here to see this story as it appears in the August 2018 issue of Modern Casting