Polishing a Diamond in the Rough
For 34-year-old Zak Schaldonat, general manager at AFS Corporate Member Aluminum Alloys Inc., it took about two seconds to fall in love with the foundry. Previously a manager of an asphalt production plant, Schaldonat had experience running a place but none in metalcasting. He was green, but he was also driven. And the Reading, Pennsylvania-based job shop, which struggled to be profitable and had cycled through 12 managers in 10 years, needed all-in leadership.
“I had kind of reached my potential at the asphalt plant and I saw the opening for the foundry business,” Schaldonat said. “The second I walked in here, it was just awesome. It was everything I wanted and I kind of took it and have been running ever since.”
Aluminum Alloys makes aluminum sand castings for a variety of industries via automated, rotolift, and floor molding processes. It belongs to a group of seven foundries that include JW Miller (Pennsylvania), Kent (Michigan), Monett Metals (Missouri), Gamma Foundries in Toronto, Canada, and Highland Foundry Limited and Highland Foundry International in Vancouver, Canada.
According to Schaldonat, who joined Aluminum Alloys in the spring of 2021, the foundry had an established trend of good quality and a skilled workforce. The key was to build on this by instilling solid work practices and focusing investment dollars into the right places in the foundry.
“The first thing I noticed was the workforce was proud and had a lot of experience,” Schaldonat said. “There’s a good reason why this place was always making quality aluminum castings. So, for me the question was, where to step in? Where was the main difficulty? And it became clear the answer began with capturing our costs accurately. And then along with that, treat people well and listen to them.”
Through the last 18 months at Aluminum Alloys, Schaldonat has spearheaded an overhaul of the costing structure, implemented several processes for activities such as quoting, hazard reporting, and work instructions, and oversaw significant dollars invested back into the plant, which also included pay increases for all employees. The result has been a significant increase in revenue in his first year.
Schaldonat pointed out several times that before he came on, Aluminum Alloys was already a good foundry. His role has been to step in and make decisions.
“We had a great book of business and 30-year customers,” he said. “The knowledge was all here. I didn’t become a master foundryman in 18 months. I just listened.”
Being new to the industry, his first step was to involve himself closely with the activity on the shop floor. This helped him identify the work centers and value stream. He talked often and in depth with the workers to understand their process and what goes into each step.
“The people here have 400 combined years of foundry experience. As well, Aluminum Alloys being one of seven foundries in a group, there were a lot of resources and insight that I grabbed quickly.” Schaldonat said.
Step by step, Schaldonat worked to calculate and update the costs at Aluminum Alloys. The foundry uses a proprietary ERP system for its costing that Schaldonat said works phenomenally—when the inputs are accurate.
“We just took it variable by variable,” he said. “It’s not rocket science; it becomes about how detailed do you want to get?” Schaldonat said he knows there are further nuances in the process that could be tweaked for even more precise estimating. “But that’s not where you start. It’s checkers not chess at this point.”
For many of Aluminum Alloy’s customers, this meant an increase in price. But Schaldonat said most accepted the pricing given the value Aluminum Alloys was providing and the necessity of ensuring a casting source that was reliable.
The more Schaldonat interacted with the seasoned Aluminum Alloy workforce, the more he came to understand their importance in the success of turning around the business. He also saw a glaring disconnect between their value to the company and what they were paid.
“One of the biggest issues we had—and a lot of people here didn’t realize it because they were here for so long—was we weren’t competitive in the market with our wages being too low,” Schaldonat said. Everyone on the payroll saw increases. Schaldonat also implemented profit-based quarterly bonuses. He sees the investment in wages as key to retaining and attracting employees.
For example, Aluminum Alloys has floor molding stations operated by molders with 15 years of experience each. If he wants to add a new molding station, which is under consideration, it’s not likely he’d find comparable talent with 15 years of experience doing just that. Losing a veteran employee means loss in production as well as their valuable knowledge. Replacing them or adding someone new has a cost—not just in new wages but training, as well.
“Word starts to get around locally,” Schaldonat said. “Pay rates are up. No layoffs. Benefits are better. Word gets around.”
In the same vein of valuing employees, Schaldonat immediately placed a higher focus on safety in the foundry, first targeting proper PPE and usage, hazard recognition, and near-miss reporting.
“My mission statement is to safely produce quality castings as efficiently as possible,” he said. “Best-in-class safety is the only option. Our philosophy on safety is that each of our employees must feel safe at work and that all of return home in as good or better condition than how they arrived at work. It must come from the top and you have to continually drive its importance.”
Schaldonat said one of his proudest achievements is Aluminum Alloys’ hazard reporting. For example, an employee told him recently that before, there were certain actions or practices he was doing that he just accepted as fine, but now the employee is beginning to identify and report what is a potential hazard and that the practice should be changed if it is hazardous.”
The capital investments at Aluminum Alloys are also addressing some safety and ergonomic issues. As an example, over $90,000 was spent this year in hoist inspections, repairs, and replacement.
Along with improved costing and a better-compensated workforce, certain building upgrades were needed. Aluminum Alloys made various belt upgrades to its sand reclaimer, made some furnace maintenance improvements, purchased a new spectrometer and floor ladle, and paid for work underground to shore up the shop floor. The foundry’s location is in an area called “Sinking Spring” and it’s called that for a reason, Schaldonat said.
In the near future, Schaldonat has his eye on improving security at the foundry both physically and in cyberspace. This includes perimeter fencing, alarm system, security cameras, and a brand-new server that will help shore up cybersecurity.
“We are ITAR registered, so security across all areas is important.” Schaldonat said.
Finally, a big part of the facility improvements has been site organization—clearing walkways, painting, and attacking eyesores like the yard surrounding the foundry.
“The yard had old pieces of equipment that were here for spare parts,” he said. “We kept what was strictly necessary and got rid read of the rest. Today, the yard is clear of the scrap and employees are consulted on equipment purchases with which they would be working closely.
Finally, Schaldonat has begun to implement basic value-stream processes to drive improved efficiency. Along with a more attuned costing system, this includes making work instructions for every part (this is about 70% completed, Schaldonat said) and creating process sheets for new jobs.
“Process sheets have not been rolled out to the floor as a must-use yet—our work instructions captured in our system are sufficient,” he said. “But our employees are open to it because it jogs their memory and we’re using their input to make them. It takes the burden off them, and it will help with training new employees.”
Diamond in the Rough, Now Polished
Despite Aluminum Alloys’ history of leadership turnover, when Schaldonat took on the job and closely examined what he was in for, he saw a solid foundry with a wealth of experienced workers who needed someone to stick around and make decisions. And he felt support from the six sister foundries in the same group, which offered resources as well as free rein to Schaldonat to implement his ideas—as long as the risk was managed well.
“I know I’m young, but maybe if I was 20 years further in my career, I wouldn’t want to deal with this kind of project or stress.” Schaldonat said.
In the last 18 months, Aluminum Alloys and Schaldonat together have proven their potential; their foundation has been established now for further growth.