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.
ncountering a scenario in which you are forced to suddenly and immediately suspend melting operations for an extended period can be a death sentence for many metalcasting facilities. Small to mid-size businesses are the backbone of the industry, but many do not survive when forced into extended downtime. One disaster-stricken metalcaster, however, found resilience through its own perseverance and a circle of support from peers, friends, suppliers, teams from installation and repair providers, an original equipment manufacturer and even competitors.
Tonkawa Foundry, a third-generation, family-owned operation in Tonkawa, Okla., was entering its 65th year of operation this year when a significant technical failure ravaged the power supply and melting furnaces on January 17. Thanks to the textbook evacuation directed by Operations Manager Carrie Haley, no one was physically harmed during the incident, but the extent of emotional and financial damage, and just how long the event would take Tonkawa offline, was unclear.
Tonkawa’s power supply and two steel-shell furnaces would have to be rebuilt. No part of the reconstruction process could begin until the insurance company approved removal of the equipment from the site. The potential loss of Tonkawa’s employees and customers to competing metalcasters seemed inevitable.
Within two days of the incident, repair, installation and equipment representatives were on site at Tonkawa to survey the damage. Once the insurance company issued approval to begin work, the installation team mobilized within 24 hours to remove the equipment and disassemble the melt deck.
Since the damaged equipment was installed in the 1980s and 1990s, Tonkawa and an equipment services and repair company quickly strategized a plan and identified ways to enhance the safety, efficiency and overall productivity of Tonkawa’s melt deck.
“The most critical issue was for our team to organize a response plan,” said Steve Otto, executive vice president for EMSCO’s New Jersey Installation Division. “We needed to arrive at Tonkawa ready to work as soon as possible and deliver quickly and thoroughly so they could get back to the business of melting and producing castings, and minimize their risk of closing.”
Several years after Tonkawa’s melt deck was originally installed, an elevation change was required to accommodate the use of a larger capacity ladle under the spout of the furnaces. Rather than raising the entire melt deck, only the area supporting the furnaces was elevated. As a result, the power supply and workstation were two steps down from the furnaces, creating a number of inconveniences and challenges that impacted overall work flow in the melt area. Additionally, the proximity of the power supply to the furnaces not only contributed to the limited workspace, but also increased the odds of the power supply facing damage.
The damage to the melt deck required it to be reconstructed. It was determined to be the ideal opportunity to raise the entire deck to the same elevation and arrange the power supply, workstation and furnaces onto one level. The furnace installation company provided the layout concepts, and with the aid of Rajesh Krishnamurthy, applications engineer, Oklahoma State Univ., Tonkawa used the concepts to generate blueprints for the new deck construction. The results yielded a modernized melt system with an even elevation, strategically placed power supply, enhanced worker safety and increased operator productivity.
“Eliminating the steps and relocating the power supply farther from the furnaces was a significant improvement to our melt deck,” Tonkawa Co-Owner Jim Salisbury said.
Within four days of insurance company approval, all damaged equipment had been removed and shipped for repair.
The insurance company required an autopsy on the damaged furnace before any repair work could begin. The forensic analysis was hosted by EMSCO in Anniston, Ala., in the presence of insurance company personnel, as well as an assembly of industry representatives from the companies who had received notices of potential subrogation from the insurance company.
Tonkawa’s furnace was completely disassembled while the insurance company’s forensic inspector directed, photographed, cataloged and analyzed every turn of every bolt on the furnace over a nine-hour workday. The coil was dissected, and lining samples were retained for future reference.
While the furnace sustained extensive damage, it did not have to be replaced entirely.
Structural reconstruction was performed to address run-out damage in the bottom of the furnace, a new coil was fabricated and the hydraulic cylinders were repacked and resealed. Fortunately, the major components were salvageable, and ultimately, the furnace was rebuilt for half the cost of a new furnace.
“The furnace experienced a significant technical failure,” said Jimmy Horton, vice president and general manager of southern operations, EMSCO. “However, not only was the unit rebuilt, it was rebuilt using minimal replacement parts.”
Though work was underway on the furnaces, Tonkawa was challenged with a projected lead time of 14 weeks on the power supply.
When accounting for the three weeks lost to insurance company holds and the time required for installation, Tonkawa was looking at a total production loss of 18-20 weeks. From the perspective of sibling co-owners Sandy Salisbury Linton and Jim Salisbury, Tonkawa could not survive such a long period of lost productivity. After putting their heads together with their furnace supplier, it was determined the reason for the long turnaround on the power supply could be traced to the manufacturer of the steel cabinet that housed the power supply.
The solution? The existing cabinet would be completely refurbished and Tonkawa would do the work rather than the initial manufacturer. This reduced the 14-week lead time to just five weeks.
Tonkawa is the single source for a number of its customers. Although lead-time had been significantly reduced, the Tonkawa team still needed a strategy to keep the single source customers in business as well as a plan to retain their larger customers.
Tonkawa pours many wear-resistant, high-chrome alloys for the agriculture and shot blast industries. Kansas Castings, Belle Plaine, Kan., which is a friendly competitor, is located 50 miles north of Tonkawa. Kansas Castings offered Tonkawa two to three heats every Friday for as long as it needed.
“We made molds, put them on a flatbed trailer, prayed it wasn’t going to rain in Oklahoma, and drove the molds to Kansas Castings. We were molding, shot blasting, cleaning, grinding and shipping every Friday,” Salisbury Linton said.
Others joined the circle of support that was quickly surrounding the Tonkawa Foundry family.
Modern Investment Casting Corporation (MICC) is located 12 miles east of Tonkawa in Ponca City, Okla. Though MICC is an investment shop and Tonkawa is a sand casting facility, MICC’s relationship with Tonkawa dates back years to when Sandy and Jim’s father, Gene Salisbury, was at the helm.
“Gene was always willing to help you out,” said MICC owner, Dave Cashon. “His advice was invaluable for us over the years, so when the opportunity arose to support Sandy and Jim, we volunteered our help.”
MICC offered to pour anything Tonkawa needed every Friday in its furnace. Tonkawa brought its alloy, furnace hand and molds, while MICC provided its furnace and a furnace hand for three heats. Many of the specialty parts Tonkawa produces were completed with MICC’s support.
When Salisbury Linton approached Cashon and asked him to issue her an invoice to cover the overhead Tonkawa was consuming, Cashon told her if she brought in six-dozen donuts every Friday morning they’d call it even.
“We’re all kind of like family,” Cashon said. “We’re all part of the same industry and though we may be friendly competitors at times, you don’t want to see anybody go through what they’ve gone through and it could have just as easily been our furnace that failed. While we all take the appropriate measures and perform maintenance to prevent these scenarios from occurring, they unfortunately still occur from time to time in our industry.”
Tonkawa had recently added steel work to its menu of services and Central Machine & Tool, Enid, Okla., was able to take Tonkawa’s patterns and fulfill its steel orders so it would not fall behind with those customers, while CFM Corporation, Blackwell, Okla., took three of Tonkawa’s employees on a temporary basis and kept them working during the downtime. Additionally, a couple of Tonkawa’s major suppliers extended their payables terms.
Thanks to Tonkawa’s suppliers, friends and its personnel’s own passion, persistence and dedication, the business is up, running and recovering—placing it among the few shops of its size to overcome the odds and remain in business after facing calamity.
Nearly eight months after that devastating Saturday evening in January, Salisbury Linton reflected on the people and events that helped Tonkawa rise from the ashes. “We certainly would not have the opportunity to see what the future holds for Tonkawa if it weren’t for all the kind-hearted people who cared about what happened to us. Everyone still checks in on us.”