The inaugural WFO World Foundry Summit attracted senior foundry sector professionals from 17 countries to engage with each other to share best practice to help shape the future of the global industry.
Held in Rome, Italy on 8th and 9th November 2018, the WFO World Foundry Summit enabled senior figures in industry to gather and debate strategy. Opening the event, World Foundry Organization (WFO) president Mark Fenyes FICME explained: “The WFO is undergoing change and evolving – the organisation’s ultimate goal is to be a conduit for information on the foundry industry. We already host successful World Foundry Congresses and WFO Technical Forums [the next WFO Technical Forum is to be held in Slovenia, 18th to 20th September 2019] and now we are bringing a new initiative for us. An invitation-only event to highlight strategic matters rather than technical ones.” He expressed his gratitude to the sponsors who had enabled the WFO to deliver a high quality occasion and he praised the efforts of the speakers for their candid presentations.
Foundry 2025: new challenges due to changing market conditions
Amid an environment of a robust global economy but with rising uncertainty, Dr Buchner of the IKB Bank urged the foundry sector to think for the future. “You have to change your attitude – do not think only in tonnage, change your business model,” he said. Like many others, he agreed that for the foundry sector, that is so reliant on trends in the automotive industry, hybrid solutions are preferred. “Hybrids are the best of all worlds for the foundry industry – they have an engine block. The demands on CO2 reduction targets are of course to have a significant impact on the type of cars produced, which is widely understood to have tremendous consequences for the supply chain.”
Disaster – one year later
Surviving and indeed coming through the other side of a disaster with a positive outcome is often the plotline of movies. However, in the time honoured tradition of “truth is stranger than fiction”, that is exactly what Dotson Iron Castings achieved in 2017, when the company refused to be defined by the possible disastrous consequences of a fire in the foundry that totally destroyed the moulding line and sand distribution system. Speaking from the heart and with an abundance of experience, president and CEO Jean Bye gave a blow by blow account of a weekend that unfolded like your average nightmare – fire, emergency response, lockdown, loss of power, investigation, disaster control, mitigation of effects, reassurance to employees, customers, suppliers and community, teamwork, and rebuilding.
“Disasters can be devastating but they can provide positive outcomes,” she told a wide-eyed audience.”
Thankfully, the priority of ensuring people were safe ensured that there were no injuries. However, she recalled how it took six fire departments and 70 firefighters six hours to extinguish the fire, which had started above moulding line 2 and raged because of the rubber belts that provided the combustible element, sending the flames into the roof. “We spent the Saturday outside as we couldn’t get in the building,” she said. The time was not spent pondering the situation, moreover everyone was assigned a task to ensure that loss of business was contained: “We contacted customers, partners, other foundries, employees. We did not want to lose time. We had no electricity, no lights, no water, no bathrooms on site during this time but you have to be stellar at working together to get back up and running. We needed to rapidly get the site released so we could rebuild, and we wanted our employees to be there and be part of the recovery.”
The team had access back into the site on the following Wednesday; four days after the inferno. Insurance and foundry experts were on site on Thursday and Friday to discover that over 2,500 items had been burned.
Bye explained that you have to consider the impact the clean-up has on the local community and how you are going to help manage this. “We had trucks coming in and out, equipment being brought in from eighty miles away, there was an impact on hotel rooms. The whole town is effected by something like this.”
Quick action, a sensible plan and a positive and transparent approach saw the foundry back up and running in just four weeks. The community, customers, competitors, suppliers and the media were all supportive – why? The simple answer is the positive way in which Dotson approached the matter. “We made an exceedingly conscious choice to ‘keep smiling’,” Bye explained. “We wanted to mitigate the stress and nervousness of employees, we didn’t want them sitting at home and thinking they might not have a job to come back to, so we got them involved with volunteering at community projects during the time we were closed, they also visited customers. We wanted them to have interesting things to fill their time with whilst we were down. We approached customers with complete transparency. We communicated regularly with customers, employees and the community. In terms of the media, it was important for us to control the message.”
The result was an influx of job applications once the foundry was back open, who wouldn’t want to work for, and with, such a positive group of people?
Dotson’s response was swift and sure. They pulled together and called in favours from suppliers and competitors to ensure their quality and delivery commitments were honoured and their order book remained throughout and after the disaster. The mutual respect for other foundries and for the whole supply chain is evident when Bye talks. The foundry family answered the call and now the foundry wants to spread the word and help others avoid such problems.
Dotson survived and will indeed thrive from what could have been certain doom because of the ethos and culture of the company. However, Bye warns others to consider everything and take heed of the things they didn’t plan for. “I would say ‘challenge for the best, but plan for the worst’. A lot more equipment and systems failed than we expected, so push insurers harder on what you have to replace right away.”
The value of coaching for senior executives
A significant number of people put their hands up when, life coach Chris Cordery of Aurora TDS asked who engaged in coaching activities. “Many of us have mentors, people who know our industry and our jobs and who can inspire us in our daily activities,” he said. “But we also need to learn how to step back from the nitty gritty of what we do and think strategically which is where coaching is an advantage.”
He said the decision to find a coach usually stems from the question: how can I encourage a culture of creativity and innovation in my company? He explained: “Effective people spend time pausing, planning, thinking. I would encourage you to get away from the ‘busyness of life and work and strategise. Go sharpen your saw – take time away to sharpen your skills and thinking.”
Aerospace supply chain – a total landed cost model
Being responsible for two billion dollars of spend in his company, Tim DiDonto, aerospace senior director for the Triumph Group Enterprise Supply Chain, said that value added is linked to everything the company does. “The aerospace and casting industries typically act as advisories and the build breaks are exceeding current capacity,” he said. “I think the disconnect is that we don’t talk!”
“The airlines demand is forecasted to be over 41,000 new aeroplanes over the next 20 years. We need to understand the demands and let’s make sure we are investing in the fleet of the future. Remember, aluminium is still half of what goes in to everything we do. Around 50 per cent of value of an aircraft is wrapped up in composites and titanium.”
The positive he said was the fact that: “the foundry industry has a lot of know-how for us – you have done a great deal for the automotive industry so how do we do that in aerospace?” He warned that new techniques and disciplines were paramount to the future success in the sector. “If you’re not addressing additive manufacturing in your business you are asleep at the switch. You can make the part as light as you want if additive can address it. The lead time dictates, so if you can program it you can print it.” He spoke of the opportunities for foundries from around the world saying: “The US market is booming but I can’t get parts made because there is no capacity. You have a really strong value proposition to bring to the aerospace market.”
He said, regardless of the opportunities, it was important that the message was delivered to the customer. “How are you guys communicating your capabilities and your capacity? If you are entering in after that stakeholder meeting it isn’t going to work and we’re going to hate each other really fast!”
He warned that working in the aerospace sector required agility and flexibility. “Our goal is to get production as quickly as we can. Then we change it all! “If you’re talking to someone who wants to talk price, price, price – talk to someone else. They don’t understand how your product can add value.”
World foundry industry global report
The World Foundry Organization’s Andrew Turner and Jose Javier Gonzalez gave an insight into the latest WFO produced Global Foundry Report which is available to view directly from the WFO (email: [email protected]). The global tonnage is now around104.3m tonnes and the report contains a comparison of markets and geographical statistics and supports the annual statistics produced by the American Foundry Society by adding additional information on the economies in each of the member countries.
The future of energy and how to survive it
Speaking about the beast that is the energy sector, consultant Mike Hogg – who has a career spanning over forty years in the energy industry with Shell and Orsted – said we had to face “three hard truths.” He told delegates: “Demand will continue to increase dramatically, and we will struggle to satisfy this because of environmental stresses. The energy trilemma is that energy should be affordable, available and we should be aware of the environmental impact.”
He highlighted concerns about rising sea levels and said: “We must manage energy. Think what could happen in areas such as Bangladesh where there is high population growth and rising sea levels, meaning thirty million people might need to migrate from this one country.” He said one of the “disconnects” was that, whilst energy is a vitally important topic, it is not treated with the respect it should be. “In my experience, it is very rare for energy to be tabled as a strategy on the board. If energy is 25 per cent of your gross margin do you know where it fits on your risk matrix?
“Another problem is that politics and energy do not mix that well! Global crises affect energy prices (spikes). Energy moves in decades and centuries, politicians move in a four to five year’s timeframe. However, you can engage with your local politicians. Remember, local politicians live in the region, so they are more relatable. Don’t just think ‘international’ or ‘national’, think ‘local’ and how you can affect the energy policy in your city or region. You need to be able to ‘influence’.
“Around 25 per cent of your energy bill is for pushing the molecules down the pipe – not for the actual use of the energy. Your energy supplier is actually your friend and not your enemy so engage with them.”
Castings – an automotive perspective
CEO of Linamar Group, Jim Jarrell gave a fascinating insight into the perspective of his company and where it is going. Having initially bought a foundry, which the company closed after a year, they re-entered the market several years’ later. The original company plan was based around machining. “Today,” he enthused, “we are ‘laser-focussed’ on growth. You must grow at a ‘profitable’ growth. Be on your game. Develop great leaders and great technicians.” He said that investing in the right people was critical to success, but the key was to ensure they stayed with the company. “We have to have a way to retain people for the future. Think about it this way – elimination of waste is paramount in manufacturing. We need to use less of everything.”
Involving people in all aspects of the business has enabled Linamar to grow at a good pace to become the seven to eight billion dollar company it is today. “Get people to recognise the value of everything. We have 312 million component parts, assemblies, 62,500 an hour.” With 60 manufacturing facilities globally employing 29,000 people, the group has expanded through diversification, starting as a machining company, then moving into forging, light metal casting and metal forming.
Embracing the ‘new’ and developing new components has proven the best course of action to grow the business. He told an enthralled audience: “Launching is critical to our success – we have about 200 launches being undertaken right now. He said the other mantra that has proved successful for Linamar was the ability to offer exceptional service. “You need to think big but act small.”
For Linamar, the foundry sector was important because of the predictability of certain aspects and how you can enhance them. “You’re starting with something solid – a material you know a lot about – then you add value. Ultimately, we got back into the foundry industry because it is a ‘one stop shop’ – vertical integration. However to progress, material development is absolutely critical.” When contemplating the outlook he said: “The future is now. Manage the present and create the future. You need to be doing these two things. A leader has to be absolutely clear in these times. We often over estimate what will happen in the next two years but underestimate what will happen in the next ten years. Data is the new oil! People are looking at data as a profit centre now not a cost centre. Linamar took all these trends and analysed and created six markets that we want to be in.” His advice: “Teamwork is absolutely essential. Have a plan but know it’s going to change – be nimble, flexible, adaptable.”
Cyber security in the e-connected industrial world
Prof Paul Theron of Cranfield University considered the effectiveness of cyber security methods and the changes to legal standards.
“Tomorrow’s world will be radically different,” he mused. “The spirit of innovation is a good thing but alas in the world of IT that is not so easy. Attackers are quick and smart, so you have to work at a fast pace and travel far.” He said help was at hand. “Fundamental research is currently taking place on cyber security. “We don’t know what the truth is behind Industry 4.0, but we know it appears to be a fantastic concept. A standardised language for a large amount of data. Supervision is a big issue.”
He warned that the industry needed to embrace such opportunities but of course with an eye on safety. “Cyber-attack malware will be so clever and strategic that no-one will be able to monitor all of it because there are so many possibilities – it is a large platform. In addition, there will be the ‘cloud’ issue. You will have your plant connected to this system. You have shared MRP systems etc.
“You will use more and more standardised equipment and standardised cyber security. These vulnerabilities will be exploited by someone, don’t doubt it. Be warned, you will be connected massively to the outside world – to people you don’t know.
“You need to set up a cyber-threat intelligence platform. Cyber has become the fifth battle ground (land, sea, air, space and now cyber). Some countries have armies of several thousands of hackers. They think like the military – tactics and strategic planning. “Your connected environment also needs to be secure. Those who own the data will have power over the market. “A start is to have policies that forbid ‘bad practices’ like writing passwords on post-it notes on the screen or in a drawer. It kills your security.”
Extending the capabilities of aluminium castings
David Weiss of Eck Industries enthused: “It is a tremendously dynamic time for the development of new materials. New materials that are designed with casting in mind.
“You can do a lot of things that you do in iron (strength-wise) in aluminium. For example in limited production is a new alloy system that uses cerium as a primary alloying element. Cerium forms extremely stable intermetallics with aluminium, taking high temperature performance of aluminium alloys to new levels. Al-Ce-Mg is heat treatable and has good strength. We’re doing a lot of additive manufacturing work with this alloy because it has excellent elevated temperature strength.”
He explained how the university is also active in metal matrix composites – wear resistance is better than cast iron and has good creep strength. However, he said there were barriers, such as a lack of manufacturing capacity, processing challenges, not enough demand to drive machining development, and cost. “Although business for MMCs has dropped off we use it for high added value items. “People are always afraid of new materials – especially the automotive guys, but there’s a future in aluminium in the high temperature space.”
Where are we going with the foundry industry and how fast?
Serhan Yenner of AGCO Corporation looked at the major challenges from design to manufacturability of both ferrous and non ferrous castings from an agricultural perspective. He said: “We have to be aligned with where the market is going. The agricultural market is now coming out of a 42-month trough.”
Established in 1990, AGCO has acquired many prestigious brands and has a global consumption of 250,000 tons of castings a year, which are purchased from around 45 foundries worldwide. He revealed: “We try to manage localised sourcing and split sourcing of components. 55 per cent of what we buy is grey iron castings and 40 per cent is ductile iron. Our engineers are also now showing a lot of interest in ADI.”
He said the main requirements for anyone wanting to supply AGCO are: supply assistance, quality, service levels, and cost (in that order of importance). “There is a lot of work that needs to be done to get to the ‘desired model’ of global casting sourcing for OEMs. We expect from our partners a great sustainable co-operation situation for both parties.”
Dr Carsten Kuhlgatz of Huttenes-Albertus also gave a presentation on the ‘Development of the e-vehicles market by 2030’. For more detail on this refer to the November 2018 issue of Foundry Trade Journal.
Summarising the message from all presenters, WFO secretary Andrew Turner said: “As individual companies and as an industry, we need to make sure we ‘work clever’ and do the important things not just the urgent things. “Do we want to be professionals or amateurs? The sports analogy works well, successful sportsmen and women practice and are professional. “We are in business to make money NOT products.”
www.thewfo.com