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EDITORIAL In It to Make a Profit, Partnership I

recently attended a seminar during which a presenter said, “You are in business to make a profit, not castings.” We all have heard this statement before. It is a common axiom, espe- cially when the subject is how to effectively

price metal castings. Metalcasters must only take on casting jobs that produce a reasonable profit for the business. Then, a few weeks after the seminar, I visited a successful and well-respected ferrous metalcaster. During my visit, the firm detailed its process for working with its customers and how it effectively “selects” which customers it wants to do business with based on who will be open to true partnership. If the partnership doesn’t come to fruition, the company cuts ties with the customer. This approach is one we hear a lot when visiting metalcasting facilities. Does your firm follow these

compatible part population is the central strategic prerequisite for profit maximization.” Now is the time to walk the walk. The shrinking open casting capacity in the

rules? Is every casting you pro- duce a profitable component? Are you working toward the same goals in harmony with every one of your customers? If we were in a utopia where unicorns pranced

around and a diet of pasta and chocolate didn’t add pounds to my waist, then all of you would answer yes to the above questions. But we all operate in this world, where the pressures of sales and revenue generation can lead to poor long-term decisions. This is especially true when desperation calls, like during the recent economic downturn. With the industry recovering from the downturn

(the forecast on p. 26 shows steady annual growth that returns the industry to 2007 sales levels by 2012), this new year provides the perfect opportunity to review your jobs and customers to ensure they are a fit for your facility. When available capacity con- tinues to shrink over the next few years as demand increases, you must ensure your plant is filled with the highest-performing jobs and the highest-potential customers. The key is to recoup what was lost in the downturn and position your business for the future. Following is a quote from the “Pricing for Profit”

feature on p. 41, “A business strategy rooted in compatibility and the pursuit of an increasingly

MODERN CASTING / January 2011

When available capacity continues to shrink over the next few years as demand increases, you must ensure your plant is filled with the highest-performing jobs and the highest- potential customers.

U.S. and across the globe puts us in an enviable position with our customers. That doesn’t mean we should just sit back, select our orders and customers, and count the money. Take a look at the profile of Carley Foundry on p. 22. This firm has experienced 230% growth in sales over the last decade, and its plan is to keep going. “Our plan is

to grow 10% per year—that’s what we strive for,” said Presi- dent Mike Carley. The firm has expanded its core business of green sand, nobake and per- manent mold during the last ten years, but it also branched out into investment casting, capping off the expansion with a $1 mil- lion robotic dipping and drying

cell installed in 2009. According to Carley, “Our customers want to

grow with us because we have all those capabilities to help them.” That is the key: developing partnerships and profits together as we regain what we lost.

Alfred T. Spada, Publisher/Editor-in-Chief

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