EDITORIAL
A Word From Your Customers H
ow quickly things change. Just a year ago, traveling around to
visit metalcasters and talk shop was not a happy experience. Mold lines were more often quiet than bustling. Workforces were trimmed to the bone. Prospects and forecasts were bleak. Any and all jobs were being taken on just to keep the plant running. Visit these same metalcasters today, and you
are lucky if they stop to say hello. Mold lines are humming. Workers, if available, are being hired. Forecasts are strong. And, many metalcasters have more casting orders than they can handle. Our industry went from operating at less than
60% of capacity in some niches to more than 90% capacity in what seemed like the blink of an eye. Tis phenomenon, while critical to the process of healing from the recent recession, has delivered a unique set of circumstances and a new dynamic with our customers. In the last few months, I have had the oppor-
tunity to hear from buyers in various markets on the difficulties they have had in sourcing their castings, from capacity to pricing to quality. Following is a sam-
pling of their comments: • “Most industries at 90% of capacity would be capitalizing like crazy.”
• “As business has increased, customer service and casting quality have taken a big hit across most casting suppliers.”
try reach higher levels of capacity utilization. When I presented these comments to a
metalcasting veteran, his first response was similar to what many of you would prob- ably say: “Tey are complaining because the tables have turned.” He might be right. But after thinking about it, he offered: “Tis really is an opportunity to educate our customers, as many buyers are naïve about our industry, what it takes to recapitalize and what it costs to make a casting. If we can bring customers to our facility and help them understand why capacity is scarce and costs are increas- ing, we may be able to work through price increases, quality issues and elongated lead times. Certainly, this is a better approach than just a sales call at the customer’s facility or a price-increase letter.” When business is
In good times
and bad, one constant for success is a positive buyer-supplier relationship.
• “We are being forced to source castings outside North America.”
• “Some metalcasters want to start surcharg- ing for sand. You can’t surcharge everything that is variable. If you do, what’s the point of a base price?”
• “Most domestic sources have no appetite for taking control of the whole supply chain.”
• “Metalcasters need to think of new ways to add value, like vendor-managed inventory, to gain on their competition. Tis is the type of stuff that drives us back across the pond. “ What do we do about this frustration? It is
only going to mount over the next few years as the economy grows and more segments of our indus-
booming, customer service becomes even more paramount. Tis is evident in the following
two quotes from buyers: • “Tere isn’t a capac- ity problem if the relationships exist.”
• “Te only way we can ensure we secure the castings we need is if we have relationships already in place.” In good times and
bad, one constant for success is a positive
buyer-supplier relationship. Take this opportunity to focus on it for today and tomorrow.
Alfred T. Spada, Publisher/Editor-in-Chief
If you have any comments about this editorial or any other item that appears in MODERN CASTING, email me at
aspada@afsinc.org.
March 2012 MODERN CASTING | 7
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