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“All the castings we produce must stand


on their own merit.” —Mark Shelton,


VP of sales and service


lbs. Currently, sales are split in half between green sand and nobake casting. “We have nothing magic out there


in the foundry,” Meyers Sr. said. “We have some older equipment that is well maintained and fits the niche we want to produce. Tere will always be a need for lower run, higher quality castings of all sizes. I have visited a lot of foundries with high production equipment, but I have been to a lot of auctions [for the equipment] as well.” Current President Meyers said Oil


City’s customers appreciate the logic. “When our customers see what


we do to produce our castings, they don’t push us on automation,” he said. “Eighty percent of our current tooling is transferred tooling. At our volumes, our customers aren’t always going to want to pay for new tooling. We need to stick with the tried and true methods.”


In-House ERP


Meyers Jr. admits Oil City isn’t the least expensive metalcaster in the mar- ketplace. But he knows its capabili- ties—capabilities for low volume, short run, complex cores and unique iron alloys—command value. In addition, he knows Oil City’s pricing model is accurate and has given the company credibility with customers. “We work with customers to


provide them with detailed cost and pricing data from our ERP (enterprise resource planning) system,” said Mark


For Oil City Iron Works, the official management transition from father, Eric Meyers (right), who now holds the titles CEO and chairman of the board, to son, current President Eric R. Meyers (left), oc- curred in January 2008.


Shelton, vice president of sales and service. “With our customers, we use this tool to better educate them on the metalcasting process and how our pricing model works. Since we are able to provide realtime costs, this tool has allowed us to develop true trust with these customers. Tey realize castings are tied to their long-term success. Te information they gain hasn’t been used to pressure us on price, but instead made for a more efficient busi- ness [for both of us].” Oil City began to develop its


customized ERP system in 2006. For the previous decades, it had relied on a paper-based system that outlined the required raw materials (metal, sand, coatings, etc.), manufacturing procedures and processes, quality and cost for each job. However, the system didn’t provide Oil City with the flex- ibility to quickly determine the effect of raw material price fluctuations on casting price, nor did it justify price in- creases and surcharges to the customer. “When raw materials became


ONLINE RESOURCE Visit www.moderncasting.com for more photos of Oil City’s casting operations.


volatile in the mid-2000s, we needed a way to prove to our customers that our pricing model was sound,” Meyers said. “Te old system didn’t always carry enough weight. Tis new ERP is a transparent system that allows us to


educate, and our customers understand the authority it has on the surcharges. In some instances, it has gained them credits back.” Oil City wanted an ERP system that maintained the depth of information required to handle the firm’s more than 10,000 active patterns and was flexible enough to deliver the cost and pricing data required by sales and customer rela- tions. Te metalcaster already document- ed 70% of the process and raw material information used by the new system, but it had to secure new data to complete the transition to the updated ERP. While this was no small chore, Oil City was able to identify many casting jobs that were not producing profits. “We are proud to say those jobs


have been corrected,” Shelton said. “All the castings we produce must stand on their own merit.” Oil City updates the system


daily with new scrap and raw material prices. It also regularly tests “what-if ” scenarios when raw material prices ap- pear on an upward trend to determine how the changes might affect pricing and profitability. “It is critical to keep everyone on the same page within our growing facility, and the new ERP system is the critical link,” Shelton said. “We don’t


August 2011 MODERN CASTING | 23


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