As a procurement professional, it is imperative to know as much as possible about the commodity or component that you plan to source. One of the more complex commodities in any industry is metal castings, which have many key commercial factors a procurement professional must consider prior to and during the procurement process. Many would assume that the material or amount of alloy material in a casting would be the key cost factor, however, to truly understand the major cost implications, a procurement professional must consider and understand the many other variables and their impact on costs. It is critical to understand the total cost that surrounds the metal casting. Below, are the critical points that need to be considered when sourcing metal castings.
Sourcing metal castings comes with many challenges due to the complex nature of the commodity. Metal castings require a great deal of design and engineering support. A procurement professional should always make it a point to work closely with the design and engineering teams to clearly understand and consider the following key factors and how they relate to procurement activities and, overall cost. The metal casting process requires designers and engineers to consider a specific list of requirements prior to handing it off to the procurement professional.
What are the Core Specifications?
Casting technical specifications drive the process, material and, ultimately, cost. Procurement professionals must evaluate the many important factors that directly influence a casting’s total cost, including; complexity of design, tolerances and dimensions, type of material, casting process, value-added operations, surface finish, quantity, and packaging. We have grouped these factors into three sections below based on our experience sourcing castings across a number of industries. Because there isn’t a simple answer or formula, each procurement professional will need to determine the relative importance of these factors based on their company’s specific supply needs. These considerations include, but are not limited to: complexity of design, material and surface finish, and quantity and packaging.
- Complexity of Design
Understanding the complexity of the casting design is an extremely important task for a procurement professional to consider prior to carrying out any procurement activity. The important factors to keep in mind regarding complexity of design include tolerances and dimensional allowances, finish machining, and value-added finishing operations (heat-treating, plating, and painting). A procurement professional should always be clear about whether the casting will be used as-cast, heavily machined after casting and the application of the casting. This will, then, raise the question of the tolerance and draft allowance. Tight tolerances and minimal draft allowance will always lead to higher costs so it is important to understand and mitigate that in the design phase. It is very important for a procurement professional to be in design discussions regarding castings to weigh in on the factors, above. As with any highly engineered component, designs have a tendency to evolve over time so it is critical all involves parties communicate early and meet often to ensure alignment.
- Material & Surface Finish
It goes without saying but the type of alloy and surface finish of a metal casting, plays a very important role in determining piece price. Material and surface finish are often determined by the application of the metal casting. Regarding the material, a procurement professional should be cognizant of the following three costs, that relate to the type of alloy: material costs (cost of chosen alloy); purity costs (costs as they relate to the level of impurities allowed for that particular casting); and castability costs (costs relating to the way a casting is molded). The surface finish of a casting is important to understand because it will ultimately lead you to the type of casting process you will want to source. Based on the application and surface finish allowances, there are different casting processes that should be considered prior to sourcing. The different types of metal casting processes include: sand casting, investment casting, plaster casting, and die casting. Investment casting is the most expensive process and die casting offers the least expensive form of casting.
- Quantity & Packaging
Two of the most critical commercial factors a procurement professional must consider when sourcing metal castings are the quantity to be delivered and the packaging with which the castings will be delivered in. The quantity of casting plays a major role in selecting the casting process and in the selecting the appropriate tooling. Being that the casting process is unique among many other commodities, each order is viewed by the casting supply partner’s plant as separate order, due to the amount of processing, and quality inspection, that goes into each batch. The larger the quantity order, the larger the cost savings that will be realized by the buyer. Packaging can also lead increased costs if not properly prepared for. A procurement professional has to be aware of the total cost of ownership when specifying the packaging. Certain types of packaging, layered or corrugated, often cost more on paper; however, these packaging solutions reduce the total cost of scrap, rework, and handling.
Procurement professionals should be well versed in the above key considerations before sourcing a metal casting to ensure sourcing success. There must be company awareness on the total cost of ownership and not just the short term cost savings to ensure long term metal casting supply success. Castings are very unique and every case must be analyzed and clearly understood prior to starting the procurement process. Keep in mind the above metal casting key considerations and you will be in a great position to offer your company the best sourcing options while driving down your metal casting total cost of ownership.