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Some Consideration to International Sourcing of Metal Castings


Look around the city at all the metal casting - bollards, tree grates, manhole covers, wheels, and much more. Everything you see was cast by someone, somewhere. Some things are cast as a single item; others are made of many individually manufactured parts that are then assembled into a final product.

Companies that require metal castings have three choices:

Manufacture the needed parts themselves
Purchase stock parts from a supplier
Custom design their own parts and outsource the manufacturing

In years gone by, North American companies outsourced their casting projects to local, or at least regional, manufacturers. The recent rapid evolution of technology, and the spin-off effect on transportation and communications, has made it possible for companies to outsource their casting requirements internationally - without ever having to leave the corporate office.

For products made by casting, companies have a range of North American and international foundry options to outsource manufacturing. (A foundry is a factory that produces metal castings). Reliance Foundry has been involved in casting work since 1927. Since that time, we have carefully monitored the evolution of the foundry industry towards international sourcing.

Here are some important considerations when choosing an international provider for outsourcing your castings work:

BEWARE OF HIDDEN COSTS

Deciding to outsource your metal castings internationally has unique considerations for costs that may not be apparent on the surface. Some things to consider that will not be on your bid:

Currency Valuation - Some countries keep their currency artificially low to make their exports more attractive. Ensure that you have taken exchange and other currency factors into account, including the historical currency fluctuations of the country in question.

Cost of Staff Travel - You definitely want to factor in the following potential personnel expenses:
Travel costs for sending staff overseas, additional travel insurance, airfare, hotel, transportation, travel VISA requirements, etc.

All of the above are costs that many companies do not initially think about, but are time and cost considerations that must be taken into account.

Warehousing - Depending on the quantity of product being produced to maintain just-in-time delivery (as opposed to production on demand), will a warehouse be required? There is a cost involved for warehousing. Logically the importer will need to bear that cost. How will you be charged for these costs? Are there inventory issues?

Customs - Is labeling required for the country of origin? Are there unique duties or levies applied to the parts in question? Are the castings you are looking for subject to anti-dumping actions? Do you have a customs broker in place to manage your documentation and customs processing?

Processing Fees - Custom broker’s fees, merchandise-processing fees, port processing fees, etc. These may not appear on your bid, or may appear as an estimate, but they can be quite high. Remember that freight and handling costs have more to them than simply the cost to transport the items.

Air Freight Charges - Overseas ocean freight can be time-consuming (logistics to port, mustering, consolidation for bulk shipping, ocean travel time, customs clearance, etc.), so there will be occasions where expensive air freight may be required, whether to expedite orders due to unforeseen delays, or whether it is considered for initial sampling or prototyping in order to speed up the final metal casting manufacturing process.

COMMUNICATION CHALLENGES

Email has indeed made communication faster, easier and more efficient. However, when discussing metal casting manufacturing with potential outsource partners overseas, there may be language differences, differences in drawing interpretation, or differences in production processes. When outsourcing, you need to be aware that these differences can often lead to miscommunication and result in errors or delays in the final metal casting product.

Spell out your production criteria.

Ask: Will the parts be made on an automated machine that provides consistency or will they be made with a great deal of human variables? Either method may be acceptable to you, but you should be entirely aware of what methods are being employed.

Ask: What QA (quality assurance) inspection levels are included in your pricing, and are these being conducted by third parties? Many quotes do not include specific inspection details, and inspections are often not followed on a consistent basis, unless specifically requested and monitored. Make sure you ask for and receive these details prior to engaging production. (See “Metallurgical Integrity” below).

Ask: Who will own and maintain the tooling used to produce your parts? It is advisable to maintain possession of your tooling and design unless your parts are generic. Also, ask: “How will the privacy and security of my designs be maintained and monitored in the future?”
Asian countries are 12–14 hours ahead of North America, so there will likely be a need for middle-of-the night, or early morning conference calls if you are outsourcing your castings work there. You need to be committed ahead of time to being available during off-hours.

METALLURGICAL INTEGRITY / TOOLING: QUESTIONS TO ASK

You will need to intimately know what level of physical and metallurgical integrity is important for the products you are trying to outsource. This should drive you to obtain the answers to a host of other questions:

Will the foundry use raw material, ingot or scrap?

Does the foundry have a spectrometer? (Spectrometers are used for metal analyses in the foundry.)
How much confidence can be placed on certification from this foundry? Is a reliable, professional, 3rd party inspection company required to provide verification of inspection results from time-to-time, in lieu of your physical attendance on site?

If a wet lab is used, do you believe the foundry will take the time to check each heat (batch) prior to casting? Are heat analyses sufficient, or do you need individual product analyses?

How confident are you in the foundry’s quarantine system for instances when quality issues are uncovered? Is the foundry’s QA staff provided with authority to accept or reject materials beyond the authority of production management staff?

While tooling can often appear inexpensive, long-term durability of the tools should be considered. Premature tooling wear will alter the performance of the casting and/or change the outcome of the parts; questions on who will resolve and pay for the dimensional changes over time must be addressed. You should ask: “What type of tooling is being paid for - metal, wood, or urethane?”,” If metal tooling is used, what grade of metal is being used for the tooling?"

MAKE A THOROUGH BID REQUEST

Take the time up front to prepare a thorough, detailed bid request. A well-organized, clear, and concise request makes all the difference between a project running smoothly and a disaster waiting to happen. Before submitting a bid request for metal castings, take the time to read the article that describes how to streamline your casting project - the useful information provided there will help to guide you in your bid request preparation.

In spite of all these extra considerations, global outsourcing of your metal casting projects can still result in significant savings for your company.


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Add. No. 1-4-11, Jianshe Road, Donggang, Dandong City, Liaoning, China 118301
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