In case of foundry business, raw materials prices are increasing way too high (please see the table given above in the title). Except for Aluminium ingot (where the price spread is too high) all the raw material prices have increased in double digit annually. Foundrymen need to think out of the box to beat these price increase. Otherwise the clients would start using substitute materials which are strong enough and economically more viable than castings. e. g. in earlier days small bearing housing used to be casted ones. As the cost of castings increased and precision and productivity of press components have increased, many companies have substituted them with fabricated bearing housings made from steel sheets appropriately strengthened for longer life. Considering this foundrymen have to think ways and means to reduce the charge cost. Also there is a time to think about suitable substitute raw materials.
Let’s discuss about how the raw material prices can be reduced. Currently all the foundrymen use MS Excel or similar worksheet based software to calculate the charge mix for a given output chemistry. While calculating this charge mix they consider (few of the following points might not be considered by them):
- Output chemistry of the castings
- Input chemistry of the charge materials
- Melting losses of different raw materials
- Recovery rate of individual element in the raw materials
- Specific heat / energy consumption of different raw materials
- Flux consumption of each of the raw material
- Prices of different raw materials,
- Effect of raw material on the furnace lining (i. e. cost), etc.
Since there are so many variables, the foundrymen make a fixed recipe / charge mix considering the above points at some point of time and use it forever. So in effect their recipe is a snapshot of above variable at one particular point. Technically if any one of the above point changes (say price of different raw materials or input chemistry which varies for individual batch of raw materials), then the recipe developed by them does not remain optimal. In all such cases a software program developed using sophisticated methods such as linear programming algorithm which considers all the above points and calculate the chemistry dynamically is very useful. Please find below the table in which we have compared a “fixed” and “dynamic” recipe side by side for making 260 grade Grey Iron
From the above, we can see that it is possible to save cost even in simple recipe such as 260 grade GI. If you think that the above cost saving is only for one month, then we compared the fixed recipe cost and dynamic recipe for a period of six months and its details are given below:
Conclusion:
From the above, we can see that the average cost savings per month is about 3.89% irrespective of change is raw material and this cost savings can add to the profit margins of the foundries or by reducing the prices and making them more competitive. The decision is that of the individual foundrymen.