Now Is the Right Time to Switch Foundries
After a few frantic years, OEMs are coming up for air and looking at the world around them – including their current suppliers.
“In 2021 and 2022, casting backlogs were out 20-plus weeks for most foundries,” says Jesse Milks, President of State Line Foundries. “Foundries are still busy, but not to that degree.”
The frantic days are sure to return. “This industry has a history of ramping up and down,” Milks states.
When the next boom comes, will your foundry’s troubles return, too? Will backlogs stretch from here to eternity? Will quality suffer? Will your phone calls go unanswered?
Many OEMs are asking these questions, not liking the answers – and searching for a new foundry.
What leads OEMs to consider a switch?
Backlogs. Some foundries were so far behind that the OEMs lost business. Milks believes it’s often a lack of communication about timeframes that pushes OEMs out the door.
“The customer service support team is crucial,” he explains. “That communication is critical. Buyers are frustrated they don’t get the answers they need in a timely fashion, even if those answers aren’t what they want to hear.”
In some cases, foundries needed to schedule orders so far into the future that they told OEMs to take their business elsewhere. “Over the last few years, a lot of foundries got rid of parts and customers that don’t fit their niche in order to reduce backlogs and improve profitability,” he says.
Quality concerns. “The quality in our industry, globally, has seen a bit of a dip,” Milks states.
Backlogs played a key role. Sometimes, there was more emphasis on getting the job done than doing the job right.
There were also many newcomers to the industry, which sometimes resulted in poorly made castings due to the staff’s inexperience. “Training takes time,” Milks stresses.
Some raw materials were no longer available, or only available in limited supply. In numerous cases, alternative materials were developed and used in the casting process that were sub-par.
Price hikes. Before the boom years, pricing typically drove decisions. It is still a priority, of course, but not always the most important consideration.
“If you can’t get that $20 part, and it prevents you from finishing that million-dollar mining truck, there are problems,” Milks says. Recently, OEMs chose to pay more to ensure those $20 parts were available.
Still, higher costs can trigger a move. “If the quality is deteriorating, and the OEM is waiting on the part, and then a price increase comes along … that can lead to a move,” Milks clarifies.
What prevents OEMs from moving?
There are plenty of reasons to switch. Still, many OEMs are hesitant to make a move.
Price tag for new tooling and transfers. “There’s always a little bit of cost there,” Milks emphasizes. OEMs worry about the new foundry’s tool building capabilities – or losing a tool during the transfer.
“Most longtime buyers have a horror story of losing a tool,” Milks says.
Fear of more delays. Switches take time. Some OEMs feel it’s better to wait in the existing line than get to the back of a new one.
“If they move the tool, and the new foundry supplier doesn’t perform, then they’re way behind the eight ball,” Milks explains. “There is the fear of the grass not being greener.”
Why switch to State Line Foundries?
Yet there often is enough cause to make a move – in particular, to State Line.
Current backlogs can be improved. Yes, the lead times have shortened. But there is always room for improvement. “I tell new customers that we’ll make a commitment to dig them out of their hole,” Milks states.
State Line relies on tried-and-tested processes to reduce lead times. Its personnel is also highly experienced and skilled.
Longer backlogs will return. Foundries that struggled once will likely struggle again in the future.
“The cycle is going to happen again,” Milks believes. “The demand spike with longer backlogs will return. The best time to switch is now.”
Highly skilled labor. State Line has a history of success during booms and slower times. “When things get slow, we avoid layoffs and keep people on staff,” Milks offers. “Markets will pick up again, and we want to be able to respond first, fully staffed, to increasing demands.”
Customer service. State Line has a team dedicated to communicating with customers – across all fronts. Team members answer their phones and return calls. Customers aren’t left wondering.
Tool transfer experience. State Line is a low volume, high-quality, specialized foundry. That means it brings in hundreds of parts numbers per year.
“Some of the higher volume foundries might bring in 20 parts,” Milks details. “We have much more experience in the transfer process. We have in-house pattern makers who can modify and repair tools and keep them in tip-top shape. Our turnaround time with new tools is very fast compared to the rest of the industry.”
Honest assessments. State Line provides direct, accurate communication for existing customers and prospects.
“We’re not going to oversell a bill of goods,” Milks clarifies. “We will diligently review the iron castings for good fits here. We can make any casting, but there are times when it’s not a good fit. If that’s the case, we’ll say so.”
ISO certification. State Line is ISO 9001:2015 certified – and has been for over 20 years. The foundry is also ABS certified.
“It shows the OEMs that don’t know us that we have a quality commitment,” Milks declares.
Expertise. The management team is a great blend. There are supervisors who have been in the industry for decades. Others have 10 to 20 years of experience and understand what it takes to get jobs completed. A handful of younger associates are hungry to learn and drive future successes.
Effective processes. “We have the same processes and equipment – or maybe better – as the biggest foundries in the country,” Milks says. “We’re just packaging it in a lower volume niche.”
All these reasons make State Line an option worth investigating. The foundry’s team ensures the promises made during the sale are kept – and they have the experience to ensure a smooth transition.
“We are well versed at kicking off new jobs successfully,” Milks states.
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