3, KESHAV RESIDENCY, “TATHASTU”, 150 FEET

RING ROAD, NEAR NORTH ANGLE BUILDING,

RAJKOT-360004. (GUJARAT) INDIA

Dhananjaya Upadhyaya

TECHNICAL &

COMMERCIAL

EVALUATION

WHILE DEVELOPING A

NEW CASTING

PRIMARY INFORMATION

Company which needs castings, we will call as customers & thecompany which produces the same, we will call as suppliers.Now, when any customer is looking for castings to be produced,obviously, will look for a better foundry. When customerscontact suppliers for their need for castings, they ask forsuppliers’ facility details, certification, etc & sometimes theyvisit personally also. Supplier provide the required informationto the customers. If the supplier is satisfied by the facility &system of supplier, he offer some drawings for the requiredparts. Now, the question comes “how to work on this offer?”

What is the basis to calculate this offer for the customer? The offermust be based on all the information mentioned in the drawings& specifications provided by the customer. Supplier shouldcalculate all the costs which are connected to manufacture thatproduct.

Everything must be studied and understood by both

parties (the customer, and the supplier) for all

requirements for that product. In short, the supplier

recognizes and understands what the customer

wants, and confirms to meet these requirements

by his offer.

If this simple rule is not followed, very often problems

come up between the customer and the supplier after

starting the development of the part.

Many customers clearly mention the standard

specification to which the casting(s) should conform –

including material specification, testing methods,

delivery conditions etc, along with the drawings, and

their purchase conditions. If the supplier does not

clearly understand about any point in these, he must

seek clarification before submitting an offer.

SIMPLE STEPS TO FOLLOW:

The steps : Technical and commercial evaluation in the following sequence

will enable us to develop any new casting easily and systematically:

1. Standard (number & edition): Always use the latest edition of the

standard. Check the number of the standard. If it is an overseas

standard; find out its equivalent Indian standard, and its latest edition.

2. Material properties: The customer (or the component designer) must

indicate the material properties of the component: UTS, special tests if

required, e.g. pressure test (if yes, at what pressure?), impact test,

radiography, MPI, etc.

3. Representative section thickness of casting: Some cast alloys are

section sensitive, e.g. flake graphite cast iron. In the same casting, the

properties may vary at different locations, depending on the section

thickness. Hence test block section and test bar dimensions should be

decided in advance to represent the section thickness important in the

component.

4. Salvaging of the casting: If the casting if found with any discrepancy,

it is necessary to know whether it can be salvaged (by welding or filling

the cavities by m-seal) or not.

Specification

QUANTITY

Following information should be known before

submitting an offer (i.e. a quotation):

1. Normal Order Quantity (NOQ)

2. Annual Order Quantity (AOQ)

3. Future demand of that part

4. Test Pieces or test bars

Normal Order Quantity is required to evaluate the

supplier’s facility for the production – hand

moulding, automatic machine moulding etc.

According to the facility or the production

method of the supplier, he can inform the

customer to specify the optimal order quantity.

In serial production (>100 numbers), it is indicated in

most standards that the supplier can deliver with

variation up to ±5% of the order quantity.

Depending upon the normal order quantity or total

order quantity, number of sample castings can be

pre-decided, say 50, or 100 or any other number.

We can call these as a “Pilot” batch.

DRAWINGS

The customer can provide drawings of different types :

1. Machining drawing, using which the supplier has to makepattern equipment after adding machining and otherallowances, and make castings. Machining drawingincludes surface finish conditions, area or location formachining and amount of machining. Dimensionaltolerances are indicated as per need or as per the standardfor casting tolerances or machined component tolerancesstandards.

2. Sometimes they may give casting drawing, along withmachining drawing. After making the casting, the suppliercan check the casting with respect to machining allowancesand other requirements.

3. At times semi-finished part drawing is provided, in case thepart needs to be tested by non-destructive tests like MPI,Radiography etc. Tolerances are indicated in thesedrawings also.

IMPORTANT POINTS ABOUT DRAWINGS

The drawing must indicate the Condition of the part viz. machined condition, semi-finished condition or “As-cast” condition. This should be clearly mentioned in the title block of the drawing. Machining tolerances should be mentioned if it is a machining drawing.

Version of the drawing with the date of revision andby whom it was revised: If any modification is done inthe drawing, it is very essential for the customer tomake a new drawing and provide to the supplier, andto withdraw the old drawing. The supplier shouldacknowledge to the customer the receipt of the newdrawing, and should start working as per the newdrawing.

Tolerances: There may be three types of tolerances: 1.

tolerance for individual dimension, 2. Geometrical

tolerances, or 3. General tolerance table.

If general tolerance is applied, it must be indicated

particular tolerance for particular dimension; e.g. for

diameter, for thickness, for length, for radius at

particular spot etc. That means, all dimensions must be

clear for tolerances. The tolerances must be as such to

get a good part after final machining. The tolerances are

clearly set for “as-cast” parts standards.

Surface roughness is disputable parameter for all

casting manufacturers and customers. It is less

important at the areas of the component where

machining is done. It depends on the method of casting,

type of moulding material and complexity of the casting.

The roughness of the casting surface depends upon:

I. Moulding material and its flow ability

II. Fluidity of the casting alloy

III. Number of risers, chills, locations of chills, coatingmaterial for cores & moulds etc.

IV. Complexity of the part. Uneven metal thickness cancreate problems. Metal cannot solidify at equal rate,creating problem for choosing the right pouringtemperature. High pouring temperatures can also createproblem for roughness of the casting.

Machining stock must be such that the supplier canproduce that part. Required dimensions must be obtainedwithin the tolerances and with the plain surface roughnessas required. This machining stock (allowance) should be asless as possible to keep the casting as well as the machinedpart cost low.

PATTERN EQUIPMENT

The supplier can decide the pattern equipment

material & number of patterns / core boxes

depending upon the complexity of the part, order

quantity per year or life long, and moulding method

decided for that particular part (green sand – hand

moulded, machine moulded, no-bake moulded, shell

moulded etc).

To illustrate this point for different types of

components, some moulding & pattern details are

given as the points below:

1. Large quantity order, complex, small size part, high tolerance& surface finish requirements – Shell moulding / core makingor Investment casting is preferred.

2. Large quantity order, small & big parts, requiring mediumtolerance & roughness values – metallic and/or plastic/aralditepatterns are preferred (for green sand machine moulding).

3. Medium order quantity, small & big parts with mediumtolerance requirements – Hard wooden or plastic patterns arepreferred in usually chemically bonded sands, but in case ofsmall & simple parts, wooden patterns can work in green sand,automatic moulding machine also.

4. Small order quantity, for small or big parts, sometimes woodenpattern may work, but for big parts > 100 kgs, as normallychemically bonded sand is required, wooden pattern can notwork. Here, metallic pattern is required though the orderquantity is less.

5. Finally, for one time production, there are different ways ofproduction:

The part itself works as a pattern by just covering it byadditional allowances by wooden pads or metallic padding tomake it to work as a pattern.

For Cylindrical & simple castings, Sweep pattern can

be used in pit moulding by loam sand. Also, thermocol

pattern is preferred.

QUALITY CONTTROL & INSPECTION

Quality level is indicated by various types of tests &

inspection procedures. Such tests are:

Visual & Dimensional Inspection,

Mechanical Properties Tests,

Chemical Composition Test, and

Non-destructive Tests

Visual & Dimensional Inspection :

Inspection can be carried out by the supplier, thecustomer, or a third party. It is necessary that thecasting must meet the standard set in the purchaseorder and which has been accepted by the supplier.Inspection is carried out as per the standard, e.g. inEurope, this standard is EN 10204 3.1 / 3.2. Thesurface quality is checked by Visual Inspection, and thefitness of the part is checked by dimensional inspectionaccording to the drawing.

Surface quality is also checked by some non-destructive tests like :

1. Magnetic Particle Testing (MPT),

2. Dye Penetrant Testing (DPT) or Liquid PenetrantTesting (LPT), or

3. Surface Roughness Test (especially carried out onthe finished machined part).

Mechanical Properties Tests: Such tests include :

1. Hardness test (Brinell, Rockwell or Vickers scales)

2. Tensile test (UTS, yield strength, ductility)

3. Impact Strength test (at specified temperature)

4. Bending test

5. Shock Resistance test

6. Pressure test etc.

Chemical CompositionTests: Two methods of chemicalcomposition tests are : Wet analysis (traditional method),and Spectrometer analysis.

Non-Destructive Testing (NDT): Section quality (i.e. soundness) can be checked by different tests :

1. Radiography Test (RT)

2. Ultrasonic Test (UT)

3. Eddy Current Test

Microstructure Evaluation : Microstructure or otherproperty may differ at different locations in the samecomponent. Customer can put some restrictions for themicrostructure variation from section to section.

In the same way, customer can specify location for the testalso. For example, they can specify particular location forhardness test, or radiography test or MPI.

PILOT BATCH PRODUCTION

Pilot batch is normally used to carry out inspection at

the customer’s end for various purposes, viz.

Supply consistency

Quality of the material

Dimensional accuracy & consistency

Surface quality

If everything is fine, and if the customer wants large

quantity, he can decide the pattern material, i.e. go

for metallic patterns or continue with wooden

patterns etc..

DELIVERY CONDITIONS

After production of the pilot batch, the question comes for thedelivery conditions. The customer should specify theconditions for delivery of the parts at the time of placing theorder. Delivery condition of the parts, depends upon thecondition of the parts – as-cast or fully machined & finished.Overseas customers indicate their own requirements for theparts to be supplied.

At the same time, the mode of transport is also decided beforeordering, so that the supplier and the customer both canassure timely and safe delivery of the material.

It is also a must for the customer to specify the condition of thepart to be supplied (as-cast, semi finished, fully machined,painted, oiled or greased, or just as-cast or as-processedcondition). This is necessary for the safe delivery of thematerial. Because, if the customer needs the parts in as-castcondition, either the parts can be sent naked, painted, primerapplied, or oiled by rust preventive oil.

If the parts are to be supplied in semi-finished or machinedcondition, they should be oiled by rust preventive oil andpacked in either plastic bags (for small parts) or covered withplastic and fixed in pallets to eliminate damage duringtransportation (especially for big parts).

DELIVERY SCHEDULE

Delivery schedule is decided by the customer and the

supplier at the time of finalizing the order. Many

customers provide the annual order, & then send the

monthly requirements as schedules by 1st week of

every month or in the last week of the month for the

coming month. It is likely that the customer may ask

for the fastest possible delivery, and the supplier

may prefer little longer time for the delivery. But the

important thing is that both – the supplier and the

customer – must finalize the time for :

First Sample

Pilot Batch

First supply of mass production

For this, after finalizing the time schedule the supplier

should prepare a time plan for the above actions.

After presenting the time plan to the customer, the

supplier must stick to it. Too short a delivery time

increases the risk of rejection, cost to

supplier/manufacturer, and needs highly skilled staff,

highly sophisticated machinery & instruments,

automatic production capacity etc. at the supplier’s

end. On the other hand, too long delivery schedule

can increase the risk of loss of credit or order for the

supplier. Also, it increases the risk for the customer

to lose his market orders from his customers.

Just in Time (JIT) delivery concept is desirable for

optimum results.

For new part development, longer time is needed.

Because, first time production of any part needs

attention on methoding, pattern equipment making

and other process details. Also there may be some

change or modification in pattern, production method

or methoding of the casting for mass production.

Hence, it is preferred to set the delivery time for mass

production only after obtaining the acceptance from

the customer for the pilot- batch.

COST ESTIMATION

Price is decided jointly by both the parties – thecustomer and the supplier – on the basis of orderquantity, complexity of the part, weight of the casting(or cast component), production method, requiredquality standards & testing, rejection level, supplycondition (painted, oiled, machined, semi finished),packing & delivery standards, transportation, duties& taxes applied, and at last the profit margin.

In other words, “Price is the best reward forthe component supplied to the customer,as desired by the customer, inaccordance to assuring full satisfactionto the customer (or the end user).”

COSTING TABLE

Data to be collected for costing

Pig IronCarbon cup for

CE analysisFurnace Lining

MS Scrap Burning Loss Refractory material

Returns Yield Whyte Castable

CI Scrap Asbestos

CRC River sand Plant Maintenance

CPC Returned sand Electricity

RPC Bentonite Labor Cost

Graphite Electrode Scrap

(GES)Coal dust

Charcoal Dextrin In-house Rejection %

FeSi River sand Profit Margin

FeMn No-bake Part-A

FeCr (High Carbon) No-bake Part-B Overheads

FeSiMg Alloy Shots

Inoculation Electricity

Copper Grinding Wheel

The foundry should calculate the price on the basis of-

the above mentioned points, and add to that - other

business related expenses, outsourcing cost (if any),

plant maintenance and depreciation cost, other

overheads etc.

The price is finalized on the basis of “per part” or “per

unit of weight”. Also, the supplier should mention the

condition in the agreement about the currency

conversion rates, especially while dealing with

overseas customers. If there is any change in

currency conversion (e.g. US Dollars or any other

currency to Indian Rupee or currency of the supplier’s

country) about 3% (or as pre-decided by both) of

variation is accepted, otherwise the customer has to

bear the difference.

Tooling (i.e. pattern equipment) cost is calculated extra

and intimated to the customer in most of the cases,

as the supplier is normally not ready to bear the cost

of the pattern equipment. The supplier should also

request the customer to validate the pattern

equipment while confirming the pilot batch quality.

Cost Calculation needs much attention because there

are many factors in a foundry to be considered. Even

the hand gloves used, materials like Feviquik, nails,

screws nuts & bolts also should be considered for a

perfect costing. But, normally, in almost 95%

foundries, it is neglected. It is normally covered

under Overhead costs.

P A Y M E N T

This is a very interesting & the main part of our evaluation.Most of the customers wish a longer credit period, & mostsuppliers wish to have a short time payment period.Hence it is decided by both the parties at the first meetingbefore finalizing the order. Mostly pattern costs arereleased by the customer to the supplier in advance norder to develop the parts. Sometimes, some amount ofmoney is kept as a security deposit, by the supplier,especially in the case of International dealing.

Payment for the supplied parts is made :

on correct quality & quantity delivery of the parts as perthe Purchase Order raised by the customer,

on receipt of related documents like invoices, testcertificates, inspection reports etc., and

according to the agreement made at the time of finalizingthe order,

as per the payment time agreed to jointly by both parties.

INVENTORY FOR THE FINISHED PARTS

Many times, it is agreed by the supplier and thecustomer, that some quantity of parts is kept asinventory by the supplier for Just in Time (JIT)delivery of the part, upon receipt of the schedule fromthe customer. Because, customer normally issue acommon order for the whole year or for six months,and then they provide schedules as per theirrequirements or on monthly basis.

In this case, the supplier can request the customer forthe inventory cost, because every supplier cannotafford this cost. Also, at the other end, the customershould offer this cost to the supplier. In this way, astrong bond and good understanding is formedbetween the customer and the supplier. Suchrelations can be long lasting.

There are certain advantages and disadvantages of theinventory of the parts. Advantages to the customer are:

No transportation cost

No damage of the parts

Pattern maintenance responsibility is with the supplier

No storage tensions at customer’s own premises

Can get on time delivery of the parts whenever a scheduleis raised to the supplier.

Advantages to the supplier are:

Can assure timely delivery of the parts to the customer,keeping his prestige for timely delivery,

On the basis of existing stock lying with him, he can createget more financial support from banks.

But there are certain disadvantages also for both thesupplier and the customer. The customer has to giveassurance for the patterns from any damage. On the otherhand, the supplier has to bear the cost for inventory, andthe responsibility for the ready components and thepattern equipment.

&….At the ending of this session, I would like to

tell my friends, that…

Careful technical and commercial

evaluation – done jointly by both

the customer and the supplier – will

go a long way towards happy and

healthy business relationship and

continued growth of the castings

business.

HAPPY CASTING..!!!!!!