Chances and Challenges for the industry
The casting industry is in 2019 at a decisive point. There are huge chances for the future to increase market share, quality and efficiency. But there are also some major risks looming over the future.
The next years will be challenging for the foundry industry on many levels. The trade conflict between China and the US could bring about a recession or at least some major disturbances in the global trade chain. Supply chains could be interrupted and prices for raw products, logistics and finished goods could significantly increase.
Concerns about man-made climate change and limited resources are especially important for foundries. Foundries are well ahead when it comes to recycling: At the end of a life cycle, metal castings can normally be recycled for new castings. Thus, foundries make sure that precious resources are not wasted. Even the sand is recycled. The off-side is the high-energy consumption, which is to some point inevitable. Nevertheless, there is still room for more energy-efficient production. Especially in Germany industrial production is privileged compared to consumers as some hefty fees on energy consumption apply only to the latter. But will this last?
Technological changeoffers solutions
The best solution seems to come from technological progress or what’s called “Industry 4.0” as all industries become more and more digitized. The continuous digital surveillance of the whole production process has some consequences:
First, foundries gain deeper insights into their daily production process from the constant data flow. Cleverly mined this data helps to identify critical steps in the production chain where time or energy is lost.
Second, a plant can be fine-tuned using this information. Lowering the temperature in idle parts of the production chain or, better, restructure processes to avoid idle machinery in the first place.
Third, foundries can skip some time and resource consuming steps when they use simulation software instead of a trial-and-error process e.g. to design efficient moulds.
Fourth, additive manufacturing is especially useful to rapidly build complex tools and moulds. But it is now also a viable alternative for small orders. Despite the specific problems of this technology with energy consumption and finishing.
Finding the optimum solution to digitize one’s production chain will probably be the single biggest challenge for all businesses in the industry. It’s not simple, but it is a big chance to move forward with production efficiency and the environment at the same time.
Changing customers, changing workforce
Today, casting is a global business and most of it is done in Asia, in China and India but also in Japan and South Korea. More than 60 percent of worldwide production comes from South and East Asia. The main reasons, that Germany (5,6 percent market share), as well as Italy and France, are still strong players in this market are there customers and the skilled workforce.
The automotive industry and its suppliers are by far the biggest customers of European foundries and they like to have foundries close to their own factories. But other industries like mechanical engineering or household goods, too, are still going strong in Europe and are good customers of casting products. For car-makers, though, significant changes lieahead. The era of the combustion engine is coming to an end. Foundries can be a partner in this process as they have the necessary know-how to develop light-weight car parts. At the same time, there is a risk for European producers, that future cars with less complex engines and gear units will be built elsewhere by a cheaper workforce.
Europe’s ageing workforce is another problem. In the German system of vocational training, the foundry industry absorbed graduates with a rather low level of school education but gave them a thorough, high-quality in-house training. But as cohorts grow smaller each year the pool of good candidates is shrinking. At the same time, there is a trend for young people to seek clean white-collar jobs.
Ironically the nature of work in foundries will change, too. Digitization means that employees need the ability to work with computer systems even on the production level. Workers need to know what sensors monitor their machine and working environment and they need the ability to document their work. They will see less heat in their workday and more bits and bytes, but it will remain a physically demanding job.
For engineers, there will be less change. Probably the industry will be able to employ more of them, but it is not sure if universities can supply enough graduates. The threshold for students is high as they need very good mathematical skills and technical understanding to succeed.
At the end of the day, a well-trained and capable workforce will be key for the survival of the industry in Europe and the US.
Casting is a rather fast and inexpensive production process, especially where mass products are concerned. Not every business which could profit from this technology is using it actually. Seen all risks, chances and challenges mentioned above there is simply a huge new market to win out there. Technologies like additive manufacturing and well-trained inventive staff can help to convince customers. There are many opportunities for growth.