Owner, Johannes Messer-Consulting GmbH
Article Series - Summary 4 Challenges in Aluminum High Pressure Die Casting: Summary
This article series is dedicated to the changes and developments in the aluminum high pressure die casting industry. The summary shows clearly the most important conclucions and gives concrete recommendations for foundries.
Internationalization, changes in product portfolio, appearance of new technologies and the recruitment of qualified personnel present die casting companies with new challenges. Read below how these challenges can be overcome.
1) Internationalization in Die Casting
A key driver of internationalization is the automotive industry, which has gained considerable speed in recent years. All OEMs are now represented in the growth regions.
According to forecasts, however, growth in the coming years will take place outside the existing growth regions.
When implementing these plans, it is important to ensure that they are implemented in close proximity to the end customer. This is not only uneconomical, but longer supply chains also entail higher risks. But which factors play an important role in internationalization?
- In particular, the growth regions China, India and Mexico should be focused for expansion.
- Smaller foundries can more easily internationalise in a cooperation or joint venture. Integration can take place forwards (customers), backwards (suppliers) or even horizontally (competitors).
- Tier 1 suppliers are already successfully purchasing aluminum foundries and are thus becoming strong new competitors.
However, internationalization also offers enormous advantages in terms of high wage costs. Cost optimization can be achieved through expansion or new plants in additional countries. The OEM-oriented foundries must position themselves internationally in the short term.
For detailed information on implemented internationalization at big market participants, please refer to the 1st chapter:
2) Changes in Foundries Product Portfolio
New technologies, such as E-mobility, create new products. The previous "bread and butter" parts, engine and gearbox disappear. In particular chassis and structural parts are becoming increasingly important. Many of the vehicle components that were made of steel some time ago are now largely made of light metals. Apart from the automotive industry, light metals such as aluminum are playing an increasingly important role in the aerospace industry. Machining large structural components requires die casting machines with high clamping forces. However, the demand for die casting machines with high clamping forces is higher than the previous supply. These changes in the product portfolio present foundries with new challenges:
- Large die casting machines mean high acquisition costs.
- New product launches go hand in hand with high expenses.
- Falling demand for previous "bread and butter" castings leads to losses in earnings.
- An oversupply of die casting machines with low clamping force ranges leads to fierce competition and the associated price pressure.
The changes in the product portfolio offer opportunities and risks. Only foundries with appropriate technology, financial strength, employees and ultimately strategy are able to seize the opportunities.
For detailed information on the new product portfolio and its growth markets, please refer to the 2nd chapter:
3) New Technologies in Die Casting Market
The changes in the product portfolio and the pressure to optimize costs are forcing foundries to make technological advances. In particular, the following technologies should be taken into account:
- Vacuum die casting is ideally suited for the production of crash-relevant components, as air inclusions are thus avoided. But how can the know-how on vacuum die casting be implemented? Joint ventures with suppliers, for example, which ensure the transfer of knowledge, are ideal for this purpose.
- Minimal lubrication offers several advantages at the same time: Not only is water consumption reduced through the use of minimum lubrication, but cycle times are also significantly reduced. Minimal lubrication is also relevant for structural parts, as it increases process reliability.
- Rheocasting and thixocasting are becoming more and more important due to increasing demands on components. Also with SSM Casting, costs and processes can be increasingly optimized for highly stressed castings.
- Heat treatment is becoming increasingly important. Higher elongation and tensile strength are particularly important for crash-relevant components.
- As structural parts have high elongation requirements, alloy development is an important challenge.
This technology fields have top priority in the short term. Only foundries with expertise in these issues will benefit from the booming market of changing product portfolios. In the medium term, productivity improvements with these technologies are of existential importance.
What makes these technologies special and how they can be implemented, please refer to the 3rd chapter:
4) Recruitment of New Casting Personnel
All newly emerging requirements - from new technologies and product substitutions to internationalization - are placing a much greater focus on employees as a key resource in a foundry. So there is an increasing need qualified employees are recruited and executives with essential leadership qualities are recruited. Today, companies must position themselves clearly with the help of employer branding in order to recruit qualified employees.
In such turbulent times, managers, for whom essential leadership qualities are indispensable, also come to the fore. For managers, this means giving employees a vision and orientation in order to convey security to the workforce.
In the long term, only those foundries will succeed that will be headed by people who, with passion, enthusiasm and conviction, will carry their visions and strategies into the company and their employees. Employees must become "Follower of the Leaders".
For detailed information on the recruitment of employees, please refer to the 4th chapter:
Ultimative To Do's to Make Foundries Future-Proof
The currently emerging change in the aluminum foundry industry is far more serious in its effects than anything we have known in recent years. Companies that are unable to cope with the challenges have no market authorization in the medium or short term.
Foundries now have to adapt their business model to the new situation and take the following steps:
- The corporate strategy of the foundries must be revised with regard to internationalization and the emergence of new products.
- New technologies, such as vacuum die casting, heat treatment or alloy development, must be illuminated and possibly incorporated into the technology roadmap.
- Foundries corporate culture must be geared to the new requirements
- The implementation of new technologies requires high investments, which in turn require sufficiently qualified personnel. To this end, the foundry's cost base urgently needs to be optimized.
- For fast and efficient knowledge acquisition, foundries should enter into partnerships. this can facilitate market entry into new product or technology fields.
- Foundries have to secure long-term financing to make new investments. A financing roadmap can help with implementation.
- Despite all the changes, management quality should be given the highest priority.