Expected impacts listed in the work programme
Situation for manufacturing in the world is changing rapidly. EU’s whole manufacturing industries including foundry are now facing crises. The European foundry business is a traditional less RTD intensive industry which is dominated by SMEs and which forms a significant part of Europe’s manufacturing industry. Pressures related to customer service, times and reliability of deliveries, series sizes, pricing and rising costs are directed to foundries. Foundation of manufacturing is made growing personnel, and we must be most afraid of lacking of human resources. Intellectual capabilities and know-how on personnel is extremely difficult to recover. Effort is also needed to discover domestic demand for foundry products and to develop new markets for the foundry field both in EU and abroad. To face the key objectives of Europe 2020 strategy (Smart, sustainable and inclusive growth), a new business model should be created through the innovation and cooperation of the industries, research centers and academic institutions.
International dimension OEM’s require high quality products (high tech and customized). The foundries have to be prepared to meet these needs. Manufacturers in the U.S., Japan and Europe currently lead the global construction machinery and equipment market. Chinese firms enjoy an active presence in the Middle Eastern and African markets, and are currently looking at increasing their share in the Russian market. The major agricultural, mining and construction machinery companies include Caterpillar, Hitachi, Komatsu, Terex, CNH, Deere, Volvo, etc. The industry is highly concentrated33: the 50 largest companies generate more than 80 percent of revenue. The automobile market was expected to sustain ductile iron growth into the twenty-first century as the preferred replacement for forged gears and shafts in power transmissions. Specialty industrial machinery, such as those used for paper, printing, and plastic manufacturing and for farm and construction equipment, were expected to maintain the demand for ductile iron. The development of austempered ductile iron (ADI) allowed this metal to challenge forgings and cast steels in operations requiring strength and durability.
Figure nº 3.1 shows worldwide movement of castings consumption (2010-2020 period) and figure nº 3.2 shows foundry production in the world-2007. Fig nº 3.1- Worldwide movement of castings consumption (2010-2020 period) (Source: VDG)
Fig nº 3.2- Foundry production in the world ref -2007. (Source: VDG)
According to the 2007 Modern Casting Census of World Casting Production, China was at the forefront of gray iron castings with production that reached 15,460,176 metric tons, followed by India with 5,332,000 metric tons and the U.S. with 3,889,000 metric tons. China led in ductile iron castings as well with production totalling 7,698,396 metric tons, the U.S. with 3,890,000 metric tons, and Japan rounded out the top three with 2,044,055 metric tons.
U.S production was due to the cost advantage of mass production while European countries led by Germany successfully developed more sophisticated products to attain a larger share of the market. China and other Asian countries are taking advantage of lower production costs to expand their shares in more ordinary lines of products. Despite the competitive pressure from Far East manufacturers as well as cyclical difficulties in some client markets, some sectors of the foundry industry are showing good results and positive trends while others are struggling hard. Obviously, all companies expect to consolidate their respective EU and USA + Far East market shares, but commercial risk is estimated to be medium to high due to the increase in market needs for sustainable processes and ecological products, but also by the competitive situation of the market due to China, and India products. Table nº 3.1 shows a markets growth forecast for castings until 2015.
Table nº 3.1 – Growing markets for castings until 201534
Regarding the future of European castings production and the role of far-off outsourcing, what we can expect is that the growth in the BRIC (Brazil, Russia, India, China) markets will still keep up huge demand of products. Thus, the low-cost countries (LCC) import does not devastate seriously the European markets.
On the contrary, both the European engineering product manufacturers and the BRIC industry are considered to form a strong global demand benefiting both European and LCC foundries, and there will be significant volume cross exporting, too. In table nº 3.2, we have tried to highlight some arguments of global or regional market.
European dimension . The EU cast iron foundry industry is a significant contributor to the EU economy as supplier of basic and high value added products. See figure nº 3.3. The production of manufactured goods is about 12.000 million euro. (47,18 % nodular cast iron, 43.4 % grey cast iron). Figures nº 3.4(a &b) show statistics on the production of manufactured goods with cast iron.
Over the last twenty years ferrous metal foundry has been subjected to a re-organisation process that has led to a substantial reduction of the production base, e.i. Italy: Specifically, the overall number of enterprises dropped from 694 to the current 281, with a reduction rate of 59% (-413 units).
The large number of low-productivity SMEs co-exists with a small number of more productive medium, local enterprises. The key economic challenge is to manage this dualistic structure such that all enterprises can contribute to the growth of the economy. This requires that a concerted effort be taken to assist SMEs keep pace with the rest of the economy. FlexiCast project is intended to do this.
SMEs face structural weaknesses, which lead to their poor productivity performance.
- Weak entrepreneurial culture
- Insufficient management know-how and professionalism
- Shortage of professional and technical manpower
- Insufficient use of technology (IT)
- Outmoded, unproductive methods of operation
- Limited ability to tap economies of scale
- Small domestic market
The results of FLEXICAST project will produce an advanced cast iron manufacturing methodology, with improved energy efficiency, and will allow foundry industries to reduce the high CO2 emissions and energy consumptions associated with their day to day activity and increase economic and environmental benefit. The FLEXICAST project will contribute to drive Europe in a reference and leadership position on the energy efficiency at the international level. The outcomes of this project will facilitate and encourage industry’s transition towards more knowledge-based production, which is an essential requisite for European industries in order to:
1) Increase the competence EU versus US, China and Japan
The need for developing and manufacturing high performance cast iron products at a competitive price is therefore mandatory. The worldwide increasing need of such products is having a direct impact in the penetration of China, India, USA and Japanese products in the world market and, particularly, in the EU market. For example, European construction equipment demand fell 40 % down, from 645.000 units (2008) to around 370.000 units in 2009. Also, agriculture machinery (tractors) fell about 15 % down, from 165.000 units (2008) to 140.000 units (2009) around. Not all markets have been impacted by the crisis pear in the same way: the worst were the most mature markets (Europe, North America, and Japan), while emerging discount narrowed more content or in the case of China, have continued even growth phase. Obviously, the current crisis continues downward trend. EU Trade Commission has confirmed that urgent actions need to be taken in an effort to protect European jobs. The outcomes of this project will improve the acceleration towards flexible, agile, smart and sustainable cast iron manufacturing processes. SME foundries will act as a full service provider and as a business network hub, providing customers (machinery manufacturers) with all the proximity advantages of local resources and service. It may lead to reduce EU trends towards or dependence due to benefits and capacity of remote low-cost country (LCC) outsourcing resources.
With Chinese wages rising at about 17 percent per year and the value of the Yuan continuing to increase, the gap between EU and Chinese wages is narrowing rapidly. Meanwhile, the results of FLEXICAST project will produce an advanced cast iron manufacturing methodology, with improved energy efficiency, and will allow foundry industries to reduce this gap. Therefore, Flexicast project will facilitate many partners increasingly competitive.
2) SMEs ability to take advantage of new opportunities
SMEs that are embedded in the global supply chains reliant on one or few key customers in most affected sectors are likely to be severely impacted when the larger companies, for which the SMEs are suppliers, undertake production reductions. Note that large companies are thinking in lean production. This means that large companies require to SME companies suppliers to quickly implement these strategies if they want to survive in the coming years. However, the crisis impact can also be considered as a driver for positive change and can help the SMEs to become more mature, efficient, and dynamic. Decreasing margins may push many SMEs to better utilize existing resources. For instance, there will be a need to implement new technologies in a more efficient manner to differentiate them and to improve production and service delivery processes. This in turn will improve their competitiveness.
3) Generate a knowledge-based cast iron industry
New materials, products, manufacturing, testing and monitoring processes need to be complemented by cultural changes. A strong synergy between technology, training and organisational factors is essential. Achieving this goal will invariably require new skills and innovative working ways, where knowledge can be shared, competence can be raised, and added value can be improved. Effort in this project will be invested into communicating the new technical knowledge generated in the different project activities to foundry industries (whether to SMEs, public or private entities) and other companies in the cast iron manufacturing sector. One of the major goals of the project is to ensure an efficient implementation and maximum impact of SMEs-related activities. Remember, FLEXICAST project consider that agile moulding and melting systems are imperative. They are required to enable the degree of control freedom for each other and especially for the automatic production control system. This way the control system can optimize the flexibility and economy of the melting process and use of raw materials and energy as well as the delivery of the tasks. The automatic production control system will be based on constantly changing optimization scenario. Conventional (order-by-order or batch-by-batch) scheduling is substituted with automated dynamic (casting-by-casting) control of the process.
4) Improved cast iron manufacturing processes and equipments with a substantial and measurable reduction in environmental risk and increasing public health features. Improve hazard control
Several conditions and trends pose challenges for emissions-associated environmental activity in the cast iron industry. First, regulations for all of emissions are increasing in stringency. Second, there is increasing customer demand for more highly engineered cast irons, with formulations which contain more precise quantities of alloying and/or coating elements and are less tolerant of impurities. This is a dual challenge for the recycling industry because there is now more material variation in process input , and there is less tolerance to variation in process output. This, in turn, creates separation challenges and potentially leads to higher levels of waste slag, the disposal of which is increasingly expensive. (Processes generally have three waste products: solid slag, liquid sludge, and particulate dust.). Finally, the number of process steps, process options, and associated potential waste or by-products lead to challenging system level optimization questions, such as at which process step to separate materials or remove impurities; whether to reduce, recycle, or engineer waste or by-products; and how to balance research effort between improving traditional dirty processes and developing cleaner new processes that may also reduce the number of process steps required. In addition to the emissions-related activities, there is also some work in energy efficiency, particularly in the cast iron manufacturing steps.
The purpose of the project is to provide specific information to those in the industry and others about the hazards in the metal casting industry and suggestions for controlling or mitigating them.
The purpose of environmental monitoring is twofold: 1. To measure the potential health hazards to employees. 2. To decide whether existing plant and process control measures are working efficiently. Improved cast iron manufacturing processes are essential for preserving the environment under different working conditions. The FLEXICAST project will propose a new cast iron manufacturing process, always keeping in mind the target of reducing energy and material costs, while increasing safety by minimising environmental risks.
5) Social factors
In general, most labour-intensive occupations in the gray and ductile iron foundries experienced continued workforce reductions since the1990s .The occupations facing the most substantial reductions of 30% or more included worker supervisors, plastic and metal machine workers, plastic and metal grinding machine operators, maintenance workers, electricians, and machine tool cutting operators. Other occupations facing reductions of 20 to 30 percent included fabricators, assemblers, hand workers, general labourers, precision workers, moulding machine operators, inspectors, welders, truck and tractor operators, and mechanists. The only occupations expected to gain employment levels were hand grinders and polishers. Unfortunately, social factors that may come to have a major impact on our future are demography, educational strategy and economical stability. The rapid decline in labour force has been well defined (fig 3.5)
The bottom line is that almost 31 % of the workforce in Europe is currently employed in the manufacturing industry, which means roughly 34 million employees or €1,550 million in value-adding activities. According to the Observatory of European SMEs, 93 per cent of all employees in Europe operate within companies with less than ten workers/employees, and over 120 million people are directly employed in the European SME sector (this value increases 61 Flexicast 6 July 2012 61 significantly if one adds the services around SMEs). Note that SMEs are usually suppliers and sub-suppliers to the larger companies, and that their competitiveness is fundamental for Europe. FLEXICAST project will include analysis in three areas in parallel:
a) Reactive Ergonomics
The reactive ergonomic component will investigate currently existing jobs by reviewing records, performing symptom surveys, evaluating jobs for risk factors, performing job analysis (i.e., integrated evaluation of process, productivity, and safety), and recommending redesign options as necessary.
b) Proactive Ergonomics
The proactive ergonomic component will be instituted to prevent work-related musculoskeletal disorders from occurring. The emphasis will be on efforts to incorporate ergonomics into the design of new processes, jobs, and workstations – designing operations that ensure proper selection and use of tools, job methods, workstation layouts, and process flows.
The safety component will be incorporated into both ergonomic efforts by the use of a group of tools, which will aid the process designer in evaluating their designs/options for hazards, as well as identifying existing hazards in cast iron manufacturing processes.
6) Green manufacturing impact
Green manufacturing is a first step towards sustainability. Sustainable manufacturing35 is defined as the creation of manufacturing products that use materials and processes that minimize negative environmental impacts, conserve energy and natural resources, are safe for employees, communities, and consumers and are economically sound. The FLEXICAST project will propose a new cast iron manufacturing process, always keeping in mind a successful sustainable business strategy. See figure nº 3.6. The problem is too large for individual companies to solve – must be a cooperative effort among industry, associations, and researchers.
Figure nº 3.6 Technologies that are covered by the project for sustainability According to our estimates and assuming that the results of the FLEXICAST project will be applied equally to EU global foundry industry, the benefits would be those listed in Table nº 3.3