Challenge: Our customer would order the castings and have them ‘drop shipped’ at our machine shop. Then the customer would place an order with us to machine the castings. This supply chain process had some inherent problems. First, castings have a long lead-time. Then, the casting order was large, yet the customer would only need a few machined or finished parts. A third concern was the debate over which company would own and carry the casting inventory. Originally our customer carried the inventory; however, over time the customer wanted us to take full responsibility of ordering the castings and carry any stock casting inventory. Last but not least, when casting quality issues would arise then it was never clear if resolving the issue was our responsibility or our customers’.
Solution: In our new process we would elect to make the parts from a common and readily available 17-4 PH Stainless Steel bar stock; totally eliminating the casting process.
Result: Every time we produced these parts we incurred one or more of these special issues. Consequently we investigated some options and ultimately recommended a blue print change allowing an alternate material (bar stock). In our new process we would make the parts from a common and readily available 17-4 PH Stainless Steel bar stock – totally eliminating the casting process. As a result, we could offer the customer shorter production runs with less lead-time and reduced the cost by almost 15%.