This is a collection of short stories about customers and the reasons they no longer will purchase from a low cost country …
CASE STUDY # 1 – Stainless Steel Valve Body
An Alberta, Canada based manufacturer of valves and related equipment had settled on a newly designed investment casting to replace what had been a 3 piece weldment. During our price quote follow-up after receiving their drawings which had been sent out for bid, we were informed that an “Alberta based investment caster” was the winning bidder, based on not only price, but a promised delivery much faster than ours. Even though we engaged in dialogue with them that centered on the fact that there were no domestic investment casting manufacturers in Alberta, we eventually lost out and did not hear back from them for over a year. When we did hear back, they admitted they were tricked by a broker of Chinese castings falsely claiming to be a local manufacturer, and that they never did receive any castings from them. Now they were in trouble, and we were pleased to be able to step up and assist them now. Within 6 weeks, we not only had sample castings in their hands, but because of our ability to utilize 3D solidification modelling and unique ceramic coring, we proposed some design modifications that allowed them the opportunity to make their new line of product even better while reducing its weight. The popularity of their new valve took off, and the customer realized our price was exceptionally fair for what they received. Today, we proudly manufacture several more lines of this casting for them.
CASE STUDY # 2 – Pump Impeller
A pump manufacturer from the Eastern United States had been a long-time customer, but an aggressive new buyer decided it was time to move some of the casting procurement to China. One of the items that was moved was an 8” diameter stainless steel impeller, used in a very common type of centrifugal pump. After agreeing to allow the Chinese foundry to provide the lost wax tooling required at no cost, our former customer purchased castings from them for almost 2 years. One day, one of their customers in a chemical processing plant in Texas complained that, although the environment was very harsh, some of their impellers were failing well before they should have. The pump manufacturer investigated and found that while their company name and their correct part number appeared on the failing castings, they were not the same impellers that they were purchasing from their Chinese foundry. Chemical analysis demonstrated that the chemistry of the failing impellers did not meet the alloy specification of the stainless steel. After approximately 3 months of investigation, they were able to determine that their LCC foundry “sold” their impeller design to an aftermarket “pirate” who was in turn manufacturing the same impeller elsewhere in China, but didn’t even bother to remove this customers name and part number from the counterfeit product. Hence, inferior castings with a well respected pump manufacturers name on them were making their way into the market. The customer realized the ongoing risks of doing business in LCC since they discovered this happens more often than not, and returned to Niagara Investment Castings, once again entrusting us for the supply of certifiably compliant castings. Further, to help regain confidence in the market, they asked us to provide chemical and mechanical certifications with heat numbers mechanically engraved onto each part. Finally, while it is a common sense policy that we always protect our clients’ best interest and their product designs, we also asked to enter into a Non-Disclosure agreement with them, effectively ensuring we were committed to protecting their intellectual property.
CASE STUDY # 3 – Burner Nozzles
A small shop in Ontario is in the business of manufacturing heating equipment. After many years of our providing a high quality casting in carbon steel to them, a locally based, English speaking sales representative for a Chinese foundry showed up, and was successful in getting the chance to bid on the same casting. To nobody’s surprize, the price came in less than we could manufacture the casting for, and a difficult decision was made to place the next purchase order with them. As the owner explained to us, he ran a small company and every penny mattered, so how could he NOT try them out … at THAT price ?? Within 6 months, a sample part arrived, and seemed to work well in the application. The first order arrived approximately another 6 months later. As it was a casting that was not required typically more than once per year, the time between orders was already fairly long, however the recession that hit in 2009 meant our former customer did not need to place an order for almost 2 full years. In 2011, a phone call to their local sales rep for the Chinese foundry went to a disconnected phone line …. another casualty of the recession. After days of tracking down somebody at the actual factory in China who could stumble through the English language, he was able to let them know he was ready to place another order for the castings. However, this time, the price had risen considerably. Our former client was told the yuan had risen, rebates for Chinese manufacturers had been revoked, and labor costs were rising with the improvement in the worldwide economy. His delivery was also extended to 8 months. Around this same time, this owner ran into us at one of the local tradeshows we do each year, where we were running a video about our newest cost saving technology …. shelling robotics which we had installed over the past year. We were pleased he stopped by to chat. We discussed the robot and other new technologies we had started to bring in, telling him that we had been determined to get our manufacturing costs down. Our old client told us this story of his problem with his LCC supplier, and thought best to have us quote the casting once again. With our cost reductions, this time our price was almost identical to the latest price from China … but without the expensive shipping costs, long lead times, and communication difficulties. Not only has this customer come back and remained with us ever since, we have helped him to grow his business by taking advantage of our rapid prototyping service for several new projects he has been doing, giving him prototype castings in under 4 weeks …. something he made sure he told us was ANOTHER thing his former Chinese supplier could never offer.