Smart Planning Leads to Project Success

By Jerry Senk, President, EMI Inc.
April 2018

Article Takeaways

Create an internal “investment committee”
Develop and stick to a specification
Convey a clear procurement process
Support your vendor and sub-contracts with internal resources

This case study explores the process and steps involved with sourcing, vetting, specifying, and executing a complex foundry equipment installation. This article will offer some basic recommendations we learned while working with a customer in their green sand mold line expansion. These process steps can be applied to any custom equipment your business may be considering, but is focused on the unique challenges faced by today’s modern foundry’s that may be considering molding, core making, or automation expansions.

Today’s modern foundries must evolve from the dark, dirty, and noisy ancient industry of yesterday to bright, clean, safe, technically advanced metal casting facilities. Your customers will see value in a technically advanced and well-organized foundry and you’ll have greater ability to attract today’s younger workforce. This case study starts after our customer made the commitment to reinvest in their foundry to accommodate newly won business and stay relevant in order to attract future business. The evolutionary points made above were the foundation for this foundry to make substantial investments. Obviously, this story starts well before our involvement, and reasoning and rationale for such investment could be its own case study. The case study will focus in the early stages following the customers investment commitment.

ASSEMBLE YOUR EXPERTS

First, it’s important to create an exploratory committee staffed by representatives across all business perspectives. This is an important consideration to insure all aspects of the business is suitably represented and normally would include; ownership or executive leadership, finance, engineering, operations, sales, and maintenance. Besides the expertise each department brings to the process, the creation of the exploratory committee has benefits of inclusive outcomesproviding a sense of importance. And, inclusion brings enthusiasm and ownership to the entire process and project outcome. It’s important to staff this committee with respected representatives that work well together and understand the business goals. Keep in mind that too many distracted or opinionated team members will slow your process down and could add unnecessary confusion to the execution of this first and necessary stage. Choose your team members wisely.

Secondly, it is important to create a goal statement, or think of this as a project mission statement. A succinct and clear mission statement can help to keep your project clearly defined and helps to avoid project creep. Ownership or executive leadership need to manage and keep the focus on the need at hand. The project mission statement should lead to the development of any new equipment and plant improvements. Ask these questions: What is the desired product outcome? What is the productivity expected? What flexibility needs to be considered for the future? What is our timing? What is the budget? Engaging your exploratory committee – which is re-titled to investment committee- with these high level needs will set the stage for the first meetings with potential solution partners.

Advise from the customer – “Developing the proper team and working to align the mission statement precisely to the investment commitment proved to deliver our project on time and at budget.”

THE CONSULTATION

Before proposals or layout drawings are created, conversations about your project mission statement needs to be reviewed with capable vendors. This will be a review of current needs, future expectations, site challenges, and budget expectations. Fortunately for the foundry industry there are plenty of good suppliers that can address their needs. Preliminary due diligence should be conducted to insure the group of vendors are fully capable and have expertise in the areas of interest.

Cost is not even a motivating consideration at this early stage; but gaining an understanding of the vendors design capability, staffing resources, financial strength, and history of success should be the main points of consideration.

In this case the investment committee made a final cut from four separate potential vendors down to two potential solution providers based on the prime qualifications described above. Thorough due diligence in the early stages of qualification maybe time consuming, but will offer substantial benefits in time and controlled total cost. By narrowing the field to qualified providers that met these prime qualifications the customers investment committee can more precisely focus on partnering with the best suited solution provider.

NEEDS ANALYSIS & DOCUMENTATION

The next steps in a well organized and executed vendor qualification process requires the investment committee to consider what has been learned throughout the consultation phase with all potential vendors and creating a clear and concise specification. Its very likely that new ideas that were not part of the original thinking are open for discussion and inclusion to the final design and supply plans. The investment committee needs to craft a statement of specification that includes the obvious needs of the project. This paper won’t dig into the details, but it’s obvious to state casting needs, appropriate production rates, re-use of existing equipment, timing expectations, available areas (with plant layout drawings), available utilities, and a single point of contact.

A single point of contact or procurement manager can help alleviate distraction amongst the investment committee. By assigning one person as the primary contact, a layer of control can be implied that helps keep the vendors on task with little confusion. As equally important, this allows your investment committee members to focus on their daily support roles for the foundry; not be distracted with routine project questions.

Advise from the customer – “Assigning one person as our single point of contact helped to insure our successful outcome – we controlled vendor communications which eliminated project confusion and helped our team get the outcomes we expected”

SPECIFICATION REVIEW PROCESS

Once the specification has been approved by the investment committee, distribution to the selected final solution providers occurs. The vendors will require some amount of time to review and assemble their team as they find appropriate. It’s suggested to have a followup site meeting to restate objectives, review expectations, answer questions, and (for existing plant upgrades) walk the area.

Each vendor should be invited to their own specification review meeting. While this can add time to your process, it does offer more open and transparent conversations between the vendor and your project team. Review meetings that include multiple competitors present a risk of low engagement and ultimately will add to the time frame any vendor has to thoroughly understand your specification and needs.

In some cases, and depending on the level of documentation the foundry has, the vendor company may be required to conduct their own plant layout drawings, existing equipment discovery and identification, and utility analysis. Be sure to leave time in your schedule based on the site needs and the project details.

PROPOSAL SUBMISSION

A thorough proposal should include a well-prepared layout that leaves no future surprises that may unfold during the course of the project. Typically, during the development of the firm proposal, several iterations of layouts are produced and presented for review. A clear proposal will obviously state what is included, but as equally important is to request a detailed list of what is not included or the buyer’s responsibilities. The buyer’s responsibilities will add clarity to the complete scope and help insure that vendors proposals are as close to an “apples to apples” comparison.

With custom foundry solutions, its nearly impossible to have an apples to – apples comparison, but understanding the included scope and the buyer’s responsibilities will allow your project committee the ability to understand what is, and what is not acceptable based on the costs of each offer. Consider conducting a “proposal page turn” with all stakeholders. This is a convenient way to review the entirety of the proposal and answer any questions that may develop.

Other commercial or technical considerations that need to be considered are:

Warranties and guarantees need to be understood and statements about expectations should certain specification requirements not be met.
Terms of sale or progress payments need to be fair to both parties.
Clear acceptance of vendor terms of sale or purchaser’s terms of sale more than likely will need some legal review.
Change order expectations – change happens, have a good understanding of the process involved to manage changes.
Installation support and various field needs – think through the level of support the vendor needs to supply. This can range from full turnkey installation to simply supervising at installation. This is all dependent on the project complexity and the foundry’s competency.

Case Study Note: As our case study details, this relates to an existing foundry upgrade project and working to rearrange an existing plant layout by adding a new automated green sand molding line with necessary support equipment. Working within the limitations of existing equipment, sand systems, conveyors, shake-out all had to be measured and documented. By taking the time to thoroughly document the existing plant in 3D provides both the vendor and the foundry the ability to accurately see how the new equipment will interface (or potentially interfere) with existing equipment and building. These steps should be eagerly conducted by the vendor company as this will only help to convey design concepts and features about their particular solution.

Advise from the customer – “We’re all familiar with 3D models, especially when it comes to the products we cast. But operating in the 3D space with our foundry and equipment really helped us to conceptualize various options. We’re convinced that the 3D capabilities used by EMI helped us develop the most economical and flexible installation.”

PROJECT AWARD, KICK-OFF, AND EXECUTION

The project award process will vary company by company, and this paper won’t begin to entertain negotiation tactics. After award, it’s time to start. Suffice to say, that the project kick-off is the exciting part for all parties involved. It ends weeks or months of investment committee meetings and conversations of intangible understanding and gets down to the reason this all started in the first place, execution and delivery of foundry equipment and construction.

A well-orchestrated kick-off meeting will start with review of the vendors Gantt chart. A Gantt chart provides the measuring stick of the vendors progress throughout the project. It helps both parties identify pending obstacles that may impede delivery success and provides an ongoing basis for project review and update sessions. Gantt charts need to address the involvement of any outside contractors. In many cases, basic sub-contractors such as; electricians, riggers, foundation or concrete, civil engineers, and others are part of the project. Maybe the contracts are let through the procuring company – that’s certainly common practice, but who is responsible for schedules and who is the liaison between all parties. The Gantt chart can provide some guidance for each sub and helps insure they are ready to support the projects timing.

Throughout the execution of any project, especially complex mold line projects, changes should be expected. Work closely with the vendor to understand why the change is necessary, clear and firm costing, and impact to schedule. Change order management is very important and helps avoid cost over-run.

Depending on the scope of the project, the foundry may have certain tasks to accomplish before equipment arrives. Its critical that both the foundry and the vendor’s project managers are in constant communications about schedule and problem resolution. New challenges are expected to be encountered; having an open dialog and swiftly addressing these potential problems can help mitigate cost and work to keep the overall project on schedule.

Prior to delivery of the equipment, its common practice to complete an in-factory run-off or acceptance test. Here the vendor will simulate operation of the equipment to their best ability depending on the size of the equipment and available factory space. In most instances today’s foundry equipment suppliers are fully capable of supporting factory run-offs. During runoff the procurement team has an opportunity to observe the operation and fully learn what to expect at time of delivery. Here final questions can be answered, installation contractors can participate and learn what to expect at delivery, and even slight modifications can be affected. It’s always easier to make changes in the equipment vendors shop rather than the field.

Installation support, as described in Proposal Submission, will be uniquely orientated to the project at hand and the foundry’s capabilities. In the simplest form, the vendor should provide Field Engineering support during some of the more complex installation tasks. This helps insure contractors are installing to specification and will help to control time, damage, and cost over-runs.

After installation is complete, the project will advance to the commissioning phase. Here the equipment will come to life and is the last phase of the widely anticipated day.

Depending on the complexity of the project, the commissioning phase could range from several days to many weeks in duration. The foundry support team should have staff members assigned to “shadowing” the vendors startup team. By investing the foundry to this process, knowledge and understanding is quickly learned that will be of enormous benefit for the long term operational success of the new equipment.

As the project winds down, be sure to keep an agreed Punch-List of tasks or topics that need to be corrected before final acceptance is issued. There’s always some items that need to be resolved, but the foundry should be diligent at documenting agreed to topics. Final acceptance provides the assurance to the foundry that all technical and commercial aspects are accepted and focus on efficient operations of the machinery is the next ongoing responsibility.

THE SUCCESS STORY

As we’ve referred to throughout this suggested process description, these steps were executed by our recent client and EMI to deliver a well-engineered and cost effective automatic green sand molding expansion. This was our clients first automatic molding system and working it into the constraints of the existing foundry operations proved challenging.

The foundry followed a clear process and engaged many members of the management group to make certain all needs of the business were addressed. Throughout the consultation and proposal stages, EMI was able to offer suggestions that helped to lower the total installation cost and shorten the overall time frame. EMI worked successfully to deliver a system comprised of new and re-furbished equipment that met stated productivity goals at less than half the cost for comparable new equipment.