Overcoming challenges in the foundry industry
Currently, The C.A. Lawton Co. and the industry as a whole, is being confronted by many challenges. As a small manufacturing company within the industry, I think we’re making great strides to overcome them.
There are two key challenges that really come to mind. The first of them is labor. Skilled tradesmen and women that want to work in a foundry or machine shop and dedicate years to becoming a master are hard to come by. Right now, there are more people that fit that description retiring than entering the workforce. Even general labor, people who come in for a year to a few years, are safe, and do good work are hard to find, and I think we can attribute that to the good economy. The unemployment rate is very low right now.
To overcome the labor issue, we brought in the teams from Puerto Rico. It’s a great win-win scenario. We talked about it in one of our other articles, but their country has been devastated by a hurricane, and the unemployment rates in Puerto Rico are at 80 to 90 percent. There’s no work. People have families to feed, we need good employees, so we come together and help each other.
It took a lot of work. This isn’t something we’ve done before. We wanted to get them acclimated, make them feel welcome, we had to get housing sorted and overcome obstacles. It gets tough when you’re already facing a labor shortage to be faced with more challenges that arise as you attempt to solve your original problem, but now that we have the guys here, it’s easy to see that all the effort we’ve put into this has been worth it.
Another way we’re tackling the labor issue is through outsourcing. Some of the toughest jobs are in the cleaning and finishing room. We’ve started working with a supplier in Ohio that isn’t traditionally in that business, but they do a lot of similar things, and we’re willing to try it out for us. Now they take care of a substantial part of our cleaning and finishing. This is a first for us. Usually, only in random busy peaks or emergencies do we have another place clean some castings for us, but it’s been quite some time since we’ve even done that. It’s also not normal in the industry, but not normal can be good. We’re all about innovation, and finding solutions, and this seems to be working for us.
For a while, we struggled to staff the core rooms, and that regularly held us up. Buying cores, outsourcing, is more normal in the industry, but not for Lawton. We haven’t done it other than every once in a while in a pinch in probably 15 years. We didn’t have a very good experience with it.
We run furan-based no-bake sand. The good places to outsource from run phenolic-based no-bake sand. If we introduce too much phenolic into our furan system, it starts to cause problems with the castings, so we don’t necessarily want to do that. But now we ended up working with one of these places who was willing to get us what we needed and carve out a cell to make furan cores, and now we’re the anchor customer for that business.
The next thing we’ve done is revamp training. Last year we did a kaizen on what we call onboarding, which is everything from finding folks who want to come here and work to training them and getting them started on their job. With this kaizen, we really upped our game on what we call orientation, asking the right questions, ticking all the right boxes, getting them to meet the right managers and see the right presentations and so on.
People were feeling really good. They got here and felt like everything was organized and whatnot, but when it came to training people to do their jobs, whether it be making cores or molds or something else, that was our downfall. It was so variable because if you came into a department that was well staffed and the supervisor had a lot of expertise in that area, or had a love for training, you got really good training, but it was random how that worked out because those things weren’t consistent across all areas.
In some areas, as long as you weren’t a safety hazard, and as long as your attendance was good, you would stay on. With this kind of situation, the people who are going to leave are the ones that are bored because they aren’t learning anything and can’t add value. Most of the time those are the employees we want to keep around. The ones that end up staying are the people who think it’s great that they can get paid to do nothing, and those are the kind of people we don’t want.
With that in mind, we started thinking about what we could do to affect retention, and improve training, and make sure we’re keeping the right people. What we did is we found two more long-term guys, one production and one in quality. We took elements of TWI or training within industry, which is sort of under the umbrella of Lean. We came up with our own “Lawtonesque” version of that. We’re putting together standard work, adding in a bunch of new things, taking a really hands-on approach, and so far, we’re seeing good results.
Doing this is important for the company itself. Our capacity goes up, quality goes up, we don’t have to remake parts because of errors, and we’re able to keep the good employees who want to learn. From where we were a year ago, everything is totally different, and that’s something to be proud of.
The second challenge that comes to mind right now is the global economy and the current political landscape. With the U.S. getting into trade wars with China and France, threatening tariffs, it has a positive effect in terms of the possibility of more economic activity domestically. However, its effects on the global market are probably not so good.
Businesses in the U.S. might pick up more market share of a smaller market, but at the end of the day, you’re not doing any more total work. Until conflicts like these get resolved, our customers like some degree of certainty about the lay of the land. When things like this come up, they get a bit uncertain and hold off from buying. They want to see what happens with this policy or that election. That makes sense, but while they’re doing that, projects get put on hold or pushed out, and this is a real challenge for the businesses that serve them.
Also, from a raw material standpoint, this level of uncertainty can mess with the supply chain. Lawton is usually a small part of a larger supply chain where our products go to our customers and then on to end buyers who might have another whole supply chain for the end products they manufacture. Issues with trade result in a lot of complications and delays in the supply chain; the cost can be affected, and the rate at which companies like us receive raw materials can slow way down.
According to CNN, electrical machinery and metal manufacturers are among the industries that have been most significantly impacted by the recent trade wars. However, despite this, I think there are more opportunities for metal manufacturing companies today than there were before.
There are fewer companies like ours, but there’s also less labor, which means less capacity to meet demand. But there is demand, there is opportunity. To take hold of these opportunities, we must overcome these challenges. To do so, this sometimes involves reconstructing supply chains, a great deal of analysis of the situation, and continued exploration of new options.
As a company, we are all about continuous improvement. Having that at our core allows us to be fairly successful at overcoming these obstacles.
“Five Things Every Wisconsin CEO Needs to Know About the Future of the State’s Workforce.” St. Norbert College. Accessed August 09, 2019. https://www.snc.edu/sync/newsletter/2018/fivethingsforCEOs.html.
Henderson, George. “The Impacts of the Trade Wars on the US Shipping Industry.” San Francisco, CA Patch. July 17, 2019. Accessed August 09, 2019. https://patch.com/california/san-francisco/impacts-trade-wars-us-shipping-industry.
“Wisconsin Manufacturers Respond to Growing Global Trade War.” Husco. August 23, 2018. Accessed August 09, 2019. https://www.husco.com/husco-news/wisconsin-manufacturers-respond-to-growing-global-trade-war/.
CEO Alex Lawton has over 15 years of experience operating businesses as an owner and executive. Now with oversight of not only The C.A. Lawton Co. but also Temperform and Damascus Steel, that experience is being put to work across a growing platform of metal-casting businesses.