Methods to Reduce the Prices of Metal Castings

With the global economic crisis, reducing prices and production costs have been paid more attention for the buyers of metal castings, such as iron and steel castings. According to our experience in Dandong Foundry in China, we suggest the following methods.

1. Negotiate prices with your suppliers.

If you think some suppliers are qualified, and you like them, but their quoted prices are higher than others, then you should let them know your target prices, and give them a chance to consider if they are willing to meet your target prices.

In the same way, if the supplier like you and believe that you may be a good customer for them, then they may be willing to reduce their profit to produce some metal castings for you.

2. Bypass intermediate links of purchasing.

Purchasing directly from metal foundries will effectively reduce the prices. However, I am not saying that trading companies are useless. Many good trading companies are helping their customers to purchasing iron and steel castings from China.

3. Light weight design.

If you are the designer of the metal castings, you could try to reduce the unit weight of castings. The unit weight is the base of price, so if you could reduce the weight, then you will reduce the prices. Normally, you could try to reduce the wall thickness or increase the hollow areas. Of curse, the strength of casting parts should be met.

4. Clarify and reduce machining works.

Sometimes, the drawings can not denote the machining works clearly, so the buyers should clarify or denote them. Otherwise, the suppliers may increase the machining works, and so increase the machining costs.

Moreover, as for some unimportant surfaces and positions, if some flatness and straightness is allowable, the buyers should consider to keep them as cast.

5. Choose suitable casting process.

There are many metal casting processes, and different casting processes will cause big difference to casting prices, so choosing the suitable one could effectively reduce the prices. Talk with your suppliers and learn about what casting process they will use, and consider if could use cheaper one.

Normally, the manufacturers will use the suitable production methods considering your requirements and their production conditions, so choosing by you is also important.

6. Choose suitable materials and grades.

Some designers may choose the higher material grades to guarantee the reliability of casting parts, however, higher material grades and requirements will cause higher production costs, so suitable grade will be more economical.

The buyers should check if lower grades could meet the application if the high grades have increased the costs largely.

7. Lower your some requirements at certain level.

In other to keep high quality, some clients may have some high requirements to the surface quality, defects requirements, special surface coating, painting and packing requirement, and also some inspection works. If you really think these are necessary and are willing to pay for them, then it is ok, however, if some are not important for you, please try to lower your requirements with them. All these works will be considered during price calculation, and if your manufacturers could not do them in house, then the production costs will become high when they entrust others to do.

8. Reduce preliminary investment to investigate suppliers.

You could check the website of your suppliers, and ask any question to them. In this way, you could know that if they are professional and reliable. You also could learn more about them during making samples and small batch production in the early stage.

Only if you are a very large company, and you are very rich, otherwise, it is unnecessary to invest lots of money for visiting and quality investigation to the manufacturers. Most of metal foundries have similar production equipments and administrative level. Even some foundries are small, it not means that they can not produce some casting very well. Although some foundries are very large, it does not mean that they are suitable for you either.

Only samples and POs delivered one by one could prove that if they are qualified. Of course, you should pay attention to cheaters and liars.

9. Reduce defective rate during finish machining.

Sometimes, the buyers may eliminate a potential supplier just because their quoted prices were 5% higher than others. However, when you receive 10% or 30% defective casting parts, you will understand that the 5% higher prices are reasonable.

Some clients will do the finish machining by themselves, so the defective rate during your finish machining stage will be inevitable. Therefore, your suppliers should have enough inspection capability to control the quality of delivered castings. Asking your supplier to do the rough machining before delivery will be a good solution.

10. Reduce the numbers of your suppliers.

If your supplier has produced several types of metal castings, then you should entrust them to produce more types for you. It is easier to negotiate prices with your existing supplier, and they could accept lower prices and smaller orders in order to keep producing your other profitable products.

As for the new suppliers, although they may quote lower prices, but their capability and quality may not be as good as your current.

Moreover, fewer suppliers will reduce your costs for quality inspection, sea freight and long-term cooperation.

11. Pay attention to the change of pig iron costs.

Pig iron prices have directly influence to iron and steel casting prices. The buyers should pay attention to the change of pig iron prices, so you could understand when your suppliers may request price adjustment. In our website, we are updating pig iron, cast iron and cast steel prices timely.

12. Help your suppliers to clarify technical issues and solve problems.

If your supplier asks many questions for the detailed issues, you should try your best to help them for the clarification. This action will not only help them to improve quality, but also could reduce the unnecessary production costs.

For example, if there is a dimension in the drawing, its tolerance is +/-0.2 mm. Ok, your manufacturer can only guarantee +/-0.3 mm, so they will have to machine it. Therefore, they will have to increase its machining cost. If you could help them to clarify it with your end user, or final client, maybe +/-0.3 mm could be acceptable if it will not affect the assembly and application. Finally, the price will be reduced because of less machining works.

SUMMARY

Many clients and buyers thought the best method to reduce prices was developing new suppliers, and choose the supplier with lowest prices. This method is workable if your suppliers are making the same parts and they have the same quality. However, making metal castings is not a simple work.

At quotation stage, all suppliers will promise that they could produce your castings very well, however, you should check if they have considered and understand all your requirements. Moreover, if they have capability to keep the quality consistent and stable. Always, cheaper will mean something.

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