Five Challenges for the Die Casting Sector
Thanks to their inexpensive and efficient processes, companies offering die cast products are in a good position to gain new market share in the coming years. However, the journey is not an easy one - there are five challenges for companies to overcome.
1. Technological Transition
Technological transition is both a challenge and an opportunity. Digitalization is also progressing in the die casting sector with the trend heading towards the networked foundry 4.0. This has certain implications: Thanks to the constant flow of data, foundries gain a deeper insight into their daily production process. If carefully analyzed, these data help to identify critical steps in the production chain where time or energy are wasted. Furthermore, foundries can skip some time-consuming and resource-intensive steps by using simulation software instead of a trial-and-error process to design efficient molds. Finally, additive manufacturing helps to produce complex tools and molds quickly or as a sensible alternative for processing small orders. The choice of an appropriate technology requires a lot of attention and some investments.
Europe's ageing workforce is another problem. From the simple worker to the chief engineer – the pool of good candidates shrinks with each year of graduates entering the labor market. At the same time, the way foundries work will change. Digitalization means that employees need to work with computer systems at the production level. Employees have to know what data their equipment is supposed to deliver, and they need to be able to document their work. The working day will be less determined by heat and more by bits and bytes, yet it will remain a physically strenuous work. There will be fewer changes for engineers. The industry will probably be able to employ more of them, but it is not sure whether the universities can offer enough graduates. Ultimately, a well-trained and capable workforce will be the key to the industry's survival in Europe and the USA.
3. Changing Customer Requirements
The automotive industry and its suppliers are by far the largest customers of European foundries and they want foundries close to their own plants. However, other sectors such as mechanical engineering and household goods remain strong in Europe and are important buyers of cast products. However, significant changes are imminent for automobile manufacturers. The end of the age of combustion engines is in sight. Foundries can be a partner in this process as they have the necessary know-how to develop light car parts. At the same time, European manufacturers are at risk that future cars with less complex engines and gearboxes will be built elsewhere by cheaper labor.
Concerns about man-made climate change and limited resources are particularly important aspects for foundries. Foundries are far ahead when it comes to recycling: At the end of a life cycle, metal castings can usually be recycled into new castings. Foundries thus ensure that valuable resources are not wasted. Even the sand is recycled. The disadvantage of the industry, on the other hand, is its high energy consumption, which is unavoidable up to a certain point. Nevertheless, there is still room for more energy-efficient production when the pressure of public opinion increases.
5. World Trade
For the past 25 years, all signals have been in favor of free trade. The global economy is more interconnected than ever before. But the climate has changed, and the specters of protectionism are back. The trade conflict between China and the US could lead to a recession or at least some major disruptions in the global trade chain. Supply chains could be disrupted and prices for raw materials, logistics and finished goods could rise significantly. Flexibility will be necessary in both purchasing and sales.