Newsletter - Winter 2005

President's Message | Estimating Casting Prices at PPCP | Zircon Materials and the Sorldwide Shortage | PPCP United Way Campaign

A Message from Our President, Richard L. Miller, Jr.

‘Tis the Season . . .

‘Tis the season when the days are getting shorter, the nights are getting longer and the temperatures are dropping week by week. Those of you who know me, know that I don’t prefer cold and snowy weather. Given my choice, we would have summer all year long.

‘Tis the season to look forward to special times with our families. In many cases, if it were not for the calendar turning over to December, we could go year after year without spending time with some of our family members. I thoroughly enjoy the opportunity to get “caught up” on what’s been happening with my extended family members during these special family times.

‘Tis the season for shopping. Certainly, PPCP is not in the retail business, but this time of the year when so many who are out buying that special gift for friends and family help keep the economy strong and in the long run, provide business for those of us who are in the manufacturing sector of the economy.

We are grateful for a strong year in 2005. Both our shipments and bookings will be record years for PPCP. Despite excellent volume, between cost pressures and some self-induced operational difficulties, our margins have been squeezed. We will collectively be looking for ways to see the high volume continue as well as improve our margins in 2006. We are looking forward to the cost system which is nearing completion to be a major tool in achieving this goal.

Finally, ‘tis the season to remember the reason that we celebrate Christmas at all. It seems that all around us, there are forces attempting to remove the fact that we celebrate the advent of the Christ child over 2000 years ago from our holiday. As for Vohnie and myself, although we enjoy the time spent with our extended family and the haring of gifts, what we truly want this time of year to be is an opportunity to share with others our faith in that little baby born so long ago.

Merry Christmas and a Prosperous New Year.

Dick Miller

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"We are grateful for a strong year in 2005."

A Message From Our VP of Sales Alan Ottinger "Estimating Casting Prices at PPCP"

When you have a part that you believe is a candidate for investment casting, how should you proceed to obtain optimum pricing? There are a few simple steps that can facilitate the process for all concerned:

Drawing: a finished machined drawing is essential so we know how the part will ultimately look. In some cases even an assembly drawing is beneficial to provide us with a clear picture of the overall scenario and permit us to offer suggestions (e.g. the possibility of combining two or more parts as one integral casting). A dedicated casting drawing is not required and best developed after collaboration on the design. Electronic drawings are the preferred mode, whenever possible, but we can begin working with hand-sketches if that’s all that’s available. If the weight of the part is known, please include that for our convenience. If not, we’ll estimate it, but the more accurate the weight, the more reliable the price.

Alloys required: this will influence tool design, our foundry practice and ultimately the pricing. If uncertain about the alloy, let us know details about the application and we can suggest some ideas. One advantage of the investment casting process is that multiple alloys may be poured using the same tooling without significant dimensional variation. Multiple alloy identification tool inserts may be made in order to minimize confusion.

Quantity: both release quantity and estimated annual usage is helpful. We realize that often this information is not readily available, especially for new designs. Provide us with your interest is primarily order of magnitude: 10, 100, 1000, 10,000 ... variations within those ranges don’t significantly impact the price (e.g. from 25 to 50 pieces, except possibly for very large castings).

Testing, certification, applicable specifications: let us know any applicable requirements of which you are aware. For a better understanding of this aspect, it’s best to discuss your application with our engineering or quality personnel. They can assist you in determining the most cost-effective solution for your situation.

Secondary operations: let us know ‘the next step’ that will occur with the part. This is helpful in our understanding the application and ensuring no duplication of efforts which could result in unnecessary costs. In some instances, we may be able to provide this service, thereby eliminating your need for additional handling.

With the information indicated above, PPCP can establish appropriate pricing. Casting price is ultimately determined by the costs involved, both direct and indirect. Direct costs are the simplest to determine; they include materials, labor and any subcontract costs required to make the casting.

Materials not only include the metal in the casting, but also the materials required to make the casting. These costs typically are directly proportionate to the weight of the casting. Material costs will also include ceramic cores and any other specialized materials required to produce the casting.

Direct labor is estimated based on our prior experience with similar castings. PPCP has recently implemented a job cost tracking software which will enhance our ability to more accurately determine this aspect of the process.

Indirect costs include all costs that are not directly assignable to specific castings, typically considered overhead. These costs are beyond the scope of this article and directly influenced by the customer.

In summary, you as the customer, can assist in ensuring that casting prices are accurately determined, in a timely manner, by providing accurate and reliable information and interacting with our engineering personnel. In this way, we can determine the optimum casting design and process in order to achieve the most cost-effective casting price. Please contact our sales or engineering personnel if you would like any more information on this aspect of our operation.

Alan

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Zircon Materials and the Worldwide Shortage

The investment casting process is one that relies heavily on raw commodities. At PPCP we convert raw materials into investment castings that can be used in a wide range of applications. It becomes very challenging when a raw material is suddenly in short supply.

This is the very challenge that the investment casting industry faces today. A key part of the investment casting process is building a ceramic shell around the wax patterns and sprues. Later, the wax and sprue material are burned out leaving a hollow ceramic mold to pour steel into.

The first coats of liquid ceramic and sand are the most important for determining the final finish of the investment casting. The material that is used extensively industry wide is zircon.

Zircon is an element that is mined from the earth. In the United States there are only 2 major mining operations that yield zircon. The largest of the mining companies has announced that the yields are down and that they will be shutting down the mine in 2007. Already investment casters have felt the pinch. We are only able to obtain roughly half of the zircon material in 2005 that we purchased in 2004.

How does an investment foundry deal with the fact that a critical material is suddenly on short supply? PPCP has worked very hard with suppliers to test and trial alternative materials to zircon. We have engaged in testing steadily over the past 6 months and will continue to do so for the foreseeable future. With sales volume up this year, conserving a scarce commodity has been a real challenge. As can be expected, with a shortage of the material, the prices to purchase zircon have skyrocketed over the past year. We are paying over 50% more for the material than we did one year ago.

PPCP has been able to continue to provide sound castings with acceptable surface quality despite the shortage of zircon. We are still using zircon extensively for the face coat of liquid ceramic (or slurry) and often for the first sand application (stucco). We have found that the alternative materials work very nicely as a second primary coat material.

We are convinced that we will be able to discover means and materials to continue to deliver a quality casting to our customers in the years ahead. We may not be able to rely on the tried and true materials that we have enjoyed in the past, but we will certainly be on the cutting edge of technology that allows us to produce high quality investment castings.

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"How does an investment foundry deal with the fact that a critical material is suddenly on short supply?"

PPCP United Way Campaign

The 2005 PPCP United Way campaign was once again an amazing success. This past year marks yet another year in which PPCP employees exceeded our lofty goal for giving. PPCP set a goal of $10,000 and were pleasantly surprised when the contributions reached $11,855.00. Four of our employees contributed over $500.00 and were added to the “Join the Leader” group for 2005. These four employees will be taken on a tour of a Lebanon County United Way Facility and be treated to a meal later in the year. We want to thank each of the employees who contributed to this worthy cause.

PPCP United Way Campaign kicked off on October 18th with employee meetings followed by a catered meal for all shifts. In late November, PPCP United Way incentive gifts were distributed to all PPCP employees who contributed. Amongst the PPCP incentive gifts were five one hundred dollars. The winners were:

1) Jaclyn Manz 2) Storm Espy 3) David Burton
4) Nancy Negron 5) James Hoffer

PPCP would also like to thank all of the suppliers that were willing to donate prizes to help make our campaign a success. These suppliers are listed below:

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