FOUNDRY EVALUATION:12 STEPS TO HELP YOU DO IT RIGHT

A foundry's ability to consistently provide a fair price, reliable deliveries, excellent quality and responsive service is dependent upon its performance in twelve areas. We strongly recommend these factors be considered when evaluating your existing and potential casting sources.

STEP 1: CONDUCT AND ENVIRONMENTAL AUDIT

Is the foundry in compliance with the updated water, air, and solid waste disposal regulations and standards? When was it last inspected by EPA and what were the results? Are all permits and reporting requirements current, such as NPDES, MSDS, SARA Sec. 313 Form R? What are the solid waste disposal costs projected to be in two years? Does the foundry have the commitment and financial strength to make the substantial capital investments in pollution abatement equipment. Is that commitment being demonstrated by installing environmental control equipment? Has a site inspection been conducted by a professional environmental engineer?

STEP 2: DETERMINE DEPTH OF MANAGEMENT

Is there a succession plan? What will happen if a key manager is incapacitated? Is there sufficient management horsepower to manage all the new governmental compliance activities, state-of-the-art equipment installations, introduction of advanced quality and production system, and human resource development without jeopardizing the foundry's performance in offering a fair price, reliable deliveries, responsive service and excellent quality?

STEP 3: EXAMINE THE FOUNDRY'S CAPITAL EXPENDITURE AND INVESTMENTS RECORD

Are they reinvesting in their own business and developing strategies for the long term, or simply maintaining wages until the Chairman retires? By not replacing worn machinery and investing in technology, a foundry is in a state of liquidation-intentional or not.

STEP 5: REVIEW PRODUCT LIABILITY INSURANCE

Don't settle for a simple "yes" answer--get a copy of the foundry's policy to make sure it is for more than minimum (and possibly insufficient) coverage.

STEP 6: REQUEST A FULL FINANCIAL STATEMENT AND ANNUAL REPORT

Has the foundry you are considering published its earnings or paid dividends lately? Solvent companies are proud of their accomplishments and should willingly share this information.

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STEP 7: DETERMINE REAL ESTATE VALUE

Marginal operations sitting on millions of dollars worth of property are sorely tempted to sell out and head for Florida. Is the foundry worth more dead than alive?

STEP 8: CHECK CREDIT AND PAYMENT HISTORY

Ninety-day payers with little or no real borrowing power may have trouble keeping up with the financial demands of your projects. Talk to the foundry industry suppliers.

STEP 9: DETERMINE SIZE AND FINANCIAL ABILITY FOR HANDLING AND FINANCING LARGE ORDERS

Can a foundry handle a big job--or even many small ones? Can they provide "just-in-time" delivery? More importantly, can the foundry generate the additional working capital required to meet the demands of an expensive project?

STEP 10: CONDUCT A QUALITY AUDIT

Have your quality control people reexamine existing sources through a formal audit. Is there a lack of technical depth and controls or an inability to assimilate SPC techniques?

STEP 11: DETERMINE THE RELATIONSHIP BETWEEN MANAGEMENT AND LABOR

Is it a union shop with a classic confrontational style or is there evidence of a progressive team approach in use?

STEP 12: VISIT THE PRESIDENT AND TOUR THE FACILITY

There is no better way to get direct answers to your concerns about a vendor than a personal call.

http://www.unicastco.com/Evaluation/

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