Simple Solutions That Work! Issue 16

38 JIM GAULDIN Chief Sales Engineer Klein Palmer Inc. ARTICLE TAKEAWAYS: • Sand transporter evaluation justification • High costs associated with transporter downtime E very year foundries are faced with the daunting task of making decisions on their yearly CapEx budget and struggle with how to evaluate their options and needs. The CapEx budget has limits by design and there are always more dollars required for process improvement than have been budgeted. Where does the sand transporter or any other piece of equipment fit into this equation? This decision process can be simplified by using this seven-point value proposition for capital expenditures. The first evaluation point is the usage of the item in question. Is this an item or piece of equipment that is used or will be used every day in your production? Is it or will it be used 24/7, a few times a day or weekly? Obviously, equipment such as sand transporters that are used the most or are critical to production will automatically move to the top of your list. A Seven-Point Value Proposition for Sand Transporter Capital Expenditures Your second evaluation point should be: does this product/ piece of equipment provide the company with additional opportunities or a competitive advantage? Will this investment in new equipment or technology enable your company to create a product or deliver a service that it couldn’t previously? Will it improve quality or reduce scrap? Will it improve plant safety and avoid worker injuries or OHSA violations? Will this equipment lower operational and production costs? The next point of appraisal is the equipment reliability, or the possibility of breakdowns and downtime. Reliability and quality or “robustness” should be the critical factors to choosing the correct process equipment. Equipment that is used daily means that the quality and reliability should be much more important than the price. The value of the performance and reliability should increase with the frequency of use. Check references with other companies using the equipment to verify reliability and the frequency or severity of breakdowns. Factor in the costs that are inevitable on the day the machine either breaks down or when an inexperienced employee accidently crashes the machine. Evaluate the cost of downtime, the time needed to get parts and repair the machine and the damage to your customer relationships when your finished product deliveries are certain to be delayed. Since sand supply is vital to foundry production, the reliability of the transporter is critical. After appraising the reliability of the equipment, it is necessary to evaluate the warranty on the product to be purchased. How long is the warranty period? When does the warranty begin, at time of purchase or after receipt? What is included in the warranty and what voids the warranty? What is the warranty claim process? Is there an extended warranty option? A longer warranty period is an indication of the supplier’s confidence in his product’s performance capabilities.