Profit from a cut in waste

With the cost of raw materials continuing to rise,Dawson Shanahan believes many companies could reduce costly material waste by adopting precision cold forming

The cost of almost all the common metals used as raw materials in the production engineering sector has been rising steadily in the last year. For example, the price of copper jumped by over 60% between May 2009 and April 2010, with predictions that it could reach $8000/t following disruption to supplies following the major earthquake earlier this year in Chile, the world's largest producer of copper ore.

Similarly, aluminium prices have risen by around 50% over the same period. Although steel products are trading some way off their highs of a few years ago, the overall change in prices moves relentlessly upwards. It's reasonable to predict that although there may be short term fluctuations this upward trend in raw material prices will continue, as the global economy recovers and demand increases, especially in Asia and the Far East. Indeed, Rio Tinto, the world's second largest ore mining business, reported recently that most of its operations are running at full capacity, largely as a result of strong demand from China and India.

For UK manufacturers purchasing raw materials in Sterling, this problem is likely to be exacerbated as the world's commodity markets generally trade in the US dollar; although this currency has fallen in value against the pound, it still remains relatively strong and looks, with the scale of the financial deficit in the UK, set to stay that way for the foreseeable future.

One option for manufacturers is simply to increase the price of goods leaving the factory gates, to protect their profit margins. In practice, however, this is not always possible, especially at a time when the UK is struggling to free itself from the grip of recession, with depressed levels of local demand, or where manufacturers have to compete in increasingly tough export markets.

Further options include efficiency savings, although with most businesses already running extremely lean operations, there is limited potential for shaving costs still further; additionally, a switch to lower cost materials may be possible, as long as the required characteristics of the finished products can be retained.

Changing methods of production can, in many instances, also offer an interesting option, especially if existing engineering processes involve milling, drilling and grinding. In particular, these processes can generate considerable quantities of waste material that although reclaimable has, ultimately, to be paid for. For example, machining a typical copper nozzle used in plasma or laser welding applications, with a finished weight of 36g, requires a block of metal weighing 213g from which the shape can be milled. This generates 177g of waste material; in other words, more than 80% of the total starting weight of metal is wasted - at current copper prices that's well over £1 of material wasted per component.

Although not all components can be analysed so simplistically there are many parts where material is being needlessly wasted, and where production cost can be significantly reduced, by considering alternative methods of production.

One option is precision cold forming, where a billet of metal is extruded using a die and punch under high pressure; typically, this is around 100t in a specially designed press, although for some materials or larger components pressures can increase to 2000t using orbital presses.

Precision cold forming is an established process and although it is widely used in a range of niche applications, Dawson Shanahan believes it deserves wider consideration, as it offers a number of benefits. Perhaps most importantly, because parts are extruded from a small billet of metal, it is possible to make considerable reductions in waste material.

Using the same example of a copper laser nozzle, only a 54g billet would be required, producing a fully shaped part that simply requires final machining; waste is therefore reduced to just 18g or about £0.12 in cost.

Additionally, precision cold forming can produce highly polished surfaces, without the need for extensive finishing and with often complex internal geometries in a wide range of metals, including copper, brass, steel and tungsten. The process also improves the mechanical properties of the finished part where, unlike machining where sections are usually cut across the grain structure of the material, the direction of forming and the geometry of the part is aligned with that of the grain structure.

Precision cold forming may not be the perfect solution in all cases, but as an engineering process it deserves greater consideration as part of manufacturers' portfolios of production options. At a time of rising raw material costs, precision cold forming can provide a valuable method of protecting profit margins.