How Foundries Are Adapting to Challenging Economic Conditions.
Energy intensive industries have experienced many challenges this year due to turbulent markets and rising costs. Manufacturing industries, such as foundries, are finding it particularly difficult as a significant portion of their costs relate to energy consumption, where costs have spiked this year.
So how do foundries survive and thrive in the current economic environment?
When Open Energy Market’s Chief Commercial Officer, Robert Gorby interviewed Toni Carannante, Founder of TC-TEC, an engineering consultant with 44 years of experience in the foundries and metals sectors (and a keen rally driver in his spare time!), he made several interesting observations about how he believes these industries are surviving in these challenging times.
Their survival, in my opinion, comes from the acronym TAD. TAD represents Technology, Automation, and Deskilling. You'll find that the best foundries embrace all three.
From a technology perspective, leading foundries are embracing the latest technology innovations to improve performance and efficiencies. These technology solutions are also becoming more affordable which is good news for foundries already under cost pressure. From an automation perspective, the requirement for labour is reduced as certain tasks and processes can be automated. This also reduces the reliance on recruiting new people, which has often presented foundries with challenges. Finally, by using technology to automate processes, businesses can de-skill their operations and therefore become less reliant on technical people who are more difficult to recruit due to shortages of certain skillsets in the labour market.
There are a lot of changes happening in energy-intensive industries right now, from how businesses choose to procure energy to how and when they choose to run operations. The volatility of the energy markets is one of the driving factors behind these shifts.
Historically, electricity prices for energy-intensive industries in the UK have been higher than their European counterparts. Industry bodies argue that higher electricity costs in the UK put domestic manufacturers at a competitive disadvantage in global markets, although fuel prices have remained comparably lower.
Businesses have to find a balance between remaining competitive and successfully running their operations. No two businesses are the same, so although businesses may have to make shifts to respond to the same energy challenges, these shifts may differ from one business to another.
The affordability of automation and technology has to come through optimising the current equipment they do have. So, for example, engineering management consultants like TC-TEC can help the industry maximize its current machinery, equipment, and technology.
According to Toni, businesses in this sector are also shifting their melting strategies. There are some early indications of a trend towards using energy overnight to save costs and reduce their impact on the grid.
Some foundries won’t melt during the day, they'll only melt during the night, and you've got some foundries in my client base, that are limited on power as well. So, it's not just a case of the cost of it, it's also the availability of it., says Toni Carannante.
This trend towards overnight energy use has been necessitated by the rising cost of electricity as well as its limited availability. The heatmaps below show this growing trend; however, this is not the case for all foundries:
What does this mean for energy-intensive industries? Is the future success of foundries dependent on a sudden shift in habits and the use of less expensive energy? Or does the metals industry need to emulate a varying workday in order to stay competitive with their European counterparts?
With Open Energy Market and TC-TEC, foundries can maintain their energy-intensive production processes while implementing cutting-edge energy strategies and maximizing their investment in machinery, equipment, and technology.
If you would like to find out more about how Open Energy Market brings cost savings, confidence and control to the Foundry industry, please contact us via email at email@example.com or call us on +44 1483 492 600