How many foundries in China undergo a financial Audit- and more importantly how many of those foundries budget for a 10 to 20% profit per casting only to find that their real costs are much closer to the selling price or may even exceed the selling price resulting in reduced actual net profit or even a loss.The difference may be in the fact that an estimated cost will not include the potential for the recovery of hidden costs - so it is necessary to minimize and record these additional hidden failures so that the industry may reflect a true relationship between an estimated cost and the actual total manufactured cost. As a result of this it appears that the current environment is not measuring these failures and hence is not acting to improve them.It is suggested here that substantial savings are being found in reducing both internal as well as external failures. Furthermore it is also suggested that the apparent cost of consumable is not the most important cost issue in the industry as it only represents around 6% of the real cost.
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