Study of the P/M Industry
The Powder Metallurgy Research Center (PMRC) was founded at WPI in 1993 with an initial grant from the Alfred P. Sloan Foundation and seven charter industrial members. Since then, the Center has grown to include 18 members from North America, South America, and Europe. In 1996, the Metal Processing Institute (MPI) was formed as an umbrella for WPI’s near-net-shape processing research. MPI includes the PMRC, the Aluminum Casting Research Center (ACRC), and the Center for Heat Treating Excellence (CHTE). MPI allows research faculty to have access to problems facing different industries and MPI hosts an annual symposium on campus in addition to the two meetings per year of each Center. Moreover, MPI gave the PMRC the opportunity to conduct cross industry research – a valuable perspective for the P/M industry.
Two rounds of Sloan Foundation funding have provided a substantial part of the seed resources necessary to make the PMRC a viable center. We have augmented Sloan resources with membership fees (currently $15,000 per year per member), and funding from the Department of Energy, particularly the Office of Industrial technologies (OIT). Last year the Supporting Industries Program of OIT allocated $1.5 million for P/M and heat-treating industries. This initiative made a great impact on MPI because we received a $1.4 million contract for research and development. Also, Jacqueline Isaacs supplemented Sloan funding with National Science Foundation funds in her cost analysis projects, and the Center for Powder Metallurgy Technology (CPMT) supported our green crack detection project, increasing our funds and broadening industry participation in the project.
The Center now manages a portfolio of research activity in management and technical areas and our impact on the industry has been manifested in several ways, including publications and presentations, regular meetings with our membership on campus, regular participation in trade association meetings, an alliance with the Powder Metallurgy Parts Association (PMPA) in their industry statistics program, and extension of our work to other MPI Centers. These will be discussed within the report.
The Phase II projects involved four key thrusts:
Competitive advantage. This project identified had two objectives – to identify the key success factors within each MPI industry and identify linkages between market orientation, learning orientation, and the skill sets of metal processors.
Buyer-seller relationships. This project was an extension of our phase I work that began with a set of longitudinal case studies identifying factors affecting relationship quality in dyads of firms in P/M (part producers and customers). This project extended over the entire period of funding as the case studies yielded a model that was supported through a questionnaire in all three MPI industries.
Cost estimation and quoting. This project was also an extension of the Phase I work. Cost estimation studies indicated that most firms in the P/M industry rely on standard costing procedures that often underestimate the true cost of development and production. This is an especially critical issue because P/M part conversion (i.e., the conversion from other technologies to P/M part production) depends on the cost competitiveness. Development of Technical Cost Models (TCMs) for the P/M process and for competing technologies allows identification of cost drivers as well as the conditions that allow P/M to hold a competitive advantage. Results from TCMs are reported in two sections within the Key Results Section. The P/M TCM is discussed under Cost Estimation and Quoting, while comparative results for competing technologies are reported under Competitive Analysis for P/M Industry.
E-business in P/M. Given the emerging importance of electronic business initiatives in the supply chain, and the impact of electronic business on customers, the research team decided to redirect the customer satisfaction study with a study of the impact of e-business in P/M and a study of web site quality in metal processing.
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