THE BUSINESS OF VISCOSITY BLOG



    3 Reasons Coil Coating System Cleaning Costs are Increasing

    Posted by Mike Bonner

    Jun 26, 2015 11:00:00 AM

    coil coating system

    The coil coating market is far different than it was 10 years ago when we first got involved. In those days, it was not uncommon to run a full truck or rail car for a single order. Those long runs of two to three days on a single color are a thing of the past. The normal order now is one to two coils, and orders of just a portion of a coil are common. This drives up coating system cleaning costs for three main reasons:

    1. Frequent Deliveries

    Customers are driving down inventory levels as a way of conserving cash. This means that they are asking for more frequent deliveries of smaller volumes. It would be impractical for the coil coater to try to run a lot of inventory and then stock it to sub-divide to ship in small lots – for the same reasons that their end user doesn’t want to stock it: Cash.

    2. Short Runs / Small Lot Sizes

    If you’re not going to run in large batches, stock, and sub-divide for shipments, frequent deliveries of smaller volumes requires that you run small lots to meet your shipment schedule. This is in keeping with most companies’ just-in-time objectives, but these short runs each end in a cleaning sequence to change from one color to the next. The smaller the order size, and more frequent the shipment, the more cleaning that is required – it’s just that simple.

    3. Custom Colors

    Another factor driving higher cleaning costs is the trend toward custom colors. The days of, “You can have it any color you want – as long as it’s black” are long since over. Many customers (and the percentage is growing) want highly specialized colors – often to support a specific brand.

    The most oft-cited example is Coke red. The shade of red is specific – and significantly different from the distinctive red roof of a Kentucky Fried Chicken franchise. But, like Coke, KFC wants their specific red components to be exact when they are building a new restaurant – which can require just a portion of a coil for trim stock.

    A Necessary Evil

    It’s just a fact of life. At the end of every run, no matter the size, the coating system has to be cleaned, whether switching to the next color run, or shutting down the system for maintenance, holidays, etc. And every minute spent cleaning, and every supply – solvent, rags, filter bags, the list seems endless – consumed in the cleaning process represents non-value-added cost. Unfortunately, this is just considered part of the overhead of operating a coater.

    But the costs are not uniform across all orders.

    Custom colors differ from recurring colors in that they not only result in a cleaning sequence at the end of the order, they also result in a higher rate of “dead paint” for disposal and write-off – significantly increasing the cost of these color changes. As these demands increase, the problem is magnified.

    Running Counter to Your Business Objectives

    Coating is a complex business. There is significant competition in the marketplace, which gives the coated products consumer a strong negotiating position: “If you won’t run it the way I want it, somebody else will!”

    This drives down prices, all at a time when the demands of the market are driving up costs, making it hard to support an acceptable margin structure. Though the reality, it is a difficult environment in which to operate, and not for the faint-of-heart!

    Download the free Cost Reduction Calculator to see where you can cut your overhead without cutting quality.
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    Topics: coil coating, paint and coating

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