Factors Affecting Job Shop Profitability

Q: We are fairly new in the powder coating job shop business. We have found that our quoting and process are uneven: we are not really hitting the margins we want on all our jobs. One issue we have identified includes a typical reject rate of around 5%. Some parts have higher yields, but the average is too high. Another issue is the coating thickness. Light coating and orange peel are a major part of our rejects. We also have a hard time getting the throughput we plan on when we quote a project. Can you advise us on quoting methods and other issues that affect profitability?

A: This is an interesting question that I have seen examples of before. A lot to talk about here. Profitability in a job shop begins with the part to be coated, how it will be hung and how many good parts can be coated in a given time frame. Before the part can be quoted, the racking method and throughput must be determined. For a conveyor line like you describe, the racking density is critical. Parts should be close enough for efficiency but with enough space to easily and accurately reach and cover all surfaces. Contacts should be clean and the parts kept in a steady position. Racking should be consistent with full racks and the same position all the time.

First, you need to understand the principles of good racking. As I mentioned, good density is key. Second, the parts should be positioned so they can be easily accessed and easy to see. They should be held in a stable and consistent position. There should not be any large gaps between racks — as long as there is sufficient time to coat the parts based on the line speed and number of guns. Contacts must always be clean so there is no way a part can be insulated from earth ground by coating buildup. Good racking is important for profitable coating.

Once a good racking density has been determined, you are ready to quote. The factors are labor, material, variable line burden, fixed cost and scrap or rework. Calculate each total per hour and then divide by the throughput to come up with a piece price. There is a detailed description of the quote method in Products Finishing called Calculating the Cost of Powder Coating: short.pfonline.com/powdercalculator.

Once you have the job and begin production, you will need to measure and record the setup of the spray equipment and quality results. First-pass yield with powder coating should typically be in the high 90s. If you find that you have a lot of issues (light coat, heavy film, orange peel), you should examine the racking and gun setup to determine what issues are at the root cause. For example, if the issue is light coating, you may need more manual operator training, more guns, more flow or something else to pick up the film thickness. This assumes you have good earth ground. Poor ground will radically affect film uniformity and cover.

Work on your racking and think of the rack as a tool, not just a hook. Maintain racks at all times. Get the line operators the tools, time and training they need to do good work. Measure and react to the film thickness, coverage and first-pass yield. Keep everything clean and in good working order. Finally, if a job is not making any money and you conclude it is quoted too low, raise the price or stop doing those parts. You cannot run parts well below margin without serious losses.