Reducing Ecoat Costs Without Affecting Quality
Axalta’s Joe Subda suggests taking an eight-step problem-solving approach to get cost savings from an electrocoating operation.
Q. I would like to reduce the costs of my electrocoat operation without affecting part quality. What are my options?
A. Reducing costs and improving profitability are persistent needs in the electrocoat industry. Electrocoaters are required to provide a high-quality product at an ever-reduced cost to their customers, while striving to maintain or improve the financial returns to their own businesses. Reducing costs can be difficult or impossible if the right information is not known. A hidden cost might be missed or an area with a higher return could be overlooked.
Since I don’t have any information about your specific operation, I will discuss the basics of how to evaluate, determine and reduce the costs that are generally associated with an ecoat system. Hopefully, I can provide useful ideas and guidance for establishing a meaningful cost-savings effort.
A useful and often recommended approach to cost savings is to treat the issue in the same way that you would solving a quality problem. There are many books, courses and consultants that suggest you formally organize a project team and follow a rigorous problem-solving method. Many companies already have experience with this type of approach, and the details go beyond the scope of this article, but a few key points are worth noting.
The first step to cost savings should, in fact, be to form a cross-functional cost-savings team. To maximize the effectiveness of and payback from such a project team, it should be formally initiated or chartered by company management. There must be complete understanding, agreement and communication by management as to the project’s scope, and the team’s responsibility and authority. The team should include members who represent all necessary skills and functions that are needed for the task, and it must be assured of the required resources, budget and working time.
The exact problem-solving methods the team employs can vary somewhat, but here is an example of one set of steps adapted for a team charged with cost savings:
- Identify areas for cost savings.
- Determine costs associated with each category.
- Estimate cost-savings potential.
- Generate possible solutions.
- Select solutions.
- Implement solutions.
- Evaluate solutions.
- Maintain the results.
So, to begin dealing with ecoat system costs, one must first break down the sources of cost, determine the potential savings opportunities, and prioritize the opportunities for size and difficulty. Here are descriptions of each step:
Step 1: Identify areas for cost savings.
Separate the areas of your business or processes into cost-savings categories. This can be done in major categories such as manpower, energy and material, or you could break areas down by process, such as racking and unracking, pretreatment, and ecoating. Use whatever categories make the most sense for your operation. You can add subcategories within the major categories and then individual items within those subcategories. One common method for doing this is using a fishbone diagram.
Step 2: Determine costs associated with each category.
Determining the costs in each category is one of the most important steps. Successful cost-saving efforts are based on knowing and understanding current costs. This seems obvious, but it is often an overlooked step. I know it can be a difficult task to determine the costs of a complex operation like a pretreat/ecoat system, however, the accuracy of this cost estimate will affect the success of the project.
Step 3: Estimate cost-savings potential.
Each individual area or item that you have identified should then be evaluated for potential savings. One of the ways to prioritize the target areas is by the associated costs. The higher the costs in an area, the higher the savings potential. Each area can then be prioritized based on this potential.
Step 4: Generate possible solutions.
Within each area, generate all possible cost-savings solutions. Record all ideas, no matter how wild they might sound. (Some of the best ideas might sound wild at first.)
Step 5: Select solutions.
For each potential solution, determine the potential savings and cost of implementing the solution. From this information, you can determine and rank the potential rate of return on the solutions. You can then select solutions based on rate of return and the resources available for implementation, such as capital and manpower.
Step 6: Implement solutions.
Implement solutions based on part and resource availability, need for downtime, or other pertinent criteria.
Step 7: Evaluate solutions.
You must have a plan for measuring and tracking the amount of savings that are realized from each solution. If a solution is not performing as planned, adjustments need to be made to ensure savings are realized. Time and money are terrible things to waste.
Step 8: Maintain the results.
A cost-savings program is not complete until there are mechanisms in place to hold the gain. These may include maintenance of new equipment, training of employees, complete records of the work done for the program, and continued tracking of cost performance.
Joe Subda is a senior product specialist for Axalta Coating Systems. Visit axaltacs.com.
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