Olympic Fabrication and Finishing (OFF) was looking to improve its profitability by streamlining manufacturing processes and associated costs. Coincidentally, its existing liquid finishing system had reached the end of its useful life and needed replacing. Therefore, OFF considered replacing its low-solids finishing system with another finishing method, evaluating other finishing technologies and associated capital and operating costs.

Products
OFF fabricates various formed and welded sheet metal products in accordance with customers specifications and designs. These parts exhibit average finishing difficulty. The substrate is a combination of steel and aluminum. The maximum part size for this operation is 5 ft high by 3 ft wide by 10 ft long.

Application
Both sides of the fabricated parts must be coated using automatic applicators. Because of the complexity of some parts, manual touchup is required to provide complete coverage of the part. All of the products produced in this facility will be coated at a film thickness of 1-2 mil using one of two proprietary OFF colors.

Production Rate
Approximately 2.5 million sq ft of surface area will be coated per year. Production at this facility will be performed on a one-shift basis, five days per week, for 250 working days per year. The conveyor line speed required to attain this production rate has been calculated at 10 fpm.

Equipment Requirements
After some consultation with finishing experts, OFF has determined that most of the finishing equipment is the same for its application. For instance, the parts must be cleaned, pretreated, cured and conveyed without regard to the finish applied. Therefore, the company is restricting its process comparison to the equipment required to apply low-solids and high-solids coatings, waterborne coatings and powder coatings.

Each of these finishing systems requires applicators to spray the coating, spray booths to isolate coating operations from the plant environment and specialized ancillary equipment to meet code and safety requirements.

Table I shows the uninstalled capital costs for each of the various finishing systems that OFF is investigating. These figures are based upon actual costs provided by various industry suppliers.

TABLE I—Total Capital Costs
Finishing System Low-Solids	Equipment Low-Solids 2 Water Wash Booths 1 Dry Filter Booth 8 Electrostatic Automatic Spray Guns 2 Electrostatic Manual Spray Guns 2 Reciprocators Fire Detection and Shutdown System Water Waste Separator Solvent Incinerator	Capital Costs $200,000 $350,000
Total $550,000
High-Solids	2 Water Wash Booths 1 Dry Filter Booth 8 Electrostatic Automatic Spray Guns 2 Electrostatic Manual Spray Guns 2 Reciprocators Fire Detection and Shutdown System Water Waste Separator Paint Heaters	$204,000
Waterborne	2 Water Wash Booths 1 Dry Filter Booth 8 Electrostatic Automatic Spray Guns 2 Electrostatic Manual Spray Guns 2 Reciprocators Fire Detection and Shutdown System Water Waste Separator Isolation and Protection Devices	$240,000
Powder Coating	1 Powder Coating Cartridge Booth 8 Electrostatic Automatic Spray Guns 2 Electrostatic Manual Spray Guns 2 Oscillators 2 Reclaim Modules with Rotary Sieves Fire Detection and Shutdown System	$165,000

OFF, in consultation with its local environmental agency, determined that it would need to install a solvent abatement system if it was going to continue to use low-solids coatings.

OFF learned that the capital costs for powder coating were competitive with other finishing methods. This is especially true when it compared the capital costs of powder coating to low-solids liquid spray, including the solvent incineration system.

Operational Costs
Capital costs alone are not a fair comparison of these finishing technologies. Therefore, OFF embarked on a comparison of operational costs. These operational costs consist of several parameters, such as coating material, labor, cleanup, maintenance, energy and rework. Each of these categories needs to be examined separately to determine which finishing technology is least costly to operate.

Coating materials represent approximately two-thirds of the total operating cost of any finishing system. These costs vary widely between the different finishing technologies. Table II provides the details of its analysis.

TABLE II—Coating Material Costs
Cost Item Material cost, $/gal % solids Specific gravity Theoretical coverage, sq ft/gal % utilization Film thickness, mils Actual coverage, sq ft/gal Applied cost, $/sq ft * (Substitute pounds for gallons)	Low-Solids 18.00 35 N/A 561.4 50 1.20 233.9 $0.0770	High-Solids 22.50 63 N/A 1010.5 50 1.20 421.1 $0.0534	Waterborne 17.50 3.00* 35 N/A 561.4 50 1.20 233.9 $0.0748	Powder 3.00* 98 1.4 134.6* 89 2.00 59.9* $0.0501

OFF compared materials using application efficiencies and film thickness in standard industry practice. Because powder coating is easily recycled, its applied cost is less. This is true even in light of the slightly higher film thickness associated with powder coatings.

Because of the continuing rise in labor costs, the operational, cleanup and maintenance labor costs are of keen concern to OFF. Table III shows the results of the comparison.

TABLE III—Associated Costs
Cost Item Line Supervisors Supervisor Cost Supervision Total/hr Line Operators Operator Cost Operators Total/hr Clean-Up Time per shift Clean-Up Cost Hours per Shift Hours per Year Clean-Up Total/hr Waste Generated/hr Sludge Disposal Cost/gal Sludge Total/hr Maintenance Hours Maintenance Cost Replacement Parts Maintenance Total/hr Cost per Filter Filters per Year Filter Cost per Hour Total Costs/hr	Low-Solids 1 $20.50 $20.50 2 $10.25 $20.50 1.5 hr $10.25 8 2,000 $1.92 0.9 gal $45.00 $42.08 125 $10.25 $5,000 $3.14 $1.00 120 120 120 6 $0.06 $88.20	High-Solids 1 $20.50 $20.50 2 $10.25 $20.50 1.5 hr $10.25 8 2,000 $1.92 0.9 gal $45.00 $42.08 125 $10.25 $5,000 $3.14 $1.00 120 $0.06 $88.20	Waterborne 1 $20.50 $20.50 2 $10.25 $20.50 1.5 hr $10.25 8 2,000 $1.92 0.9 gal $45.00 $42.08 125 $10.25 $5,000 $3.14 $1.00 120 $0.06 $88.20	High-Solids 1 $20.50 $20.50 2 $10.25 $20.50 1. hr $10.25 8 2,000 $1.28 2.2 lbs gal N/A $0.00 75 $10.25 $5,000 $1.63 $50.00 6 $0.15 $44.07

OFF realized that there is not any saving in operational labor costs since its system is designed to use automation as the main method of application. However, it did see a large reduction in maintenance labor and replacement part costs. This is largely because powder coating systems have fewer moving parts and dont rely on mechanical pumps to feed the automatic applicators. Furthermore, the filters for powder coating systems are more expensive, but require less frequent changing. Sludge disposal is completely eliminated with powder coating, since waste powder is classified non-hazardous and can be handled by services that normally deal with non-hazardous wastes. When all of these factors were evaluated, it became clear that OFF would see savings of more than 50% in maintenance and sludge disposal costs with a powder coating system.

Energy costs were also a concern. Therefore, it compared these different finishing technologies based on energy use. Table IV shows the results.

TABLE IV—Energy Use
Cost Item Spray Booth Exhaust Cure Oven Exhaust Total Load Loss in Btus Oven Make-Up Air Incineration Energy Flash Tunnel Exhaust Flash Tunnel Line Total Btu per Hour Total Gas Energy Costs/hr	Low-Solids 200,640 Btu 148,033 Btu 1,348,500 12,123 Btu 738,390 Btu 10,000 cfm 209,000 Btu 2,656,687 $11.21	High-Solids 200,640 Btu 84,216 Btu 1,348,500 6,897 Btu N/A N/A N/A 1,640,253 $6.92	Waterborne 200,640 Btu 148,033 Btu 1,348,500 12,123 Btu N/A N/A N/A 1,709,297 $7.21	Powder N/A 111,441 Btu 1,784,437 6,897 Btu N/A N/A N/A 1,902,775 $8.03

Since powder coatings require slightly higher cure temperatures, the “Total Load Loss” or Btus required to heat its product is higher for powder coating. However, OFF noticed that there was no need for spray booth exhaust, flash tunnel exhaust or solvent incineration for a powder coating operation. These three areas present OFF with significant energy savings over liquid finishes. When comparing total energy costs, powder coating is less costly to operate than low-solids coatings and slightly more expensive than high-solids or waterborne coatings.

It was time for OFF to total all the various operational costs for the different finishing technologies. It was here that powder coating was proven to be the finishing technology of its future with substantial operational cost savings when compared to liquid finishes. Table V shows the results of these summations.

TABLE V—Cost Summary
Cost Item Material Labor, Clean-Up and maintenance Energy Rework Total Annual costs Costs/sq ft	Low-Solids $192,376 $176,410 $22,434 $31,298 $422,518 $0.17	High-Solids $133,595 $176,410 $13,851 $25,908 $349,764 $0.14	Waterborne $187,032 $176,410 $14,434 $30,230 $40,8106 $0.16	Powder $12,5206 $88,131 $16,068 $4,588 $233,993 $0.09

This table clearly shows the advantages for OFF of operating a powder coating system as compared to other finishing spray methods. One of the most interesting aspects of powder coating is its forgiveness during application. Because it is almost impossible to cause a run or sag when applying a powder coating material, the cost for reworking rejected parts is dramatically reduced.

Payback
As with any capital equipment project, OFF is concerned with the amount of time it will take to amortize the initial cost of installing a new finishing system. OFF compared the operational cost of each spray finishing technology to its existing low-solids liquid spray operational cost to determine the annual operational cost savings. The savings, if any, were then divided into the capital cost for installing the new spray technology to determine the payback (in years) of converting to that technology. The results of this payback analysis are depicted in Table VI.

TABLE VI—Finishing System Payback
Finishing System Low-Solids High-Solids Waterborne Powder Coating	Capital Costs $550,000 $204,000 $240,000 $165,000	Annual Operating Costs $422,518 $349,764 $408,106 $233,993	Annual Operating Savings $0.00 $72,754 $14,412 $188,525	Payback in Years $N/A $2.80 $16.65 $0.88

Although all the spray-finishing technologies offer some annual operational cost savings over low-solids liquid spray, powder coating offers the most dramatic reduction in annual operating costs. Additionally, a powder coating system, in this example, is less expensive to install than all the other spray application technologies. OFFs capital costs of installing a new powder coating system will be paid back in operational savings within the first year of operation.

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