Profit motive: Tossing away profits

Jan. 1, 2020
The relevance of the phrase "a dollar saved is a dollar earned" is something every collision shop owner can relate to, especially in today's tough economy. There are probably plenty of unrealized savings in your shop in the form of material costs, wh
paint materials budget

The relevance of the phrase "a dollar saved is a dollar earned" is something every collision shop owner can relate to, especially in today's tough economy. There are probably plenty of unrealized savings in your shop in the form of material costs, which you can cut simply by cutting down on waste. Improving paint and material gross profits especially pays great dividends. These additional savings go straight to your bottom line.

Improving material margins can be as involved and complicated as a business owner wants to make it. If you like simple solutions and want to save money, here is a proven method to reduce material waste that can provide a nice return on your investment in time.

Catalyst is the most expensive liquid refinishing product per ounce purchased by a shop. Depending on the system used, catalyst is typically added to clears, primers, sealers and occasionally basecoats.

Paint manufacturers and suppliers recommend mixing all of their liquid products on a computerized scale. Catalyzed clear and primer are frequently mixed using a graduated cup or measuring stick. This method regularly results in unused product that is poured in a waste container drum.

Paint technicians usually have the best of intentions and do not maliciously waste catalyzed product – although in times of frustration body shop owners and managers may argue this point. Painters are typically so focused on producing labor hours and meeting production deadlines they may not take into full consideration the expense of continually tossing out catalyst.

A great way to solve this problem is measuring the waste and then converting the ounces of catalyzed product into dollars. This helps build an awareness of the expense, which helps change ingrained habits. Start by asking your paint provider to calculate your cost for an ounce of catalyzed clear, primer and sealer.

Take three mixing cups, graduated in ounces and mark one with a C for clear, P for primer and an S for sealer. Instead of pouring the over-mixed product in the waste drum, have your painters pour the "extra catalyzed" material in the appropriate cup. Place the containers in the booth during the last bake cycle of the day. The result will be an acrylic "hockey puck" to be disposed of according to the regulations in your area.

At the end of each day, document the total ounces of over-mix for each product. I have a spreadsheet that I provide for clients. This spreadsheet is broken down into four columns: Day, Clear, Primer and Sealer. Each day, the client records how much extra catalyzed material is produced, in ounces, for clears, primer and sealers.

When these columns are filled, the client multiplies the documented ounces of waste by the cost per ounce of the product. This provides a dollar value of unrealized profit. You may be surprised at the amount of waste being generated in your shop. Once calculated, most shop owners and managers quickly communicate the discoveries to their paint technicians without haste.

I recently met with a group of high-volume shop owners that I had provided with catalyzed waste reduction procedures and guidelines last fall. The greatest gain was a shop with a monthly savings on clear and primer of $3,000. Several other shops exceeded $1,500 in monthly savings.

The process to reduce catalyzed material is simple to understand and implement, and brings an awareness of improved profit potential for your operation. Why not give it a try? You've only got profit to lose.

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