Do you ever feel like your powder coating shop is working harder than it should for what it’s bringing in?
Sandee KaplanI’ve been there. The schedule is full, production and batch lines are moving, and your team is putting in the kind of effort you expect. Your receivables might even be mostly current. But even then, something doesn’t feel right. You can’t quite put your finger on it, but you know the margins should be better than they are.
In my case, I just knew we were too busy to be struggling like we were.
I owned and ran a powder coating shop for 25 years, growing it from a small operation into a multimillion-dollar business serving aerospace, defense, architectural, and industrial customers. I spent years in the weeds of production, quality, and cash flow, learning the hard way where money is made and where it slips away. I managed a successful sale of that company last year and now help other owners achieve their growth goals and plan for an eventual sale or transition.
Fixing Process Gaps
Looking back now, I can name exactly what was going on. It was process gaps that we had learned to work around rather than fix. When you’re inside it every day, you don’t see those things clearly. You just keep moving. The good news is that there are some common process gaps to focus on, along with solutions to address them.
One of the biggest gaps I’ve seen is inconsistent prep. Not bad prep, just inconsistent. One shift does it one way, another shift does it slightly differently, and now you’ve introduced variability before the part even hits the booth. You don’t always see it right away, but it shows up later in adhesion issues, appearance, and long-term performance.
Racking is another one that doesn’t get talked about enough. Shops underestimate how much poor or inconsistent racking decisions affect everything downstream. If parts aren’t supported the same way every time, you end up chasing coverage issues, thin spots, heavy build areas, and even cure inconsistencies. It looks like a coating problem, but it started much earlier.
Problems happen, people fix them in the moment, and then everyone moves on. No one circles back to ask why it happened or how to prevent it next time.
How information moves through the shop is a second constant issue. Quotes don’t translate cleanly into production instructions. Special requirements get buried in emails or handwritten notes. Someone on the floor is making decisions without full context, and now you’ve got variation in how jobs are run. These instances don’t happen because people don’t care, but because the system isn’t carrying the information clearly. They just want to keep the line moving so they aren’t scrutinized as the bottleneck.
The Issues with Color Change
Color change discipline is another one I’ve seen over and over. Not just how long it takes, but how consistently it’s handled. In some shops, it’s tight and repeatable. In others, it depends on who’s running the booth that day. There are tribal knowledge rules (like don’t spray white after red) that are commonly learned the hardest way. Yes, that example is one I learned the hard way! That inconsistency shows up in wasted powder, longer changeover times, and sometimes contamination that forces rework later. Anyone want a rack of pink parts?
Material handling is another one that hides in plain sight. Parts are sitting longer than they should between stages, getting contaminated with airborne fallout, mixed, or damaged. Or just having parts move through the shop in a way that creates unnecessary additional touches. Every extra touch is risk and labor, but it often feels invisible because it’s just “how we do it.” If things are visibly moving, everything is seemingly fine.
6% of $5M means about $300,000 worth of production being touched more than once.
One that most owners don’t see clearly until someone points it out is the lack of real feedback. Problems happen, people fix them in the moment, and then everyone moves on. No one circles back to ask why it happened or how to prevent it next time. And then you see the same issues come back. This was a big one for my personal shop, as my team had been conditioned over the years to just fix it and move forward- don’t make waves by saying anything, and don’t get blamed. Making it comfortable, even acceptable, to make mistakes is human, and working with my team to address them made significant gains in my own shop.
Accountability and Who Owns Quality
That ties directly into accountability. Who owns quality at each step? Who owns the outcome when something goes wrong? In a lot of shops, that’s not clearly defined, so people do their best, but there’s no consistency in how problems get addressed.
I want to walk through a specific example with real numbers to make this tangible.
Every finishing shop deals with rework. Parts come back through the line. The color doesn’t match. Adhesion fails. Film thickness is off. A prep step gets missed, and now you’re stripping and recoating something you already ran.
You don’t need anyone to tell you what that feels like; we all already know. The groaning pit in your stomach that attaches to every physical process on the production floor and flows uphill into the management office, where you have to swallow that sinking feeling and call your client to deliver the news of a schedule delay. Now they have to call their client and inform them of an install delay, and the dominoes have fallen.
Even if you cut that number in half and say only half of that $300,000 is true margin erosion, you are still looking at $150,000 a year disappearing out of your business, not because of one bad decision, but because of a hundred small ones that became normalized.
It’s frustrating, but it also becomes normal. That’s the dangerous part, because once it feels normal, you stop really looking at what it’s costing you.
Let’s say you’re running a $5 million/year powder coating operation with a 30% gross margin. That’s a solid business on paper. Now, assume your rework rate is around 6% (admittedly low for this example, but I am illustrating a point). That is not a crazy number. In a lot of shops, it’s more than that.
6% of $5M means about $300,000 worth of production being touched more than once. At first glance, it doesn’t seem like a big deal. Not all of that is incremental cost. Some overhead is already baked in. But that’s not where the real cost sits.
Don’t Pay Twice for Labor
Rework means you are paying for labor a second time. Handling, masking, racking, coating. All of it. You are using material again. You are tying up oven time and line capacity that you don’t have to spare. Your supervisors get pulled into troubleshooting instead of running production. Your schedule starts slipping. Shipments get delayed. Customers start demanding answers.
This is where the money goes.
Even if you cut that number in half and say only half of that $300,000 is true margin erosion, you are still looking at $150,000 a year disappearing out of your business, not because of one bad decision, but because of a hundred small ones that became normalized.
Now flip it for a second. What happens if you cut that rework rate in half, from 6% down to 3%?
When rework drops, everything starts to feel different. Jobs move more efficiently. The schedule becomes manageable. You can push more through the same footprint without adding labor.
This is not about buying new equipment or some other large asset purchase. Most of the time, this comes down to tightening how the operation is being run.
It starts with tracking root causes so you’re not guessing anymore. Putting real quality checkpoints in place and using them. Getting consistent with racking so parts are supported the same way every time. Being more disciplined about how colors are sequenced. Tightening up prep so you don't introduce variability before the coating even starts. And holding supervisors accountable for quality, not just output.
Those are the kinds of things that change what the shop produces.
The Facts of Cutting Rework in Half
In this example, cutting rework in half gives you about $75,000 in annual profit improvement. Remember how conservative we are being with our numbers if you scale in your mind to fit your own shop! Now put that next to the cost of bringing in someone to help you do it.
An engagement like this might run $30,000-$40,000 over a couple of months. If it produces a $75,000 improvement, it pays for itself in the first year. After that, those gains continue and accelerate.
On the backside, there’s another piece that most people don’t account for: capacity.
Rework doesn’t just cost you money. It steals space inside your operation. Every time a part comes back through, it takes up rack space, slows your line, increases work in process, and stretches out your lead times. That is space that should have been used for new work. So, you’re not just paying to fix mistakes. You’re losing the opportunity to run profitable jobs.
When rework drops, everything starts to feel different. Jobs move more efficiently. The schedule becomes manageable. You can push more through the same footprint without adding labor. Customers notice reliability, and it changes the conversation around pricing.
Most shops don’t ignore rework- they normalize it. They explain it away. My customer is demanding and picky. My week has been busy. My lead called in sick.
Over time, it becomes part of how the business operates, and that’s when it becomes a built-in cost.
It does not have to run that way.
It’s Often Hard to See What’s Wrong
When you’re inside your own shop every day, it’s hard to see what’s wrong. Sometimes you don’t even realize anything is wrong. Things just become the way you do them. You stop questioning them.
It took someone from the outside walking in and pointing at things for me to really see it. Not theory. Not some structured management idea. Right there on the floor. What was happening, why it was happening, and what it was costing me.
If I’m sitting across from you and we’re talking about this over coffee, the question I would ask you is simple.
Do you think the inefficiencies already inside your shop are costing you more than it would take to fix them?
Sandee Kaplan is an Operations Leader and a former owner of a manufacturing and finishing business. Visit https://k2operations.com or email her at Sandee@K2Operations.com
