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Inventory management in auto paint supply stores. 6 problems and solutions. Part 1.

If you own an auto body repair supply store, you know how many product codes you must have in stock. Besides keeping your mixer full and running, there are a handful of other products you cannot afford to be missing. Abrasives of all grits and shapes, various primers, fillers, clears and other consumables are all necessary for the everyday sales. Without having your warehouse stocked up, you will not  be able to retain customers, because no one will wait for you if the needed item is not available. On the other hand, excessive inventory is a trap, which is eating up the profits. It could be very dangerous if not addressed in timely manner. Below I bring to your attention the major challenges and solutions in stock management for the collision repair suppliers.

Short shelf-life products

It is a well-known fact that many materials in the car refinishing industry have a limited shelf-life. In fact, a lot of clear coats, fillers, sealants and primers are usable up to 12 months. Probably you know how hard it is to throw away the expired products. It feels like you are throwing away hard earned cash. Literally.

Solution

The easiest way is to implement FIFO system, which means “First in, First Out” into your CRM or any other inventory management system (I hope you have one). FIFO means that whatever product arrived first, will be picked up for the orders first. By doing this you will avoid shipping fresher product arrivals. Usually, FIFO is linked to the product batch numbers, so employees in the warehouse know exactly which lot to use for the orders to be prepared. And, yes, do not stock ANY product, which is not sold at least a few times in a 12 months time. Avoid it by any means.

Low inventory turnover

In all business books you will find more or less the same statement. The higher the inventory turnover is, the better. You really want to have your money invested in the goods that sell fast and bring profit as soon as possible. But in the automotive refinish supply chain not all the goods sell at the same pace. Particularly on the equipment side, spray guns or sanding and polishing machines are a  “must have” on the shelves, but it is hard to predict when they will be sold. Similarly, certain chemical products, for example, matt clearcoats or rare xirallic pigments may not be in the painter’s everyday shopping list.

Solution

Personally, I have developed a simple two-step process for selecting, which products should stay in stock, and which should not take up space on the shelves. Firstly, I trace the sales pattern, and whatever product hasn’t been sold within the last 12 months, should be dumped. Secondly, the products which I sell just a few times per year should have higher than average profit margin. Otherwise it is not financially sound to keep low margin goods for the long time.

Mistakes in stock accountancy and customers orders

Unfortunately, mistakes happen, and usually these mistakes cost us money and undermine our image in the eyes of the customers. However, it is in our hands to minimize them.

Solution

There is no easy remedy for the poor stock handling. Below I bring to your attention just a few essential steps, which will definitely help you put things in order in the warehouse:

  • Conduct at least two times per year a full inventory check.
  • Implement sophisticated, but easy to use inventory management software.
  • Use barcode scanners in all stages of the product movement – in and out of stock.
  • Train your stuff. Remember, most of the mistakes are simple human errors. Warehouse employees are as important as any other member of your team. Let them know it.
  • Bring your purchasing department close to the warehouse employees. These two departments must work real close to each other.
  • Use FIFO process with all products (see the explanation above)

Automotive clearcoats survery. Thought provoking findings.

Without a doubt, clearcoat is the King of automotive refinishing materials. Well, paint is equally important, but it comes second. Let’s call it … the Queen. Paint is designed to match, but clearcoat … to shine. A safe guess would be that there are much more brands and varieties of clears in the market, then basecoat systems. Clearcoat, for every big or small refinish materials supplier, is the matter of pride, the reason for war (price war I mean) and the vehicle for sales growth. In fact, some fellow rivals in the industry virtually oblige their customers to buy the correspondent quantities of clears related to the paint consumed. Free market, you tell me…

As with other important components of autobody repair puzzle, there are many misconceptions about the clears. For example, “only high solid clears are good” or “low VOC” clearcoats outperform by all parameters their solvent packed cousins. Furthermore, every paint supplier claims that he or she knows what exactly a painter asks from his clearcoat, and, usually, low price is on the top of the list (it is not, check the below survey findings). Lack of transparency (we talk about clearcoat anyway) in our industry, plenty of questionable marketing and absence of standards (read the article on this issue here) confuse the main person in the trade – painter – completely. Therefore, I decided to launch a short 10 questions survey to clear up things about clearcoats.

In the below chart you can see the results of the above-mentioned survey. It consisted of 9 clearcoat characteristics, which the participants were asked to grade from 0 (unimportant) to 10 (extremely important). The last, 10th question was asking about brand/product, which our participants considered as benchmark in quality. The whole list is presented below as well.

Survey findings

Based on the collected answers and from the additional comments we received from the participants the following conclusions can be drawn.

  • The level of shine and gloss retention are the most valued properties of any clearcoat with almost 100% of the respondents gave it a sold 10.
  • Transparency of the clearcoat comes second. From the information we got, there are still a few clearcoats in the market, which are not completely transparent. Usually slight yellowish color is the biggest problem.
  • Ease of application, flow, productivity and consumption – all these parameters – are highly valued as well. Painters like “forgiving” clearcoats, which will not run or solvent pop in case of thicker than normal application. Similarly, clears with high productivity and relatively low consumption are popular too for obvious reasons.
  • Final hardness, chemical and UV resistance are very important to about 85% of the respondents.
  • Drying and flash off times and ease of anticipated buffing (removing dust nibs etc) is crucial for 80% of survey participants.
  • Surprisingly price and solids content (VOC compliance) clearly came the last.

Between the lines

While we had an opportunity to discuss with the survey participants, a few thought-provoking points, which are not depicted by the chart, came to the surface.

  • Price of a particular product is more important to re-sellers than to painters. Paint sprayers care less about price, and more about the result and ease of application.
  • Gloss retention is the biggest challenge for the manufacturers, because a lot of clearcoats in the market loose the shine after only a few days.
  • VOC compliance is the last clearcoat characteristic, a car sprayer considers before the purchase.
  • Among the products, considered as benchmark there are many so-called “non-premium” brands.

The list of cleacoat mentioned as benchmarks  presented below:

Mipa CC8

Spieshecker HS 8055

Novol Spectral Klar 565 VHS

4CR HS Rapid 7235 and 4CR 7262 UHS

Sikkens Superior LV

Debeer Supreme HS 420

Glasurit 255

Roberlo Premium 250HS

HB Body 496

Silco Airmaxx 9600

Etalon 970 UHS

Carsystem Speed Plus VOC clear

Troton Master HS

PPG Deltron D880

RM Crystal Top HS

 

4+1 World Centers of Automotive Coatings Industry

 

I never hid the love for travelling in my posts. I am privileged to to travel for my work, and, in spite of all hardships one journey may have, I feel enthusiastic when I enter an airport terminal. At the beginning of every year I take my time to set up my travel schedule for the year ahead. Melbourne Collision Repair Fair, Autopromotec in Bologna, SEMA show in Las Vegas, and then trainings, presentations, meetings… Russia, Turkey, Georgia, France… While I was looking at the map, I realized that all of the automotive coatings industry has its roots grown mainly from four countries: USA, Germany, Japan and, surprisingly from the small Kingdom of Netherlands.

Please note that the information I used here comes from the official websites of the companies. If I missed something or made some mistake, please feel free to correct me by commenting on this post. It would be great to learn more about all the leading companies in automotive coating industry.

 

Why there?

Initially, let me explain to you my thinking. I guess that some of my dear readers may not agree. First of all I took into consideration pure numbers, and as they say “numbers don’t lie”.

65% of the market of automotive OEM and refinishing coatings is shared by only five global corporations. Not ten, nor twenty, just five! Here they are: PPG, BASF, Axalta, Sherwin Williams and Akzo Nobel. It is worth adding also two Japanese giants with continuously growing presence across the globe: Nippon and Kansai Paints. Clearly, the vast majority of automotive coatings are developed in only four countries: USA, Germany, Netherlands and Japan! Let me elaborate upon this with a bit more information.

United States

Undoubtedly, American coatings manufacturers are undisputable leaders in the global market of automotive coatings. Three out of four biggest producers have their headquarters in the US.

PPG 

PPG Industries (Pittsburgh Plate Glass) was founded in 1883 as a plate glass factory, while in 1900 PPG entered the coatings business. In 1960s the company is already supplying paint to car manufacturers, becoming one of the leaders in this industry. PPG was the first company to introduce in 1986 water paints to OEM, while with acquisition of ICI Autocolor (now Nexa Autocolor) in 1991, PPG strengthened its position in waterborne paint technology launching first waterborne refinish system in 1992. Acquisition of ICI Autocolor was also the first step for the European expansion. However, PPG didn’t stop there, and in 1997 the company acquired Italy’s oldest paint manufacturer (founded by the Swiss entrepreneur Max Meyer in 1895).

Axalta (former DuPont Coatings)

Another global automotive coatings leader is Axalta, which until 2013 was known as DuPont Performance Coatings (as a division of American conglomerate, which was founded in 1802). DuPont was the first company to introduce in 1920 quick-drying multicolor paints. However, the past and modern history of Axalta was influenced by acquisition of two iconic German automotive paints brands. Spieshecker a renowned German brand, founded in 1880, probably is the oldest brand, dedicated to vehicles, since it was created to supply varnishes for coaches from the very beginning, while refinishing products were already available in early 1900s. In 1999, a German brand – Spieshecker, part of Hoechst Group was acquired by DuPont Performance Coatings. Another German brand, Standox, established in 1955 as a brand name of the German factory with long history– Herberts from Wuppertal merged with the American giant.

Sherwin-Williams

The company with a distinctive logo – Earth covered with paint – was founded by two businessmen in 1866, just after the end of the American Civil War. Henry Sherwin and Edward Williams were pioneers in what is now American paint industry. Sherwin-Williams international expansion came quite late though. While the brand was well represented in Americas, in Europe it was completely unknown. In 2000, Sherwin-Williams acquired the Italian company from Aprilia, called ScottWarren. However, the acquisition didn’t bring to the American brand expected results, and after a few years the production site was shut down, and about two years ago Sherwin Williams withdrew from Europe all together. It was a bold move, which left many distributors very unhappy. Nevertheless, Sherwin Williams made, from my point of view, a checkmated move when it announced a merger with another American paint behemoth – Valspar Corporation.

Valspar

Valspar is one of the oldest paint companies in the USA. It is fifth largest in the North America, with long history, which begins in 1806. Samuel Tuck, the founder of what is now Valspar, opened paint dealership under the name “Paint and Color” on Boston’s Broad Street. In a decade, the company started production of paints itself. In 1870, business with a name “Valentine & Company” moved to New York, and began to specialize in vehicle finishing varnishes. It is worth mentioning that among various brands in Valspar’s portfolio, there is an iconic “House of Kolor”, which was founded in 1956 by the legendary Jon Kosmoski. Since 2016, Valspar                                                                 Corporation was absorbed by Sherwin Williams, this acquisition was called by many experts as the deal of the new millennia in automotive paint industry.

 

Germany

BASF

BASF history begins in Mannheim in 1865 by a goldsmith and entrepreneur Friedrich Engelhorn under the name “Badische Anilin und Soda Fabrik”. Chemistry was always the lifeblood of BASF. Automotive coatings history of BASF is based on two historical names: Glasurit and R-M.

 

Glasurit

Glasurit’s recognizable symbol –the colorful parrot – for over a hundred years stood for quality and innovation. It was founded in 1888 in Hamburg by Max Winkelmann. The tradename Glasurit, by the way, came from “Glasur” (enamel). Glasurit was taken over by BASF in 1965. Nowadays many German car manufacturers recommend Glasurit as their preferred refinishing brand, due to the unsurpassable color matching properties and quality of all Glasurit products.

 

 

 

R-M

R-M was established in the USA by entrepreneurs Herbert Mason and Fred Rinshed in 1919 and soon became the largest paint supplier to the booming Detroit automotive industry. Notably, R-M was the first to introduce metallic colors in 1931, a mixing base system to its customers in 1948, and waterborne paint in 1970. In order to enter the US automotive coatings market, BASF acquired R-M – the company with rich product portfolio and history, in 1985.

 

 

 

Lesonal

Lesonal was established in Germany in 1858 by a pharmacist, who soon decided to produce paints. The company was among pioneers of cars paints, which it started producing in 1920s. In 1980s the brand was acquired by Akzo Nobel, and nowadays it is marketed as value-for-money and user-friendly paint system.

 

 

The Netherlands

Sikkens

In Netherlands or also known as Holland another titan of automotive coatings industry is located. Of course, I refer to Sikkens, the flagship brand of AkzoNobel coatings division. Sikkens counts more than 200 years of experience. It was founded by Wiert Willem Sikkens, who built a paint factory in Groningen. Notably, AkzoNobel is the largest paint-manufacturing group in the world.  Actually, the name of the chemical giant AkzoNobel was born after the merger of Akzo Coatings and the Swedish Nobel Industries. Besides Sikkens, AkzoNobel owns another prominent German brand, named Lesonal, which I referred to already.

DeBeer Refinish

De Beer Lakfabrieken was founded in 1910, and the factory has been producing car refinish paints from 1951. The brand was internationally recognized and, probably was the most successful independent and privately owned company. In 2004, it was acquired by Valspar Corporation, which merged with another American mammoth – Sherwin Williams.

Japan

Japan is the home of the world’s largest vehicle manufacturer – Toyota Corporation. Besides Toyota, the land of the rising sun, gave birth to such names as Nissan, Honda, Suzuki, Mazda, Daihatsu, Subaru, Mitsubishi … Taking into account Japan’s preference for locally manufactured products, it is not surprising that local automotive coatings producers would appear. Japan’s leading automotive paint suppliers so far were more concentrated on their region, however it seems that they will also push into established markets, like Europe. Will they disrupt status quo in Europe, for example?

Nippon Paint

Nippon Paint was established in Tokyo by Moteki Jujiro in 1881. The company is considered the largest coatings producer in Asia. It has production sites all over Asia, including China and India. Nippon is among 10 largest coatings manufacturers in the world.

 

 

 

 

Kansai Paint

In some sources Kansai Paint is referred to as Asia’s largest paint producer. In any case the sales figures of Nippon and Kansai are very close. Kansai Paint was founded in 1918 in Amagasaki, Osaka’s suburb. In 1987 the company launched a new brand name – Alesco, which is well known in the Asian region. Kansai also have numerous production sites across Asia, Africa and Americas. Unlike Nippon, Kansai has started expansion to the European market by establishing production site in Turkey, and most recently, by acquiring Helios Coating Group from its Austrian owners in December, 2016.

Italy

I couldn’t finish this article without mentioning Italy. Although Italian paint brands never got close to their much bigger rivals from Germany, USA or Japan, I have to admit that Italian coating industry, just like Italian cars, always played an important role in the global market. Lechler, Palinal, Duco, ScottWarren are just some of the Italian independent brands, which all have a great history and benefited automotive paint industry by their inventions and incomparable Italian style.

Conclusion

From the above information, one could draw the following conclusions.

  • Historically automotive coatings industry has been developing near the centers of car manufacturing (USA, Germany and Japan)
  • Chemical companies have a competitive advantage by controlling and developing raw materials (see BASF and Akzo Nobel)
  • Research and development is a key component for success, therefore all the countries I mentioned before have highly skilled human resources available
  • Car refinishing coatings manufacturing is an integral part of the automotive industry in general, meaning that geographical location of the R&D and production will be dictated by the demand. Asia Pacific will overtake the Europe’s second place in demand and consumption within coming years
  • Africa will also be growing due to the lowest cars per capita ratio in the continent. Perhaps local companies, fuelled by the local sales growth (see Egypt), will have increasing role not only in Africa, but in other regions as well
  • Certainly, my list of the companies is not exhaustive. There are other big or small independent automotive coatings producers around the globe. I concentrated on those who, whether we like it or not, control the majority of the market. In addition, I mentioned only those companies, which have paint in their range, not the numerous brands with auxiliary products. It is another story, with a much broader geography.

 

What if you could only have one spray gun?

I really love to make assumptions of different kind. What if … I was invisible, what if I was a millionaire, what if you had limitless resources for your paint shop or bodyshop? The last one actually was a title for my blog post sometime ago. Here is another one: “What if I had just one spray gun for all my jobs?”

I sell spraying equipment for bodyshops for quite a long time now. Modern spray guns producers compete in consumption, ergonomics and design. New, sexy models appear virtually every year, tempting us to buy one. It is almost like with new models of smart phones, so when a new one comes, you absolutely need it. However, if you could only have a choice to keep one, what spray gun would it be? Please do not misunderstand me; I do not advocate using one and only spray gun in any bodyshop, big or small. Far from it, I suggest that spray guns are vital tools of a trade, and a sprayer absolutely must have minimum three guns: one for basecoats, one for clearcoats, and one for more viscose materials like fillers and primers.

What if

Which technology to choose from?

Before actually picking the preferred model, I would like to say a few words about the atomization technology, which is the most versatile to spray different coatings, both basecoats and clears. Remember the assumption, only one gun for all final coating jobs!

Unfortunately, in our industry we have in general a problem with standardizations (recall the post about MS and HS clearcoats)? Similarly, categorization of different spraying technologies is prone to questionable terminology. I will simplify and distinguish three main spray gun systems:

  • High pressure
  • HVLP
  • Trans-Tech or RP (reduced pressure). You can also meet a term LVLP, which means Low Volume Low Pressure, but it is not as common.

High-pressure spray guns choice I would drop first for its high material consumption and non-compliance to various legislations.

HVLP or Reduced Pressure?

By definition, they key difference between two technologies is that HVLP uses lower pressure in air cap, which is compensated with high volumes of air to atomize and deliver the paint with desirable finish results. Trans-Tech (or RP) alters the balance between pressure and air volume. Air cap pressure in RP is about 2,5 times higher (about 1.6 Bar), and therefore less air volume is needed (smaller compressor output as well required). Putting aside all technicalities, Trans-Tech spray guns allow us to spray better than HVLP such materials as HS and UHS clearcoats, without compromising the quality of basecoat application though. I vote for Trans-Tech/High Efficiency (Devilbiss), RP (SATA) or similar technology.

Gtipro Lite

Which spray gun is the one and only?

I have to admit that after being a distributor for Devilbiss equipment for more that ten years, I am bias. If I had to choose just one spray gun for application the final coatings in my bodyshop, it would be GTIPRO LITE TE10 with 1.3 fluid tip. Here is why:

– TE10 High Efficiency is probably the most all-around air cap in Devilbiss range. It is highly recommended for spraying both basecoats and clears (including UHS) by the majority of leading paint brands.

– Ergonomic gun body

– Lightweight – only 446 gms

– GTIPRO Lite gives the possibility to switch easily between different nozzles without the need to change the air cap.

– Low air consumption – 270 l/min

– Low material consumption

– Smooth, kick free control

 

And what is your spray gun of choice?

 

Aerosol paint in auto body shop. Historical snapshot.

by Alexander Aslamazis

Aerosol sprays are used widely in a modern car repair shop, including painting area. In the past, spray paints were mainly considered as DIY products, however nowadays aerosols have more and more usage by real professionals. The quality of the finish and spray fan have improved significantly. Moreover, some coatings, like primers and fillers for spot repair jobs are the preferred solution. Additional advantage is that you spray exactly the quantity you need, and no spray gun cleaning is required after the job is completed. Last, but not the least, a sprayer in car bodyshop can find in the market aerosol sprays, which have hardener capsule imbedded, meaning that high quality and fast drying 2K materials can be applied.
It might be interesting for you to learn when actually aerosol cans were invented and how this handy product developed over the time. Below is a short infographic for your attention.

Aerosols history infographic

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