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Coming Clean: The Much Hyped Y2k Computer Meltdown May Not Be The Biggest Equipment-Related Hurdle Your Business Will Face In The New Millennium
By Greg Bukosky
Contrary to what you’ve heard, the much hyped Y2K computer meltdown may not be the biggest equipment-related hurdle your business will face in the new millennium. New legislation is currently overhauling the cleaning process for rebuilders in California, and it won’t be long before shop owners and equipment manufacturers everywhere will be faced with similar challenges.
The big news is coming out of California where the South Coast Air Quality Management District (SCAQMD) has enacted new regulations (1171 and 1172) that prohibit airborne polluting solvents effective January 1, 1999. These SCAQMD regulations mandate major reductions in the amount of smog-creating volatile organic compounds (VOCs) that can be emitted by cleaning solvents.
Past regulations required cleaning solvents to have an output of under 900 grams per liter, or 90 percent VOC. The new regulations allow for only 50 grams per liter, or five percent VOC. According to SCAQMD, the switch to aqueous-based cleaners will be equivalent to the elimination of 365,000 automobiles in the Los Angeles Basin.
An estimated 40,000 solvent-based parts cleaning units are to be converted or eliminated in light of these new regulations. As of press time, several other heavy industrial regions throughout the U.S. are also considering similar requirements, including Chicago, IL, and St. Louis, MO.
Many industry insiders expect these regulations to be challenged in court in the coming years. One of the major points of contention is the partial exemption from the SCAQMD regulations of the aerospace and semiconductor industries in the Los Angeles Basin which are the region’s largest employers and tax base revenue generators.
As Lyle Haley, sales and marketing manager for Shawnee Mission, KS-based Peterson Machine Tool, Inc., put it, "We’re not yet convinced that these new regulations and alternative cleaning methods are legal or cost-effective. However, you can bet that if we do find that there is a better ‘mouse trap’ we will have equipment available to our customers that incorporates these advantages."
Whether or not stricter VOC regulations will find their way to your part of the country is anyone’s best guess. The point is, as a shop owner, you should prepare yourself today for the future. Likewise, the best starting point is get a clearer picture of the major factors, current and future, that influence your cleaning expenditures.
Where do you stand today?
The first thing you want to do is itemize your current cleaning costs in a monthly report form. The goal is to end up with a "snapshot" of your current cleaning expenditures. This should include all your fixed costs such as equipment loans/leases and insurance. Fixed costs aren’t affected by changes in volume or down time. For example, your bank loan stays the same whether you do one engine a month or a hundred. These costs are fairly easy to calculate.
A little harder to figure are your variable cleaning costs. A review of your last year’s records is the best place to start. The goal is to come up with an average for each category. Items to include in your variable costs are labor, utilities, cleaning materials, equipment maintenance, regulatory compliance and waste disposal.
According to the ‘98 Machine Shop Market Report completed by Babcox Publication’s Market Research, disassembly and cleaning still represent the largest investment in time required for machine shops to rebuild an engine at 15.2 percent. Sources for this article that estimated cleaning only (no disassembly) reported that total man hours represented anywhere from eight to 20 percent of the total rebuilding process. Average wages for cleaning personnel ranged from $9-$12 per hour.
One of the main things to pinpoint in the labor category is whether or not your cleaning personnel spends 100 percent of their time cleaning. For example, some cleaning methods are more automated than others; meaning workers can complete other unrelated tasks while cleaning is in progress. This is an important consideration when purchasing new equipment. You may pay a little more for an automated system, but you can now pay one worker one wage to do several different tasks.
According to Scott Dooley of Scott’s Auto Machine & Parts, Co., Fayetteville, GA, the future of cleaning should be totally automated. "Our hope is that the manufacturers will design and build a machine that can completely clean an aluminum cylinder head that can go right to machining without any hands-on time required by shop personnel, Dooley said. "If it increases productivity and efficiency, it’s bound to make us money."
Ed Kiebler, automotive aftermarket manager for Sunnen Products, Co., St. Louis, MO, echoed these thoughts. "In today’s shop environment, you can ill-afford to have someone scraping, wire brushing, glass beading or sanding by hand. Competitive pricing and the lack of qualified machinists are putting a tremendous pinch on profit margins. Modern cleaning equipment is one area in which profits can be recouped. By using a system that eliminates as much hand preparation and handling as possible, shops can free up labor to do other things that bring in revenue," Kiebler said.
Next, you’ll want to estimate your average utilities expenditures, including water bills. Start by totaling your utility bills from the last 12 months. Divide this figure by 12 to get your average monthly cost. Since this figure will include costs for all of your shop’s equipment (honing, boring and grinding machines, etc.) you’ll have to estimate what percentage of your total equipment is used for cleaning.
Now divide your total average monthly cost by the percentage used by your cleaning equipment. For example, if your total monthly electric bill is $1,000 and you estimated that 10 percent of that is used by your cleaning equipment, your monthly utility cost for cleaning equipment would be $100.
Dooley estimates that his shop spends $400-$600 per month on cleaning equipment utilities, depending upon the volume of work moving through the shop.
Bare in mind that certain cleaning systems, especially hot baths, require a constant power source to remain at proper operating temperature. Conversely, when you turn off your honing machine at night, it uses no more power until you turn it on again the next morning.
Next, you’ll want to estimate the monthly cost of your cleaning materials. The trick is not to go by how much you buy every month, but what you actually use. Often, this figure will be higher or lower depending on volume and type of substrate being cleaned. As this can be difficult to pinpoint, take your yearly expenditures and divide by 12 to reach your average monthly materials cost.
An important point to keep in mind about solvent-based materials as they relate to regulatory compliance, is that often the Environmental Protection Agency (EPA) will check to see how much you bought for the year and compare this with the amount you disposed of over the same period of time. The bottom line: keep accurate records for your own protection.
Equipment maintenance is a variable cost that many shop owners overlook when calculating their total cleaning expenditures. According to Doug Anderson of Grooms Engines, Nashville, TN, his shop spends approximately $500 per month for preventative and breakdown maintenance. This includes things like replacing the fire box in the thermal ovens every eight years to replacing the water pumps on the jet spray washers, as well as periodic oiling, lubing and painting of the equipment itself.
Larger operations like Jasper Engine & Transmission Exchange, Jasper, IN, will spend up to $3,000 per month on preventative maintenance due to the sheer volume of engines being processed, according to Mike Schwenk, vice president. Like any production line facility, when one vital piece of equipment goes down, the whole operation grinds to a halt.
When purchasing new equipment, be sure to ask the manufacturer for a list of shops currently using the type of equipment that you wish to purchase. By calling these shops, you will gain a more accurate picture of what your monthly maintenance costs will be.
Jay Miller, president of A.R.E. Industries, Inc., Wichita, KS, stressed that before shop owners buy new equipment they should talk with the manufacturers who have been in business for at least 15 years. "These companies understand the complexities of the market, and have gone through all the R&D so shop owners don’t have to," Miller said. "Get references and call these people. Ask them if they like the machine, and if they’ve had any problems. Most importantly, ask them if the manufacturer resolved the problem for them. That’s the true test."
In terms of regulatory compliance, shop owners must be careful to calculate the hidden costs, as well as the obvious. Most shops reported costs from $500-$3,000 per month in actual fees paid to regulatory agencies for licenses, permits and filing charges.
For machine shops still using solvent-based cleaners, i.e., mineral spirits, terpene and dilimonene, there are many costs that go above and beyond the figures mentioned above. For example, the EPA, Occupational Safety & Health Administration, (OSHA) and Department of Transportation, (DOT) require items like written manifests, spill response plans, hazardous handling training and fire prevention equipment to be in place, subject to fines for non-compliance.
Shops are also expected to provide air monitoring and ventilation systems, emergency first aid stations, material safety data sheets, training manuals and spill containment procedures on-site. In addition, cleaning personnel are required to wear proper safety gear including respirators, neoprene gloves and full-cover eye protection all provided at the employer’s expense.
Jim Minor, territory manager for Cleveland, OH-based Chemical Solvents, Inc., emphasized that many of these requirements are for the good of the shop owner. "Eighty percent of all OSHA audits are initiated by disgruntled employees," Minor said. "Most of the OSHA requirements are actually a liability barrier for the shop owner.
Take, for example, the hazardous materials training guides. By following the OSHA guidelines and having the trainee sign off that they received the information, the shop owner will have a permanent record on file should that employee encounter health problems, due to non-compliance in the future. Yes, the employee has a respiratory problem. No, they didn’t wear their company-provided respirator 100 percent of the time."
Obviously, keeping up with this type of record keeping is time consuming and costly. To quote a common phrase, though, "You can pay me now, or you can pay me later." Be sure to include the costs of preparation, training time, printing, etc. in your total expenditures for this category.
The last item to figure is your waste disposal program. Depending on what type of cleaning method you use, this figure will fluctuate.
Most machine shops surveyed used a combination of disposal methods. Mainly, this consisted of some sort of pre-treatment of the contaminated solution where the solid waste is separated and removed by a licensed disposal firm. The remaining untreated solution can be filtered and recirculated to the cleaning equipment, evaporated in a steam process, treated chemically, or totally replaced, depending on the cleaning process being used.
Most cleaning equipment manufacturers reported having some form of oil skimming system that will remove free floating, non-emulsified oils. These systems generally will not remove any emulsified oils or heavy metals found in the waste streams. Waste materials must be disposed of with the utmost of care, stressed Miller.
"Responsibility for the shop owner is ‘cradle to grave’ in terms of waste disposal," Miller said. "Use common sense and follow all state, local and federal laws. Just because your waste has been buried in a landfill doesn’t mean your liability has ended. Dump sites these days are set-up in a grid-like pattern that tells who dumped in a particular spot, what was dumped, and when. Even if that particular dump site closes, a shop owner can still be named in a lawsuit years down the road if tests reveal illegal levels of toxic waste."
Because of this liability, some shop owners are turning to firms like Chemical Solvents, Inc., who offer one-stop shopping for all their cleaning needs. Shops generally lease the actual cleaning equipment from the company which then provides all the cleaning solutions and off-site disposal for the machine shop. The price for this service includes all regulatory compliance paperwork, testing and dumping fees as well.
"We don’t expect a small-to-medium size shop to understand all the complexities of the law," Minor said. "We provide all the equipment, i.e., drum-mounted washers, rinse tank washers, agitation tanks and immersion cleaners. We custom mix the cleaning solution depending upon the application, we service the equipment, we handle and haul the waste, fill out all the paperwork, and eventually dispose of the materials.
"Perhaps most importantly, we also test and certify the waste before it’s taken to the landfill. This is like an insurance policy for the shop owner should any problems arise in the future. There are never any ‘surprises’ five years down the road," Minor emphasized.
Other machine shops around the country are starting to use the bioremediation method of waste minimization. (See February, 1999 Automotive Rebuilder, page 48.) This is particularly cost-effective because the shop doesn’t have to pay for waste disposal and the large percentage of regulatory fees and practices are eliminated due to the aqueous-based nature of the process.
According to ChemFree, of Norcross, GA, they’ve developed an aqueous-based parts washing system that generates no VOCs, requires no service contracts, and no off-site removal of hazardous waste. In addition, cleaning effectiveness doesn’t degrade with use, which means lower materials costs over the long term.
ChemFree uses the sink-on-a-drum system in sizes which can handle parts as large as an engine block. After an industrial strength cleaning fluid called OzzyJuice® cleans the part, proprietary microbes called "Ozzy" eat oils, grease and other waste contaminants. Simply described, OzzyJuice cleans the part, while Ozzy cleans the fluid. The main benefit is that users seldom have to change the cleaning fluid (occasional topping off is required).
Depending on shop volume, bioremediation cleaning processes can save money over the long term by reducing materials expenditures, regulatory compliance and hauling/testing/dumping charges.
Another cleaning company with similar product offerings is Tempe, AZ-based MiraChem Corp., a division of Innovative Environmental Products, Inc. MiraChem currently offers a turnkey parts washer lease and service program to help companies cost-effectively convert from their old cleaning processes with little or no down time.
If you’re not prepared, changes in cleaning regulations can severely impact your business. This article is intended to give you a better understanding of exactly where your shop stands today in terms of total expenditures and regulatory compliance.
The ultimate goal is to develop a baseline from which future technologies can be evaluated. Are the new products and processes better and more cost-effective? Hopefully, now you will be better positioned to make the right decisions when the time comes.