Showing posts with label Pricing. Show all posts
Showing posts with label Pricing. Show all posts

Monday, February 1, 2010

Regrind and the cost of quality

One subject often comes up in discussions with our customers: regrind material. In this blog post we will explain the different types of regrind and why regrind is important to quality.

A Polycarbonate resin plant typically produces 50,000 MT of resin per year. These lines are a continuous production process, operating 24 hours a day, 7 days a week. Each line may produce a number of different grades and when they transition between the grades they do not stop producing. Instead they produce something known as transition material; transition material is between the specification of the initial grade and the grade being transitioned into. Up to 10% of the production of a line may be classified as a transition material.

As the production line is a continuous process, operational problems can also lead to off-specification production. Off specification production may account for another 10% of the production. Between transition material and off specification production as much as 20% of the line output may not be within specification – representing 10,000 MT per year. Obviously this figure varies between manufacturers and also depends on the types of grades being produced on any particular line.

A manufacturer of resin must then decide what to do with this out of specification resin. One option is to sell the material at a discounted price. However, the preferred option is to melt the resin pellets and feed them back into the production process. The amount of resin that is reprocessed again depends upon the manufacturer; but if we look at the figures as much as 10,000 MT of off specification material could be used to make the 50,000 MT of saleable prime resin.

When the resin is then used to make Polycarbonate sheet we also have a similar situation. Changes between different grades and sizes of Polycarbonate sheet can lead to off-specification production. Also when Polycarbonate sheet is being produced the edges are normally not flat and so are trimmed off – this material is then known as edge trim. Both off-specification production and edge trim can then be broken into small pieces in a grinder and then recycled into the sheet extrusion line; this material is known as regrind. In some cases of commodity sheet production as much as 60-70% of the sheet can be composed of regrind material.

Recycling of material, both in the resin and sheet production, can help keep the cost of sheet down – particularly for commodity sheet. However, recycling of material does come at a cost. Polycarbonate is degraded by heat and the more times heat is applied to the material (especially at temperatures high enough to melt and mix the material), the greater the degradation. This degradation manifests itself in three ways, black specks, yellowing and deterioration of mechanical properties. The greater the level of recycled material in the final product (whether from resin or sheet), the greater the possibility and magnitude of problems such as black specks, yellowing and deterioration of mechanical properties. For many commodity applications the price of the sheet is of great importance and the benefits of recycling during production significantly outweigh the consequences. In some applications it may indeed be acceptable to use low priced sheet made from 100% regrind.

At HighLine Polycarbonate we concentrate on high-tech applications requiring exceptional optical and mechanical properties where black specks and yellowing cannot be tolerated. While we take many steps to ensure the quality of the product, we do pay particular attention to recycling. We use only the very best resin from Teijin. Teijin is a Japanese company and is the world’s third largest Polycarbonate resin producer. The grade of resin that we use has no recycled resin in it. Also, most of Teijin’s resin lines are relatively new having been installed in the last ten years. Having modern resin lines also improves the quality.

When we produce the sheet we also do not recycle any off specification material or use any edge trim material. Many other manufactures claim to not use regrind material, but often recycle edge trim material. By using only the very best resin and not using any regrind we are able to produce the very best material for the most demanding applications. Of course there is a cost to quality, but there is also a benefit in some applications.

Friday, January 22, 2010

Polycarbonate sheet - the cost of custom production

Polycarbonate is extruded into sheet by large production lines. The more specialty lines typically extrude 3,000 lbs/hr, while commodity lines extrude 5,000-10,000 lbs/hr. For some of the large lines, if they take ten minutes to change dimensions, they could easily generate over 1,000 lb of off specification material, which will either need to be recycled or scraped.

Non-standard width

The maximum width of the sheet is governed by the width of the die installed on the line; most large lines have a die that can produce 96” wide sheet. The extrusion lines produce most efficiently when they are running at maximum throughput, which means running the maximum width of 96”. One option that sheet extruders have is to cut the sheet in half while the sheet is being produced, this process will give two sheets of 48” wide. The widths of 48” and 96” are some of the most common widths. Because they can be produced cheaply they have become industry standards and are nearly always in stock at the major producers and distributors.

If a customer needs a non standard width, this can be achieved by extruding 96” wide material through the die and then cutting down the edges by in line saws. Any off cut material can then either be recycled or sold as scrap. If a customer needs dimensions such as 95” wide or 47” wide, there will not be much scrap generated, even though the material would still need to be custom produced. If the customer needed a width such as 75”, proportionally more scrap would be generated and the cost to produce would go up. For widths of say 60”, the scrap ratio would be too high and the producer could stop the line and block off part of the die to limit the width of the sheet being produced. The stoppage would obviously lead to lost production and then the machine would be run at a lower, more inefficient rate because the die width would be lower. All of these factors add to the cost.

Non-standard length

The length of the sheet is more easily controlled. During production an in-line cross cut saw is used to cut across the sheet. The length can be set to almost any value (as long as it is not too small). It is therefore possible for a producer to make custom lengths without too much additional cost.

Non-standard thickness

For stocking purposes the major producers have standardized on a number of thicknesses – 0.060”, 0.118”, 0.177”, 0.236” are some examples. These sizes are normally carried in stock in both 48” x 96” and 72” x 96”. Adjusting to another thickness really only involves some minor changes to the die and chrome polishing rolls; these changes are quick and do not generate much off specification production. As a consequence, non-standard thicknesses are not difficult to produce, but manufacturers normally insist on a reasonable minimum order size. Also manufacturers will normally only produce non-standard thicknesses against an order, as they do not have a general need for the material. Because the material is custom produced, manufacturers often quote a long lead-time.

Non-standard color

For custom colors, introducing a new color to the line causes a lot of scrap changeover material between the production of the old color and the production of the new color. The lines are not shut down and cleaned between color changes, as that would be too inefficient. Manufacturers dislike frequently changing colors, and often plan large color runs to improve efficiency. Asking a manufacturer to stop the production of a clear material to produce a few hundred pounds of a red material is not likely to be received well, as the change-over produced from going from clear to red and then back to clear is likely to be many thousands of pounds. A manufacturer can not offer a competitive price if they produce ten or more pounds of scrap for every pound of good product.

Summary

Standard production sizes and colors have been established to improve efficiency and reduce cost. If a customer needs a non-standard product it is likely to be more expensive and require greater lead-time and larger minimum orders. Non-standard colors are the most costly, followed by non-standard width, followed by non-standard thickness, with non-standard lengths being reasonably cheap to produce. Considering these factors during product design can help in minimizing later costs and ensuring availability for the customer.

Wednesday, November 25, 2009

Specific gravity and what every purchaser should know.


On most Polycarbonate (and other polymer) technical data sheets there is a number called the specific gravity.   The specific gravity of Polycarbonate is 1.2 and is one of the most important numbers on the data sheet for purchasers.


Specific gravity is the ratio of the density of the material to the density of water.  As the density of water is 1000 kg/m3, this means that the density of Polycarbonate is 1200 kg/m3.

To convert the density from kg/m3 to lbs/ft3 you need to multiply by 0.0624.  This calculation gives a density of Polycarbonate of 74.88 lbs/ft3.  In this way we can easily calculate the density of Polycarbonate in lb/ft3 from the specific gravity figure on the data sheet.  

The density is an important value for purchasers of Polycarbonate sheet.  It can help answer questions such as "If a supplier says that the Polycarbonate resin prices have gone up 10 cents per pound, what effect would that have on the cost of 1/8" sheet?"

To answer this question we need to be able to convert from $/lb to $/sqft.  We can do this conversion with the help of a simple equation:

Cost ($/sqft) = Cost ($/lb) x Density (lb/ft3) x Sheet thickness (inches) / 12 

So to answer our question on the effect of an increase of $0.10/lb for resin on the price of 1/8" sheet, we can plug the numbers into our equation:

Cost ($/sqft) = $0.10/lb x 74.88 lb/ft3 x 0.118 inches /12 

Cost ($/sqft) = $0.074 /sqft

So a 10 cent per pound increase in Polycarbonate resin price will increase the cost of 1/8" sheet by 7.4 cents per sqft.  

[Note: Nominal 1/8" Polycarbonate has a thickness of 0.118"]