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The colour of money
08 May 2008
Dagenham based Colourite Metal Treatments has had a costing system overhaul that has not only increased turnover but has resulted in an energy saving of 12%. MAS helped the company introduce some lean techniques that allowed it to reduce scrap and defect rates by 50% and cut energy costs by 12%.
The seven-strong company specialises in anodising and metal finishing for a wide variety of products that includes automotive parts, sculptures and architectural pieces. As the company’s name suggests, one of its key capabilities is coloured anodising, with a vast range of colours on offer and the ability to match specific colours if required – as it recently did to create an army bronze for a customer working on a defence contract.
The company turned to MAS when it needed advice on developing a new product costing system in order to accurately allocate variable and fixed costs to each job.
Says managing director Mike Byrne: “We needed an accurate costing system in order to calculate which jobs were making us profit and which were losing us money. We called in the help of the London Manufacturing Advisory Service (MAS).”
Nigel Rust, manufacturing specialist at London MAS said: “I used the London MAS network to find and work with Frank Doyle from Soloman, a specialist in engineering costing processes. The changes in the costing system enabled the company to make pricing decisions and improve financial control resulting in an increase in profitability, turnover and value added.
“After putting into place a working costing system we performed a lean diagnostic and calculated that Colourite Metal Treatment’s biggest cost was energy. We introduced some lean techniques and reduced their scrap and defect rate by 50% reducing energy costs by 12%.”
Mr Byrne added: “This is the best programme we have ever been involved in, the results are amazing and we have seen rapid improvement in profit.”
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