Inkjet Recycling Cost Analysis

Important Cost Factors to Consider OR

LEARNING TO CONTROL THE SEEMINGLY UNCONTROLABLE!

W2/ Rm. Venetian D         1:00-2:30 PM

Benjamin A LylesLegacy Manufacturing, LLC

Program Outline

Quality Report

Visual Inspection

Circuit Test

Performance Sample

Cost Analysis

QUALITY REPORT

All documents within a company must have a practical function.

- Supplier- Invoice and packing list information- QC tests and tests results- Distribution- Archiving

VISUAL INSPECTIONCorrect part number

- Is it a 23D and not a 41A

Correct count (packing list)- Received only 95, not 100

Physical damage- Cracks, missing nozzle plates, etc.

Packaging procedures- Proper protection for circuits, etc.

CIRCUIT TESTGeneral Averages

HP45/15: 1-2%HP26: 2-3%HP29/20/78/56/57: 6-8%HP49/23: 8-15%Lexmark 70/80/16/26: 8-

12%

PERFORMANCE SAMPLE

How do you REALLY know a component conforms to incoming specifications?

- Randomly pick from different boxes or randomly from the same box

- Sample size is dependent on number size of lot, but be practical

- Have an established criteria for approval or rejection; >75% PASS

COST ANALYSIS

(Core/cost factor) +

(Material/cost factor)+

(Labor/cost factor) +

Overhead + Miscellaneous=

Cost of Sellable Cartridge

COREExample:

500 ea. HP45A @ $5/ea.

- Circuit Failure: 7 ea. (1.4%)- Damaged: 5 ea. (1%)- Non-virgin: 2 ea. (<1%)- Failed print test: 45 (9%)

Core Cost Factor: 1 – (59/500) = 0.882

MATERIALExample:500 – 14 = 486 cartridges to recycle

Ink Cost Factor: 1 – (45/486) = 0.907

Seal Cost Factor: 1 – (45/486) = 0.907

Label Cost Factor: 1

LABORExample:Inspection Labor: 500 x $0.10 =

$50

Process Labor Cost Factor:1 – (45/486) = 0.907

Packaging Labor Cost Factor: 1

OVERHEAD & MISC.Example:

Overhead per sellable cartridge:$1.25

Miscellaneous:

Shipping costs of cores: $100/500=$0.20

TOTALSExample:

Core: $5.00 / 0.882 = $5.67

Ink: $0.74 / 0.907 = $0.82 ($7/#; 48 grams/cart.)

Seal: $0.05 / 0.907 = $0.06

Other materials (tape, clip, label, box, etc.): $0.75

Labor:

$0.10 + $1.50 / 0.907 + $0.15 = $1.90

Overhead: $1.25

Miscellaneous: $100/500 = $0.20

Total: $5.67+$0.82+$0.06+$0.75+$1.90+$1.25+$0.20

$10.65 cost per cartridge

COST REDUCTIONSIn-house collection: 250 @ $2 ea.Core: ($5.00/0.882 + $2.00/0.95)/2= $3.89

Ink: $0.74 / 0.93 = $0.80 ($7/#; 48 grams/cart.)

Seal: $0.05 / 0.93 = $0.05

Other materials (tape, clip, label, box, etc.): $0.75

Labor:

$0.10 + $1.50 / 0.93 + $0.15 = $1.86

Overhead: $1.25

Miscellaneous: $50/500 = $0.10

Total: $3.89+$0.80+$0.05+$0.75+$1.86+$1.25+$0.10

$8.70 cost per cartridge

CONCLUSION- START WITH A PLAN- CREATE A SYSTEM FOR

DOCUMENTATION- CONTROL, CONTROL, CONTROL- ANALYZE, ANALYZE, ANALYZE,- FIND YOUR FINAL COST- REDUCE COSTS AS YOU GO- DECIDE IF PSYCHIATRIC HELP IS

NEEDED

Benjamin LylesVP Engineering

Legacy Manufacturing 518 17th St. Ste. 1630

Denver, CO 80202benlyles@legacyllc.com

303-446-2919