Glass Mold Maintenance: LEAN Impacts EBITDA. Step B.
- Silvio Ruiu
- Jan 6
- 3 min read
Updated: Jan 24
P&L Statement - 100M Glass Bottle Plant.
(field collected data, average values, all data in the article same source)
Item | Value (M$) | % of Revenue |
TOTAL REVENUE | 100.0 | 100% |
Raw Materials | 22.0 | 22% |
Energy | 18.0 | 18% |
Labor | 20.0 | 20% |
Mold Shop (Maintenance/Cleaning) | 3.0 | 3% |
New Mold Purchases | 5.0 | 5% |
I.S. Machine Spare Parts | 4.0 | 4% |
Logistics and Other | 8.0 | 8% |
EBITDA | 20.0 | 20% |
D&A | 10.0 | 10% |
EBIT (Operating Income) | 10.0 | 10% |
Asset & OPEX Analysis - 100M Revenue Glass Plant.
This table breaks down the capital invested (Assets) and the annual costs to run them (OPEX).
Asset Category | Asset Value (M$) | Annual OPEX (M$) | OPEX Description |
Real Estate & Infrastructure | 45.0 | 1.0 | Taxes, insurance, and facility maintenance |
Melting Technology | 35.0 | 25.0 | Energy (18M) and Raw Materials (7M cullet/batch) |
Forming Lines (I.S. Machines) | 40.0 | 18.0 | Labor (14M) and Spare Parts (4M) |
Hot/Cold End & Lehrs | 15.0 | 1.0 | Coatings and annealing energy |
Inspection & Packaging | 20.0 | 18.0 | Materials (15M) and Labor/Maintenance (3M) |
Utilities (Air/Water) | 20.0 | 3.0 | Electricity and water treatment |
Mould Shop (Cleaning/Repair) | 5.0 | 3.0 | Specific maintenance and cleaning costs |
Molds Inventory | 10.0 | 5.0 | New mold purchases and refurbishing |
Logistics & Admin | - | 6.0 | Transport and management overheads |
TOTAL | 190.0 | 80.0 |
Crossing data analysis.
All molds (or moulds) must be cleaned appropriately, if they are worn out it is not only a shortening of their lifetime, also it is enlarging the cavity between the two blanks, it means you need more melted glass to get the same product and not mentioning the cost of the job needed to fix the seams; so affecting the operational efficiency of the entire plant.
If we consider a 2% deviation in mold maintenance efficiency and a reduction of 25% of their lifetime, these pieces of metals are due to:
Asset Category | Asset Value (M$) | Annual OPEX (M$) | Risk/Inefficiency Impact (M$) |
Forming Lines (I.S. Machines) | 40.0 | 18.0 | 0.80 (2% Efficiency Loss) |
Molds Inventory | 10.0 | 5.0 | 1.25 (25% Life Reduction) |
TOTAL ANNUAL LOSS | 2.05 M$ |
EBITDA Impact Analysis.
Item | Optimal Scenario (M$) | Inefficient Scenario (M$) | Variation |
TOTAL REVENUE | 100.0 | 100.0 | - |
Total OPEX | (80.0) | (82.05) | +2.05M (Waste) |
EBITDA | 20.0 | 17.95 | -10.25% |
% EBITDA | 20% | 17.95% | -2.05 points |
Price of a minimum deviation from standards impacts massively on EBITDA that gonna say bye to about 10% of its value. Molds are not just the tool, are forming the glass through which a glassmaker makes his profits, only making molds lasting longer, reducing to 12.5% that 25% of life lost, already there is more than 1M coming back into the beautiful side of the calculus.
"If the forming line is the heart of the glass factory, the mold shop is its brain."
Not mentioning the benefits overall of a good molds cleaner that is not wearing processed parts and so it reduces the expensive task of reparing them.
Recovering, avoiding, controlling the loss.
Theory is always a fantastic world, still there two criteria easy to check for any plant manager if their deviation is getting over any reasonable number or is still under control:
5 – 10 rule: if the process has not been checked for the last 5 years it deserves a review; if the equipment in use is older than 10 years, the analysis should be about the process and the machine involved. Learn more here.
1- 1 (1 - 2 in US) rule: per each hour of blasting media consumption should not exceed 1kg; 2 lbs in US. Learn more here.
For corporates, while the mold shop is often seen as an independent entity and difficult to control remotely, also not really interesting with its own relatively low values in terms of asset and OPEx, indeed it is a KPI to evaluate operational performances; rather easy task to do just comparing media purchase (consumption) between similar size plants and understanding immediately who is underperforming and requires proper corrective actions.
Many glass plants have already installed a wheel blaster, usually forgotten there for ages, easily losing about 160k$/ monthly (2M/year) as shown above. CM itself delivered more than 600 equipment worldwide, if you realize you need any help checking age of the equipment and media consumption, you can contact here.
Summary of the analysis:
Step A: molds as primary asset of a glassmaker.
Clarifying importance of molds for glassmakers. Target: all people involved in glass industry from mold shop to corporate management.
Step B: Molds impact on EBITDA. (this article)
How cleaning of the molds impact on the P&L of a glass plant. Target: plant Managers and corporate management.
Step C: Professional standard inside the mold shop.
Technologies available and Lean manufacturing analysis. Target: mold shop Managers and Supervisors, plant Managers.
Step D: financial analysis of the options available.
Summarizing all the results under Lean manufacturing. Target: plant and corporate management.
