Outsourcing Powder Coating Solutions: 7 Factors to Consider

For manufacturers considering adding a powder paint coat line to their operations, the decision of whether to invest in an in-house coating line or Outsourcing Powder Coating Solutions to an expert provider can pay massive dividends. 

While the allure of greater control and perceived cost savings may make in-house powder coating seem attractive, a closer examination reveals compelling reasons to outsource.

At Acme Finishing, we’ve been in the powder coating business for over 90 years. Our team prides itself on having the knowledge, facility, and equipment you need to be a trusted partner in all your powder coating needs. 

In this article, we’ll take the experience and dive into the financial, operational, and quality considerations that make outsourcing the smart choice for most manufacturers. By the end of the article, you’ll have everything you need to decide whether outsourcing is right for you. 

1. Financial Factors 

The capital investment required to establish even a basic powder coating line is substantial, typically $2 million or more. This includes the cost of application equipment, ovens, pretreatment washers, and conveyance systems. Additionally, lead times for new equipment often exceed 6 months, delaying the start of coating operations.

By outsourcing, manufacturers can avoid this large upfront expenditure and ongoing costs for maintenance, upgrades, and equipment replacement. Instead, coating becomes a variable cost tied directly to production volume. This cost can be easily incorporated into the piece price, simplifying accounting and cost management. Outsourcing converts a large capital expense into an operating cost, freeing up cash for other investments.

2. Facility Space and Opportunity Costs

Powder coating lines have a large footprint, occupying significant square footage that could be used for other revenue-generating production activities. A powder coating line may require only 1-2 dedicated operators, whereas that same space could potentially accommodate multiple CNC machines or other production equipment, each generating parts and revenue. The opportunity cost of dedicating floor space to coating should be carefully considered.

3. Labor and Staffing Considerations 

Operating an in-house powder coating line, even a small one, often requires adding 20-30 staff. This includes not just equipment operators but also material handlers, quality control technicians, maintenance personnel, and supervisors. Hiring this many people entails substantial costs for recruiting, onboarding, training, and benefits administration. Experienced coating line operators can be difficult to find in many labor markets. High turnover in entry-level coating positions leads to increased training costs and can impact quality.

By outsourcing, manufacturers sidestep the HR challenges of hiring and retaining this additional workforce. The coating provider assumes the responsibilities of staffing and training, letting the manufacturer focus on core production personnel.

4. Equipment and Technology

The equipment required for an efficient, high-quality powder coating operation goes far beyond just spray guns and an oven. Automated application equipment is needed for consistent coating thickness and appearance. An advanced pretreatment washer with multiple stages is required for good coating adhesion, often using an iron phosphate cleaning chemistry. 

Sophisticated conveyance systems with part-tracking capabilities are important for production flow. Inline ovens must have precise temperature control and airflow management. On the quality control side, instruments like coating thickness gauges, gloss meters, color measurement systems, and particle gel counters are all important.

Each of these equipment systems and instruments requires a significant capital outlay to acquire and ongoing investment to maintain. Outsourced coating providers can spread these equipment costs across a larger volume of work, achieving economies of scale. They are more likely to have the latest equipment technology, as it is core to their business. 

Most manufacturers can’t cost-justify the ongoing investments required to keep coating equipment on the leading edge.

5. Safety, Compliance, and Liability Factors

Powder coating operations entail a number of potential safety risks that most manufacturers may not be well-equipped to manage. Ovens operating at 400°F or higher pose a burn risk and may increase the likelihood of a fire. Combustible powder dust requires special handling to mitigate explosion risks. Chemical pretreatment solutions must be properly stored and disposed of. Operators must wear appropriate PPE and be trained in safe operating procedures.

These safety considerations increase the costs of insurance and workers’ compensation for manufacturers. Compliance with OSHA regulations and local building codes or permitting requirements can be complex and time-consuming. If any safety incidents do occur, the manufacturer bears the liability.

By outsourcing powder coating solutions, most of these safety and compliance burdens are shifted to the coating provider, who is likely to be well-versed in the latest standards and best practices for safe powder coating operations. They are better equipped to shoulder the costs of regulatory compliance and can spread these costs across many customers.

6. Quality and Expertise

While powder coating may seem straightforward, there are many nuances involved in achieving a consistently high-quality finish. Experienced coating technicians are part chemist, part artist. They must select the right coating formulation for the substrate, part geometry, and performance requirements. They have to understand how different colors and gloss levels behave in application. Matching color consistently across batches takes skill. Troubleshooting finish quality problems requires a knowledge of how the many process variables interact, from pretreatment to application to cure.

Outsourced powder coaters have this expertise because it’s their core business. Their staff are trained in all aspects of the process. They work closely with coating suppliers to develop new coating solutions for challenging applications. They invest in quality control equipment and implement statistical process controls to monitor coating consistency. 

Most manufacturers struggle to develop the same level of coating expertise in-house because it’s not their primary focus. The result can be inconsistent quality, rework, and rejects.

7. Supply Chain Benefits When Outsourcing Powder Coating Solutions 

 Incorporating an in-house powder coating operation into a lean, just-in-time manufacturing environment can be challenging. Coated parts may sit in queue for some time before being assembled, increasing inventory carrying costs. The coating operation has to be carefully scheduled and tightly integrated with the production line to avoid delays. Any unplanned downtime in the coating line can quickly starve downstream assembly operations.

By outsourcing powder coating, manufacturers can often reduce total inventory levels and improve turns. Coaters can deliver parts on a just-in-time basis directly to the point of assembly, eliminating the need for large buffer stocks. Their large capacity can absorb fluctuations in demand, providing greater flexibility. Parts spend less time in process, reducing opportunities for damage.

Manufacturers are also freed from the distractions of managing a complex in-house coating operation. They can focus on their core production activities and on serving their customers, rather than being bogged down in the day-to-day challenges of running a finishing line.

Is Outsourcing Powder Coating Solutions Right for You? 

For manufacturers, the decision to outsource powder coating is often the smart, most strategic choice. 

Outsourcing offers compelling financial benefits, reducing capital expenditures and converting unpredictable fixed costs into variable costs that scale with production. 


  • Frees up valuable floor space and personnel for core revenue-generating activities. 
  • Provides access to the latest coating technologies and equipment without the need for continuous reinvestment. 
  • Shifts the burdens of safety, compliance, and liability to a partner who is better equipped to manage those responsibilities. 
  • Ensures consistent, high-quality results by leveraging the expertise of dedicated coating professionals. 
  • Simplifies the supply chain, reducing inventory and providing greater flexibility.

While in-house powder coating may be the right choice for a small subset of manufacturers with unique needs, for most companies the benefits of outsourcing are simply too compelling to ignore. 

By partnering with an experienced powder coating provider, manufacturers can focus on what they do best while trusting an expert to handle this critical secondary process.

Ready to explore your options for outsourcing powder coating solutions? Reach out to Acme Finishing, request a quote, and someone from our team will be in touch shortly.