Is packaging automation right for your business?
April 5, 2018
When it comes to determining if automated packaging equipment is right for your business, the answers aren't always black and white.
But in general, there are a few standard factors to consider. Answering the following 5 questions can aid in your decision-making process.
1. What is your package type?
Automation works best for standardized products and processes. If your package type is irregular, custom, enormous, or unpredictable, automating the packaging process can either be very expensive or very impossible.
A packaging equipment expert can lend their expertise to determine if your particular product or package type is a fit for automation and if you would benefit from standardizing your formats.
2. How many bags per minute do you require?
If your throughput needs are relatively low or inconsistent, packaging automation may be overkill. Below are some general examples of production rates on flexible packaging machinery. Keep in mind your rates will vary depending on your product and process.
- Vertical form fill seal machines: 30 - 300 bags per minute
- Automatic pouch filling and sealing machines: 30 - 200 bags per minute
- Multilane stick pack machines: 40 - 80 bags per minute per lane
If your throughput estimates are way above standard speeds, don't worry, production increases can be achieved with the use of multiple systems or additional lanes.
If your needs drop far below those minimums or you plan to use the machine only intermittently, semi-automatic or manual solutions may be the answer for the time being.
3. Would you benefit from reduced labor costs?
The obvious answer to this question is ‘yes’. But when you slash labor and still need to produce, your packaging machine must pick up the slack, and more. According to Packaging Strategies, the question instead should be 'if you could run your packaging line faster, could you reduce labor costs?'
Determine how much you are currently spending on manual labor per year and how many hours your packaging line runs annually. Then determine how much you could save per year by reducing or eliminating those manual labor positions. Packaging Strategies estimates the savings to be about $25,000 - $35,000 per position annually.
There are also recurring expenses to consider. With human labor, the cost of health benefits alone is sky-high and increasing. In contrast, the only recurring expenses associated with a packaging machine are maintenance and spare parts, which can be very minimal if the machine is built for simplicity, durability, and longevity.
4. Are you prepared for the upfront investment?
Let’s face it: Packaging automation is not cheap. And it shouldn’t be; you truly get what you pay for in this industry.
Initial investment for high-quality packaging machines can run anywhere from high five-figures up to millions of dollars. And while it is easy to fixate on the initial price tag, take a few moments to consider total cost of ownership.
Do some forecasting and calculate how much you will spend if you maintain the status quo versus your estimated future spend if you automate. You may be pleasantly surprised at how little time it could take to recoup your initial packaging equipment investment. We're talking months or years, not necessarily decades.
5. Is your packaging process customized?
Like in almost every industry, custom equals higher cost. Research & development, engineering, and the one-off nature of a custom packaging system means more resources are required, which drives up costs significantly. Not to mention custom system development means a longer lead time.
That’s not to say custom systems aren’t worth it; they most definitely can be. But the additional costs must be carefully weighed against potential future gains. Often a custom system can eliminate manual labor but will require advanced (read: higher dollar) technical labor for maintenance and operations.
There’s also the question of whether the custom system can be used over time for more than one application.
Sometimes, after running the numbers, it just isn’t worth to try to automate a very complex and ever-changing packaging process. At that point, a CPG company can look at isolating standard parts of the process for automation. A packaging equipment specialist can help you weigh all of your options.
Calculate the ROI on a potential packaging machine investment
Determine if packaging automation is for you with our free Packaging Equipment Return on Investment Calculator. This comprehensive spreadsheet allows you to input your unique information to determine how many months it will take for a packaging machine investment to pay for itself.
Would you rather talk to a real person? Our packaging equipment experts are standing by to guide you through the process. Contact us at 920.564.5051 or request a free consultation online 24/7.
