Optimize Return on Investment (ROI) of your Packaging Machines with these 5 Tips
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No matter you are a contract packaging company or a final end user as the processing and manufacturing company who will use the packaging machine to automate your end-of-line, the concern that comes above all is “How long can I get my investment paid back with this new packaging equipment?”.
What’s more, in order to meet your production plan and market demand, you should make sure that your packaging equipment is working at the best pace to constantly generate profit to your business, and thus recover your investment,
In this article, we discuss the Top 5 Tips to improve and maximize the ROI with your packaging equipment.
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What is ROI of a Packaging Machine?
ROI, or Return on Investment, refers to the profitability of investing in a particular asset, such as a packaging machine. The ROI of a packaging machine can be calculated by comparing the cost of the machine to the financial benefits it provides.
To calculate the ROI of a packaging machine, you would need to identify and quantify all the financial benefits associated with the purchase and use of the machine. These benefits may include:
- Reduced labor costs due to increased efficiency
- Lower packaging material costs due to reduced waste
- Increased production capacity and output due to faster cycle times
- Reduced maintenance and repair costs compared to older or less reliable machines
Once you have identified the financial benefits, you can then subtract the initial investment cost of the machine to calculate the net return. To determine the ROI, divide the net return by the initial investment cost and multiply the result by 100 to express it as a percentage.
For example, if the initial investment cost of a packaging machine is $50,000 and it generates $25,000 in annual cost savings and revenue increases, the net return would be $25,000. If you divide that by the initial investment cost of $50,000 and multiply it by 100, the ROI would be 50%.
It’s important to note that ROI is just one financial metric to consider when assessing the value of a packaging machine. Other factors, such as the total cost of ownership over its lifespan and its impact on product quality and customer satisfaction, should also be evaluated.
1. Make sure the manual cost is minimized
An adequately designed packaging equipment should be able to automate repetitive tasks to supplant manual work so that people can be set free to do jobs with more added value such as maintenance, design, and engineering. Humans are good at creativity, but when it comes to repeated processes we would make mistakes and cause losses. Leave these jobs to the machine.
It happens sometimes that a packaging machine installed is not uncomplicating the situation while totally on the contrary more people are required to keep the machine running, and we will be putting the cart before the horse.
Make sure that you are not complicating the situation. With less labor cost involved in keeping the machine, you can gradually achieve improved ROI with your packaging equipment keeping running.
2. Reasonably organize your shifts for different products
Packaging machines are frequently designed, installed, and required to fit various products with differences in sizes and formats. Switching between different products must have the machine paused and during this time, it is not generating any profit margins. Bear in mind the virtue of PDCA (Plan, Do, Act, Check) and below we have some tips for you:
- Standardize: Develop Standard Operating Procedures (SOP) for each packaging machine. This will help ensure that all operators follow the same process during changeovers, thus reducing errors and improving efficiency.
- Training: Ensure that all operators are properly trained on the SOP and best practices for changeovers. By doing so, they will have the necessary knowledge and skills to complete the changeover efficiently.
- Plan: Create a changeover plan that includes a detailed timeline outlining all tasks that need to be performed. This will help operators stay on track and reduce the risk of missing important steps.
- Schedule: Schedule changeovers during periods of low demand to minimize the side effects of downtime. This will allow the company to continue production without disruption and reduce the impact on profitability.
- Monitor: Collect data on changeover times and analyze the results. this will help identify areas for improvement and provide feedback on the effectiveness of the changeover process.
The key concepts here are that you should schedule your production plan reasonably so that the downtime when switching between different formats is not affecting your overall profit, and another concern is that the format and size changeover should be as fast as possible.
3. Choose packaging machines with more compact footprint
SME and start-up companies usually do not have large facilities to place a bunch of equipment. Here it makes sense to choose compact packaging equipment so that within a given and limited space, more packaging machines can be installed rather than a single one of it.
That being said, you will be maximizing your production rate per square meter with a compact packaging machine.
Our Crescendo Cartoner is one of the most compact high-speed cartoner on the market.
4. Standardize your packaging rather than “Unorthodox”
Packaging is used as a potent tool for marketing and especially with CPGs (Consumer Packaged Goods) whose packaging is a critical part to catch a consumer’s attention and then a decision to buy.
Companies, no matter in the consumer goods industry or more specifically in the food and beverage industry, usually commit the mistake to go too far with the design of their product’s packaging. The results are packaging styles that are too complex and strange or even weird to automate.
An example is the project we handled with De’Xandra where the perfume bottles are secured by the box with a neck-through pattern and the carton box has an internal securing tab.
Another example would be a cartoning machine designed for gable top carton boxes. While all functional stations on a gable box cartoner are designed exclusively for that packaging style, it is not able to be used for regular carton styles such as tuck-in or adhesive closure.
Example of De’Xandra Perfume Box Packaging
Designing your packaging in an “unorthodox” way can cause a series of problems including:
- Your packaging machine should be customized
- Your initial set-up cost will be more expensive
- The payback period for your investment will be longer
- Your packaging machine will be specifically designed rather than to fit a wide range of formats
5. Make sure you always have the OEM’s support
The fact people tend to neglect is that the OEM (Original Equipment Manufacturer) also plays a critical role.
While a packaging machine is supposed to work for years, reliable support from the OEM is essential throughout the lifecycle of the packaging machine and to get you backed swiftly up once there is any problem.
With reliable support from the OEM, end-users can get the maximum benefit out of the equipment through efficient operations, longer machine lifespan, improved productivity, and better training & in-house skill development.
Make sure that your packaging machine manufacturer is ready for a long-term partnership and that they are not only sales-oriented.
Talk with us
As a growing business in the field of secondary packaging automation, we are looking forward to hearing from you to discuss the challenges in the packaging you are currently faced with.
ELITER Packaging Machinery, a name of HUANENG Machinery, is a family-owned business, manufacturer and global supplier of cartoner machine, overwrapping machines and wrap-around sleever.
We are at your disposal by: info@eliter-packaging.com or by giving us a call.
