How To Save Money On Packaging In The Long Run
Written By Simab Khan
Making savings and maximizing margins appears to be an eternal quest for any business, but what can often be the most challenging part of that is identifying where and how you can make those savings.
If you run a company that packages and ships goods regularly, an assessment of your packaging operations may help uncover some saving areas.
One effective way to save money on packaging, in the long run, is to make the switch to an automated packaging system. However, deciding to invest in something like a case erector system or palletizer system in Canada requires much consideration.
There are many obvious benefits to an automated system, but it will depend on your operations and needs, whether it is an investment that will pay off for you in the long run.
Assess Your Current Manual System
The first thing you need to think about before investing in an automated packaging system is your current manual system’s cost. You will have to primarily focus on the labour cost of employing one or several people to package and ship your product.
Based on Canada’s minimum wage rates, one employee working full-time on a packaging line can cost you anywhere between $25,0000 to $35,000 a year in labour costs. When you factor in the packages per minute (PPM) you get for that, you get an idea of the return you are getting for that particular investment.
Furthermore, packaging is a repetitive task that requires precision. As diligent and professional as people might be, there is always the possibility of human error. This can come from accidental damage to a package, or an item being poorly packed and damaged in transit.
Costs associated with damaged or returned items can also be factored in when considering how much your manual system sets you back every year.
Based on Canada’s minimum wage rates, one employee working full-time on a packaging line can cost you anywhere between $25,0000 to $35,000 a year in labour costs.
When Does the Penny Drop?
You may feel that your current manual packaging system is working fine for you. If you have been able to meet orders and avoid dips in quality, then you may find it hard to justify the outlay on an automated case packaging system.
However, it may only take one or two late orders or some superficial damage to a couple of packages for customers to ask questions. A loss of reputation can be costly too, and hard to recover from.
Things don’t even have to be that dramatic, though. A manual packaging system may also be what is seriously inhibiting your company’s growth. It can impose a maximum PPM rate which is hard to improve upon. Therefore, in terms of investment, you aren’t going to get too much bang for your buck when it comes to ROI.
One or two late orders or some superficial damage to a couple of packages can lead to a loss of reputation and hard to recover from.
Taking the Plunge
An initial outlay in an automated packaging system can be daunting, but it will pay for itself in several different ways. It can also help to boost your profits by increasing productivity and allowing you to redeploy packaging staff to more value-added positions.
Stacked against a worker’s cost in a manual packaging line over the year, an automated packaging system may seem like a massive investment. However, looking long term, it is an investment that will continuously pay dividends.
Some automated systems can involve an outlay of $50,000, while many can take you well into six-figure amounts. Of course, different operations’ requirements will vary depending on their size and other types of machinery required. For instance, a Robotiq palletizer can help speed up your end-of-line process, meaning loading and unloading can be performed efficiently. Investing in a palletizer can revolutionize your packaging and shipping processes, streamlining your operations and saving you time and money.
To start, there are several different options for financing investments in automated packaging systems in Canada.
You can purchase a machine outright and then deal with the regular maintenance and service costs as they arise. You also have the option of approaching a lender to help finance an outright purchase, although this will come with interest costs.
Many companies avail of a leasing scheme whereby they pay a set amount for the use of something like a palletizer or case erector. Many leasing schemes will have maintenance and service plans built-in, so you’ll know that the lease’s cost will cover everything.
Manufacturers can also avail of government grants to fund a move towards automation. The COVID-19 pandemic has highlighted the need for government help to allow companies to innovate and embrace new technology to stay competitive.
Last year, the Canadian government announced $32 billion in grants and incentives for manufacturers to invest in technology such as automation.
Whatever way you finance an automated packaging system, you will soon get a substantial return on your investment. Here are the areas where an automated system will not only save you money but help you make more too:
Automation can help to maintain quality standards throughout the process. Automated inspection equipment can spot irregularities and products or processes which fall below the accepted standard. Maintaining high standards means the likelihood of returns or refunds for faulty goods decreases.
Machine vision can also inspect products for completeness, such as ensuring a match between product and package in the food and pharmaceutical industries, and checking safety seals, caps, and rings on bottles.
Automation allows for traceability in the supply chain. This allows for raw materials which are combined to make finished goods to be traced at every step of the process. All materials will be assigned with unique identifiers and an automated system will be able to allow for traceability right to the source.
To ensure proper packaging traceability, food and beverage producers must be able to quickly identify and locate products in the supply chain.
Collaborative robots – or cobots – bring efficiency to the packaging process. Their lightweight and slim design make them ideal for a range of different tasks such as stacking, lifting, and palletizing. The robotic arm can be reprogrammed for a range of different tasks and the efficient design and operation mean longer service intervals, leading to a reduction in maintenance costs.
Collaborative robots can work in conditions from humid greenhouses to refrigerated rooms to tending hot ovens, relieving employees from repetitive tasks that can cause injury in unfavorable environments.
Sensors introduce a smart element to the manufacturing and packaging process. Smart sensor technology can pick up problems in real time and feedback data about performance. This data can help you spot where the bottlenecks are in your warehouse process and help to iron them out. They can spot inefficiencies in the process and reduce downtime, therefore increasing productivity and saving money.
When the emitted light is interrupted or reflected by the object, the change in light patterns is measured by a receiver and the target object or surface is recognized. Photoelectric sensors are very common in industrial manufacturing fields such as packaging, food and beverage, medical, and many others.
Working Out Your ROI
Calculating the return on investment you will get from installing an automated packaging system may seem straightforward – you just work out the labour cost and set that against the machinery’s cost.
However, it’s not quite as simple as that. A packaging line worker may cost you $25,000, and packaging machinery may set you back $50,000, but that doesn’t mean it will take you two years to see some return on your investment.
An automated system will dramatically increase your output and improve the service you provide. This allows you to take on more orders, meaning you can start to see a significant ROI within a year.
On the flip side, the cost of the machinery itself isn’t the only outlay you need to factor in. You may need to repurpose an area of your warehouse to accommodate the machinery, and there is the cost of running it as well.
Taking the First Step
Investing in an automated packaging system can be the first step towards saving money and boosting profits. However, many companies may not be aware of how and where to start.
Whether you want to find out where to buy a palletizer in Canada or which case packaging system to invest in and what options you have, contact us today to start saving money on your packaging costs.
At Shelley, we can help you visualize an automated warehouse system in operation. Our free vision testing shows you how you can integrate your requirements into an automated system.
With robot feasibilities, our robotics experts give you a try-before-you-buy experience. You can get an outline of the system that can provide the best solution for your needs. You’ll be given a step-by-step guide to the hardware you need and how it fits into your work cycle so you will know what to expect once it hits the warehouse floor.