The best approach in evaluating wrapping machinery is to look at the Total Cost of Ownership. However, some products requires specific kinds of wrap in order for issues of product preservation to be effective. As I wrote in Deciding How to Wrap, product and marketing requirements are paramount. Beyond that, it is important to think about how much a wrapping process will cost over the life of the machine that is performing it.
The increasingly prevalent method of Total Cost of Ownership requires that a prospective buyer look not only at the cost to buy and install, but the cost to operate for the period of time the machine is depreciated. While the cost to buy and install is clearly the largest single payment, the cost to operate is much greater over the life of the wrapping machinery. Problems arise because often these items are in a separate budget. Labor, material, maintenance and energy are easy factors to overlook since they don’t hit the capital budget, but they do have a major impact on profitability over the life of the wrapping machinery.
Several years ago we did a study of material usage between overwrapping, flow wrapping and shrink wrapping. See the discussion here. It was very clear what material savings there were in a switch from flow wrap to overwrap. When it comes to comparisons with shrink wrap, we know there are some significant savings because of the waste film in shrink and the loose wrap prior to shrinking, although it is not measurable from store samples. It is estimated at 20% by customers who have measured it.
Shrink wrap uses 60 amp service for its shrink tunnel (oven). The PMC over wrapper has only 30 amp service for the whole machine. In fact, one customer based their projected savings on the reduction in energy costs and skipped any material savings calculations. Flow wrap energy use is similar to overwrap.
Most buyers expect machines to reduce their operating labor component but they do not always calculate all the sources of labor costs on the machine.
Labor comes under a couple of categories: operating the machine, changing over the machine for film, product sizes, etc and maintenance. If you are running or plan to run multiple product SKUs, then understanding how long it takes to change from one size to another is critical to any labor savings. It is also important to know how much attention the machine needs for loading, unloading or product guidance.
Labor savings usually come from intrinsic functions of the specific wrapping machines. No one type of machine is necessarily more efficient in use of labor than another but differences exist between machines in a specific category. A dedicate operator for a machine clearly has a higher cost than an operator spread over several machines.
The questions of maintenance usually involves how complicated the machine is and how often it needs routine or preventive maintenance. This is probably the hardest one to address since it requires hindsight to have nay confidence in potential costs. One things we noted when we started building our all servo FA-ST wrapping machine was that 65% of the moving parts on the mechanical overwrapping machine went away. Those are parts that do not need to be replaced or adjusted. There is clear potential labor savings in knowing that.
Make sure that you are doing an apples to apples comparison, or as close as you can get to apples to apples. Evaluating wrapping machinery properly requires
- knowing the product requirements
- getting all marketing requirements factored in
- estimating operating costs post acquisition
in order to make a cost effective and, therefore, sustainable decision.
Let us know if you would like to see our whitepaper on this or any other topic.