‘Although many people are starting to speak about a global financial recovery, we’re still in the midst of a unique period for the world economy. High volume food producers are continually under pressure – costs are still rising while selling prices are falling or at best staying the same.
The industry challenge is remaining efficient, successful and profitable in today’s financial climate. However, to keep things simple, we have to assume product quantities, volumes and any direct costs are all fixed. This means the only way to increase profitability is by achieving higher outputs for less cost. Here are tna’s top tips for helping to ensure efficiencies and maximise net profit in the packaging world.
Improve efficiency through overall equipment effectiveness (OEE): OEE can have a dramatic impact on overall costs since a connected dependant system with no buffering will pass on all its inefficiencies to the next system. This can result in an alarmingly low line efficiency. To ensure the equipment you have fulfils your requirements, it is also important to evaluate your product mix (i.e. bag size/flavouring per shift).
If you have no finished goods storage and a delivery requirement of less than five days your plant will contain a lot more machinery than one that produces just a single flavour in one size. It is critical to agree on some limits to flexibility and analyse the worst case (product mix) scenario. This, in turn, determines how many and what type of machines you need. When multiple products and sizes are being produced, flexibility can improve labour utilisation and reduce order fulfilment times. Machine Seasoning should be considered, for example, to keep equipment running instead of having to stop the line and processing for complete clean downs.
Reduce rejects: There is no value in producing rejects – plants should always run equipment at less than 1% rejects and make every effort to drive it down further. Rejects cost €8-22,000 ($10-30,000) per machine, per shift, per year. Look for systems that produce low rejects and, if possible can adapt to the conditions automatically. If you want reliability, look for simplicity. Just like equipment efficiency, the more elements you add to a machine, the greater the effort to keep them all up and running reliably and efficiently.
System integration – adjust and maintain all products through one machine: Savings in waste and time can be significant when product changes are centralised. It is easy to forget to change best before coder settings, for example, and run off a batch of bags with the wrong code. Well-designed systems force the machinery to be consistent in configuration and assembly – the results are optimised and predictable.
Select options that make it easier to keep your machines running: Dual film spindles options which hold the packaging film are a good example of this. In this case, one reel of film is already loaded and can be re-joined as soon as the film runs out. It is important to limit machine stoppages. Although these can be quite short, the response time of the people needed to address the stoppage is usually much longer. Automatic film splicing is an effective way to ensure the machine continues to run efficiently. You can get back between 5% – 10% runtime.
Invest in equipment with lower running costs that can be upgraded: Software updates can be an easy and cost effective way to improve the machine’s performance or add new, valuable features. Make sure you have this option on equipment you purchase and look for longevity or upgrade paths in the control platforms.
When looking at profit margins, there is often too much focus on capital cost or pure speed. We need to take a step back and look at systems in context, plus manufacturers need to clearly appreciate what is currently happening, what they would like to happen and what boundary conditions they should apply now and in the future. It is only then that they can make the right decisions on what and how many systems should be purchased.
Sometimes you need to spend money to make money and sometimes you don’t.’
Bob Fritz has over 20 years’ experience in the industrial equipment, food and packaging industries, including roles at General Motors Holden, APD Snack Foods and running his own industrial design and service business. He joined tna in 1989 and is now director of business development.