Business owners need to do all they can to increase their return on investment (ROI). The challenge though is that there are many ways to do this, one of which is to reduce labor costs by investing in automated packing.
The even bigger challenge is to know when the business is ready for change.
So how do you know if your business is ready to embrace a change from manual to automated packaging systems?
Do the Sums To See if Your Business is Ready to Switch to Automated Packing
To find out if your business potentially needs this change to increase ROI, you simply have to work out how many packages you need to complete per minute and then compare the cost of this with the costs that you would pay if the function was to be automated.
Packaging manually is always cheaper at first and there is no need initially to make any kind of major investment in terms of equipment. But this may not reflect on the long-term situation. However, another factor to consider is the shape and size of the packages you are shipping. Odd or unusual shaped packages may not fit into an automated system.
Once you have assessed the value of manual packaging, you can begin to assess whether automated packaging will reduce the staff headcount and therefore labor costs. What you need to do is compare the costs of employees who operate manual equipment with the costs of automatic machines. The reality is that in many cases machines (including those who operate them) will reduce costs dramatically.
Determine the Needs of Your Business
If the initial math indicates that you will benefit by switching to automated packing, then take the exercise a step or two further. Once you establish that this is the route to take you can make more important decisions in terms of what packaging solutions will work best for your business.
Here are some important questions you can ask yourself to help determine how many packages per minute (PPM) you actually need.
- Is the packaging speed in your business determined by upstream production? If it is, then the speed of production will be setting your PPM. If not, there’s a good chance that your product is accumulated prior to packaging and moved in bulk to be packaged. In this case, the packaging machine you use will set the PPM. By switching to automated packaging, you could halve the time it takes to pack your products, and in this way save a huge amount of money.
- If you were able to run the line faster, would you be able to reduce your labor costs? To answer this question you need to know how much you are spending on labor and also establish how many hours the line runs. If you can in fact run the line faster, you can potentially save thousands of dollars every year.
So go do the math! Once you are done, weigh up your options and see where to go from here. Chances are you’ll be heading up the profit margin with a really good ROI if you go for automated packing.
For advice on automated packing, call the friendly professionals at Technik Packaging Machinery. We’ll do all we can to help you succeed in your business.