The Cost of Changeover for Packaging Operations
When running a business, one of the primary keys to success is cutting back on costs and maximizing the hourly production of your human labor. For product manufacturers, a steady line of packaging is critical in reliable output. Even small delays can result in significant losses for a company. Changeover, the process of swapping out parts of packaging machinery to convert a line to run a different product, is a regular part of production. It requires clean up of the equipment in place, setting up and adjusting the new line, and starting up the newly fitted equipment. The ability to minimize downtime is important when deciding on what brand or model of packaging machinery to use.
Calculating Changeover Costs for Automatic Packaging Machines
The formula to calculate how much money is lost during a changeover is very simple.
Line speed (packages per minute) x Contribution (price per package) x Average changeover time = Cost per changeover
Ex: 120PPM x $0.50 x 60min = $3,600
Cost per changeover x Changeovers per year = Annual cost of changeover
Ex: $3,600 x 200 = $720,000
Using these calculations, it’s easy to see that downtime costs rise steeply over time. However, longer changeover times also lead to reduced production capacity and an increased cost of labor per package. In addition to monetary impacts, there may also be intangible losses, such as negative customer response if changes in demands aren’t quickly met, reduced market share from lesser output, and stress on both workers and machines to get back to full operation speed.
All of these costs are important for business owners to recognize so that they can make more informed decisions when purchasing equipment, ordering repairs, and upgrading machinery. In fact, 74% of packaging companies already consider rapid changeover as “very important.”
Achieving Lean Changeover
The main goal businesses have for changeover is to reduce downtime by streamlining the transition process. Changeover in which there is no wasted machinery, labor, and time is called “lean changeover.” Achieving lean changeover means that a company has reduced downtime losses by as much as possible. This requires that automatic packaging machinery be high-functioning (to quickly shut down and start up) and adaptable (to facilitate conversion for every changeover). The machinery should allow workers to replace as little as possible to minimize the number of tasks that have to be completed during changeover.
Investment in automatic packaging machines is key to a business’ success. In addition to the equipment, when considering packaging machinery vendors, business owners should consider the availability of spare parts and service technicians as well as the ease of access to the machine’s critical components for maintenance personnel.