Calculating the cost of your labeling system can help determine the productivity gains, precision, and overall value offered by automation.
If you’re like most manufacturing companies, you’re always looking for ways to control costs and cut back on unnecessary expenses. Though it may sound counter-intuitive, a recent manufacturing industry outlook report suggests that many manufacturers are looking to save money by investing in technology. Research has shown that nearly half of U.S. manufacturers are currently using at least one form of automation and plan to increase use in order to boost productivity.
Large manufacturing companies have reported that instead of cutting costs, they’re focusing more on operational efficiency. With productivity, technology, and standardization named as keys to success, more and more companies are turning to automation for the best Return On Investment (ROI).
Many manufacturing companies with products that need adhesive labels are using labeling machines for increased efficiency. Given the time, effort, expense, and waste of manual labeling, automating this task certainly seems to have promising ROI prospects.
But before you invest in a labeling machine, it makes perfect sense to do your homework and try to get an idea of what type of ROI you can actually expect. Let’s take a closer look at several factors that impact labeling ROI for manufacturing companies.
As with most purchases, there’s more to consider than the sticker price alone when calculating your potential ROI. For instance, when you buy a new car, in addition to the purchase price, you take into account what kind of gas mileage it gets, insurance rates, and property taxes.
There may be hidden costs to factor in as well. Is it known to be a reliable model from a reputable manufacturing company? If the car breaks down often and you can’t get to work, you could lose a day of pay. Is it difficult or expensive to maintain and replace parts?
Does the style of car meet your immediate needs as well as provide flexibility for the future (i.e., a couple expecting a baby may opt for a minivan over a compact car)? Being forward-focused can save you time, hassle, and money by not constantly being in a purchasing loop.
Likewise, when weighing the decision of whether to invest in a labeling machine, you’ll first want to consider the purchase from multiple angles to determine ROI. For a clearer comparison, begin by assessing the full cost of your current labeling system, including any equipment, materials, and labor. Also, make a list of hidden costs such as downtime, parts, and service, wasted materials due to inaccurate placement, etc.
Finally, consider whether your present system is merely meeting your immediate needs without allowing you the flexibility to grow. If you’re not looking ahead, it may hamper your growth potential, which could carry a cost of lost revenue.
The next thing your manufacturing company needs to assess in order to calculate the potential ROI for a new labeling machine is how quickly you’re able to turn product around using your current label application method.
On average, how many labels are you applying each day? How many seconds does it take to apply each label by hand? Professional labeling machines typically double or triple the number of labels you can apply each day, allowing you to significantly increase your productivity and while reducing labor costs at the same time.
Speed isn’t the only advantage that automatic labeling machines offer manufacturing companies. No matter the size of your operation, if you’re currently using a manual labeling application method, your product may not look as professional as you would like. Even the most eagle-eyed human is prone to err more than precision computer placement — employee effort could be used more effectively elsewhere in your operation for greatest efficiency, positively impacting your ROI.
Accuracy and consistency are important for many reasons, most notably affecting customer perception of the product and brand. People notice when labels are placed crookedly, inconsistently, or are not fully adhered — and may opt for a more professional-looking product instead. An attractive, well-place label speaks volumes about a manufacturing company’s quality standards.
Here’s an easy way to calculate ROI and see what type of gains are available with an automatic labeling machine.
As an example, if you are considering purchasing a labeling machine for $25,000 and predict a net annual benefit of $100,000 (via labor savings and profit from increased throughput), your return on investment will be:
Call us today to compare these costs/productivity with an automatic labeling machine.
At the end of the day, the primary consideration when it comes to calculating labeling machine ROI is overall value. What results can you consistently expect after purchasing the equipment? One key factor is to choose a reliable company to partner with — one that has a proven track record, is committed to quality, provides excellent training and service, and has parts readily available.
Pack Leader USA provides a full line of labeling machine options that offer excellent value to manufacturing companies. When it comes to improving the efficiency of your line (which impacts your bottom line!), we’re confident that our automated labeling machines will deliver an ROI that meets or exceeds your expectations.
If you have questions about the different types of labeling machines available, our experienced and knowledgeable team members are here to help you determine which options may be best for your operation. Contact us today for your free labeling equipment consultation.