Counting the Cost

Counting the cost of lost production

Companies using pressure-sensitive labelling machines could be in for a shock if they calculated the complete cost of lost production as a result of both poor machine utilisation and reduced efficiency from unsuitable equipment and materials. That is the conclusion of machinery and materials supplier Pago UK, which has recently developed a new computer programme called Pago IQ to help analyse cost and performance issues with labels and labelling machinery. In one case involving a toiletry product and a rotary machine they calculated that a more appropriate label with better quality materials could have saved downtime costing £300,000 in a year. The programme works from a series of inputs including basic data on the product being manufactured such as filling speeds, factory gate price, all value added factors including the cost of the packaging, actual post-labelling output and machine downtime. Downtime can be caused by any number of things, but it gives a starting point to identify the line efficiency, versus the utilisation factor. If someone has a complex business in which there are a lot of changeovers, then their utilisation will be low because of the number of changes that they make, but they may be able to run very efficiently when they are running. In his experience, low utilisation as a result of high complexity means that lines rarely reach their theoretical efficiency levels anyway. In that sense it's a guide, helping people understand the basis of making decisions on what machines to purchase because obviously, if you've got a highly fragmented business you want machines that are very quick to set up - with minimum changeover time between sizes - and you want them to be capable of reaching maximum speed very quickly. Nevertheless there is an inescapable link between machines and materials, a simple web threading path can for example significantly impact on edge nicks in the reel. Often what prevents the machine achieving its efficiency is that the materials are not specified correctly, not solved by putting expensive labels through an incorrectly specified machine, particularly if the often cheaper machine cannot be set up quickly. The Pago IQ programme also includes a complete checklist for operators, helping them identify some 54 different material-related problems although just 15 label quality issues account for some 80 per cent of problems experienced with labelling machines.