Worried about wasting profits? Here’s how as a manufacturer, you can calculate the ROI of your checkweigher to help maximise the bang for your buck.
We’ve previously discussed the benefits of lean manufacturing and how to boost your business’s operational efficiency and competitiveness. But there’s one very obvious way to reduce waste on the production line, and boost your bottom line along the way, and that’s with a checkweigher.
Checkweighers are critical to measuring and monitoring the efficiency and cost of a packaging line. They can check food and non-food products to ensure weights are within specified limits and automatically remove any packs that aren’t. At the same time, by providing all-important feedback data needed for quality control, checkweighers can quickly become an indispensable tool for saving cost on any production line.
Checkweighers can also be used to “count” items. For example, a pack of 100 nails should weigh X. When a checkweigher measures the weight of the pack, if it is less than X then more nails can be added before the pack is sealed.
However, as with any equipment, a checkweigher requires up-front investment. So how quickly will it provide a return? Whether you’re looking at investing in your first checkweigher or upgrading to a new model, here’s how to work out the return on investment (ROI).
Must-know checkweigh terms
Before we delve into the calculations, there are some terms you need to know:
- Nominal weight: stated weight, regardless of the actual weight
- Gross weight: total weight of the contents and packaging
- Net weight: weight of just the contents
- Giveaway: portion of the product that is above the nominal weight; this part is not charged for and therefore equates to lost profits — a checkweigher helps reduce the giveaway
What’s the big deal about giveaway?
The ROI of your checkweigher essentially comes down to the giveaway; that is, the portion of your product that is not charged for. While it might not seem like much on the surface, even the tiniest amount of product over the nominal weight can quickly add up and impact your bottom line.
Let’s assume a factory produces 200 packs per minute for 16 hours a day.
- 200/min x 60min/hr x 16hrs = 192,000 packs per day
Production efficiency for the factory is 60% and operates 235 days (5 days per week x 47 weeks) per year.
- 192,000 x 60% = 115,200/day x 235 days = 27 million packs per year
If the factory can reduce giveaway by 1 gram per pack, and each gram is $0.001 or 1/10th of a cent per gram ($0.001), what can they save?
- $0.001/pk x 27million packs = $27,000/yr
That’s a massive saving of $27,000 per year! And that’s $115 every day that the line runs.
The more accurate your checkweigher therefore, the more money you can save. Even with a small packet of nuts, eliminating the tiniest amount of overfill could add up to massive savings.
So should you care about giveaway? If you want to improve your bottom line, the answer is YES.
Calculating your checkweigher’s ROI
To calculate your checkweigher’s ROI, you need to weigh up the giveaway savings with the cost of a typical checkweigher and what your company’s accountant considers as a “reasonable payback time”.
For example, if the factory above pays $30,000 for the machinery, then based on say $26,000 savings, it will take them less than two years to break even. If the accountant considers a reasonable payback to be three years, then this makes your checkweigher a strong investment.
But it’s not just about the giveaway…
There are many other reasons manufacturers and food processors should invest in a checkweigher. One of the most important is to conform to regulations — of the industry bodies and the supermarkets. The Woolworths Quality Assurance (WQA), for example, mandates checkweighing for Home Brand products, and highly recommends it for all products. (See here for some interesting information on the WQA.)
This too can impact your bottom line. For instance, where automatic checkweighers are not installed, Woolworths’ auditors have been known to ask processors and packers to carry out quality control weight checks on the line every 15 minutes.
Let’s put this into perspective: assume you have a facility of eight lines packing products, and allow two minutes per check per line (including travel time). That equates to 16 minutes of time needed every 15 minutes. Alternately, what if you have only one production line with a 15-head filler. Each head needs a separate sample taken, so you’re in the same position as the company with the eight production lines.
Drive out variability
Many influences can cause fluctuations in the weight of packaged goods. However, regulations state that these weight fluctuations must not cause the net weight of a single package to fall significantly below the stated net weight and the permissible underfill amounts.
Some manufacturers overfill packs to eliminate the risk of underfilling. But this is a costly tactic, and can result in massive product giveaway over time. The best tactic is to employ a checkweigher to monitor and manage product filling. This eliminates the need for additional staff, while driving quality improvement through repeatable and reliable inspection.
Accelerate ROI with a local supplier
Another way to maximise the ROI is to choose a checkweigher that boasts exceptional reliability and lower life-cycle costs.
For example, our range of checkweighers is made in Germany by Bizerba and locally supported by Matthews Australasia. For manufacturers, this means a team of experts is on hand to provide upgrades, modifications and troubleshooting when needed. There is also local availability of spare parts, so in the event of a failure, you can be sure that downtime is minimised. This all adds up to accelerate ROI over the machine’s lifetime.
The bottom line
Checkweighers are traditionally associated with regulatory compliance, but there are big business benefits to be gained by using a checkweigher to reduce product wastage, tighten tolerances, and ensure more consistent products.
By improving weighing precision, checkweighers can provide an immediate positive contribution to profits. And because checkweigh technology can help you detect issues with product overfill or underfill, you can use the data to correct problems on the line and create a lean business.
Matthews has several blogs about lean manufacturing. You can find them all in our Lean Manufacturing & OEE section. You will also find some interesting material in our resource library, among our whitepapers, articles from our thought leaders, presentations, infographics, YouTube channel and so on. All material from our resource library is free to download.
And while you’re thinking about business improvement, this blog on how to get started with packaging line integration may also be of value.
Image credit / Aleksey Puris