When should you replace your packaging equipment?
All equipment has a finite life. In the case of packing machinery, life expectancy is generally in the region of 10 to 15 years. Business owners, managers and operators will be very well aware if an ageing piece of equipment has slowed down, or needs increasing maintenance, or if it is creating damaged or imperfect packs. If the bill for remedial work is too high, or if repair work is not going to make the machinery properly usable, it is time to replace it.
If you want to fulfill the demands of your clients or set you up for expansion into new markets, you may also need to add equipment to increase capacity, or to set you up for expansion. It’s possible that you’re going to bring the packaging function in-house from outside packers, or that you’re starting out on your own in the packaging world.
You need to be absolutely clear about the following issues and activities when buying a new food packaging machine, regardless of what your reason might be for doing so:
Installation, testing and commissioning
Maintenance and support
The business must commit to a thorough process involving key decision makers from the very beginning of a project requiring significant new capital investment. In many cases, delays in projects are due to the time it takes for companies buying new equipment to reach internal agreement and make decisions. By taking a thorough, organised approach from the beginning, delays can be avoided and costs can be minimized.
Making a budget for new equipment
Budgeting is the process of determining where the money comes from and how the expenditure fits into the overall financial position of the business. The financial figures within a business case provide a clear picture of the expenditure needed for new machinery. Some businesses will have an annual allocation for new equipment that could be used to cover costs, while others will invest on a case-by-case basis.
Projects should not be considered as a standalone consideration in business finances, regardless of how you approach them. It’s possible that the money spent on one project means that another one will be delayed. A business’s decision to invest in a particular investment is likely to be based on the business cases put together for it. Competition for financial resources is an inevitable part of business life.
The net present value (NPV) approach should be used to drill down into the full costs over time, since it is essential to budget thoroughly. The project sponsor should have the support of the company’s finance team in order to ensure that NPV calculations are in alignment with the company’s thinking. Key cost issues include:
Additional budgeting and cost considerations include the method of paying for the equipment. It is possible to purchase the equipment outright, but it is advisable to explore instalment payments, leases, and hire arrangements for a lower initial capital investment. Depending on your organization’s availability of finance, you will likely make your choice based on the advantages of each option.
What is the cost of a packaging machine?
There are many factors that influence the food packaging machine cost
, including the type of materials used, the technology used, and the size of the machinery. Entry-level machines are often only a few hundred pounds for small, low volume packaging operations. A fully automated system can cost tens of thousands of pounds or more at the top end of the market. Packing solutions are becoming increasingly popular through leasing capital equipment.
Which types of packaging machines are there?
In total, there are almost no limits to the number of packaging machines that have been developed. However, they all fall into two primary categories: primary and secondary. Packaging that contains the product itself, such as foil wrappers for confectionery, bags for breakfast cereal, or cans for beverages, is referred to as primary packaging. A secondary package could be a film wrap around confectionery, a carton for a bag of cereal, or a paperboard tray and shrink film for a group of canned drinks.