Packaging Automation Study: Market Challenges
Information and communication As with virtually every vertical segment in the manufacturing space today, packaging professionals are challenged to reduce costs, improve efficiencies and gain a competitive edge. This may seem to be a somewhat daunting task in light of other economic forces bearing down on the business – increased raw material costs, increased transportation expenses and ...
Information and communication
As with virtually every vertical segment in the manufacturing space today, packaging professionals are challenged to reduce costs, improve efficiencies and gain a competitive edge. This may seem to be a somewhat daunting task in light of other economic forces bearing down on the business– increased raw material costs, increased transportation expenses and shorter cycle times – particularly since many of these costs are either inflexible, subject to the whims of commodity markets, or vulnerable to fluctuations in the U.S. economy. Digital edition of supplement and research study are available .
Regardless of the cause, however, packaging professionals are increasingly turning toward information-enabled automation technologies to get the job done. “We’ve found that those organizations considered industry leaders are not only introducing more automation into the packaging process, they’re also ensuring that machines can communicate and share data both upstream and downstream on the line, as well as into the extended enterprise and supply chain,” says Craig Resnick, research director with ARC Advisory Group.
This bidirectional communication enables packaging equipment to proactively report real-time data, such as raw material consumption. This not only helps with forecasting when and how much raw material needs to be ordered, but it can also communicate with an organization’s procurement system and automatically trigger an order request. Such a system helps packaging professionals to accommodate day-to-day fluctuations in demand while eliminating both production-stopping raw material outages and unnecessary inventory storage expense.
Another key trait of industry leaders, says Resnick, is the ability to calculate and dynamically report overall equipment effectiveness (OEE) in real-time. Such functionality enables managers to identify problems which could impact the performance of a line, respond immediately to correct the situation (such as a jam upstream in the process), and return to the expected level of efficiency.
When asked “within the next five years, which automation and control system features are likely to become most important,” more than half (52%) of all respondents indicated “OEE,” with an additional 42% indicating that “human interface” would also be critical. The ability to capture, calculate and display information in real-time at the source delivers the immediate feedback necessary to improve processes and reduce costs related to unplanned downtime.
As any consumer-facing manufacturer can readily attest, contending with changes in customer preferences and reacting to product trends is one of the most challenging aspects of the job. Tastes change, form factors change, and keeping ahead of the competition often requires a combination of reinventing (or repackaging) top-performing products and ensuring that a continuous stream of new products are introduced to the marketplace. This requires both equipment and individuals on the packaging line to have the agility necessary to accommodate rapid shifts in demand.
Product proliferation, consumer demands
One market condition driving greater need for agility is the ability of retailers to understand precisely what types of product are selling most briskly in what location. As point-of-sale (POS) systems continue to become more tightly integrated with corporate and enterprise management applications, retailers have far greater insight into sales activity than ever before.
Reaction to these shifts in demand will be pushed down the supply chain and manufacturers will need to fill orders with the right product, in the right quantity, at the right time to meet their obligations. According to research data, 38% of respondents indicated that their packaging lines require product changeovers several times per day. Another 18% indicated that changeovers occur at least once per day, while another 22% indicated that changeovers occur one to two times per week. Only 15% of respondents indicated that changeovers rarely occur or that they are dedicated to single-line packaging.
The most prevalent reason for line changeover, according to the survey, is production of a different or new SKU (61%), with changes in package size coming in a distant second (31%).
Control labor costs
Gain production efficiencies
Gain competitive edge
Flexibility (handle various sizes & configurations)
Read other articles in the Packaging Automation Benchmark Study, Part 1:
Barriers to success: Complexity & variation
Within the context of the survey, we asked: “How are your current systems deficient?” The goal was to identify from our readers, in their own words, where the automation technology they have in place today is falling short of meeting their needs.
Although comments ranged from manpower-related issues to poor utilization of existing technology, there were two recurring themes. These included:
Greater interoperability and openness
“There needs to be more connectivity between equipment… we also need to have downtime analysis to measure production line performance.”
“[Current solutions] are comples, not modular enough and not interoperable enough.”
“Devices don’t talk to each other very well. Often, inter-machine communication is by switch interlocks, even when the machines are smart enough to talk to each other at control-to-control level, or have data fed via SCADA.”
“ [There needs to be] standardization of communication protocols and system components as well as wiring practices.”
Line complexity and volume
“We are fairly new, but have 30 plus new food items we will be coming out with, starting with 3 items next month.”
“[Current systems] are not versatile enough to handle multiple SKUs.”
“Due to the many different SKUs, it is difficult for us to be able to utilize a lot of automation.”
“We require too many human hands in the process.”
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Annual Salary Survey
In a year when manufacturing continued to lead the economic rebound, it makes sense that plant manager bonuses rebounded. Plant Engineering’s annual Salary Survey shows both wages and bonuses rose in 2012 after a retreat the year before.
Average salary across all job titles for plant floor management rose 3.5% to $95,446, and bonus compensation jumped to $15,162, a 4.2% increase from the 2010 level and double the 2011 total, which showed a sharp drop in bonus.