Automate or Perish: The Future of Pad Printing in the U.S.A.
When the overseas competition pays less for labor than we do for lunch, it’s time to do some hard thinking. With some planning, rational investment and a little creativity, you can compete and win by automating.
Speed is the name of the game. Speed reduces the labor cost per part and helps buy back the initial capital investment more rapidly. Flexible, high-speed equipment allows you to print more jobs in a shorter time with fewer people. In today’s “just-in-time” environments, faster throughput can also be used as a selling point to your customer.
On typical applications, the “speed limit” is substantially higher than most people have been led to believe. We can commonly reach 30–40 parts per minute on multi-color applications, even when an operator manually loads the parts. This type of speed will distance you from your competition up the street and across the globe.
How do we achieve it? Part conveying accessories.
Viability will come with doubling or tripling your production cadences. To do this you must take the plunge into faster equipment with parts handling capability. Otherwise you will continue to lose every job that grows to more than 100,000 pieces per year and as we all know, these jobs are where the money is.
Every job over 10,000 pieces should be automated in some way. (Repeat jobs of over 1,000 pieces should be automated as well.) The automation does not have to be complex. Two fixtures on a small rotary dial will increase your output tremendously and will not cost much more than doing it as a single station.
There is no avoiding the fact that this will cost some money up front. If you look at the math, though, it really isn’t all that painful. Let’s say that you have twelve automotive jobs that average 75,000 pieces each per year. On average you are printing 10 parts per minute. With downtime, change over, etc. that is about 2,000 hours worth of labor. At $25 per hour, that is $50,000 worth of work. Not bad. If your real costs are $20 per hour then your gross profit is $10,000. Twenty percent isn’t bad, but it won’t pay for much in the way of future upgrades.
To automate the process, you need to spend an additional $15,000, but you increase your production cadence by an easily attainable factor of 2.5. Total hours drop to 500. Thus gross profitability increases to $40,000. The new profit margin less the capital investment is an astonishing $25,000.
Better yet, you have 1,500 additional hours left on that shift for other jobs. Plus, you will not need to find additional skilled operators to keep up with demand. Maybe you can even give them a raise. Your customer will be thrilled by the faster turn around and you now have plenty of margin to give them a price break if competition comes knocking.
Maybe this sounds like a fantasy to you, but these figures are a real case study of an Innovative Marking Systems customer who plucked up their courage and took the plunge. Originally, they had planned on buying two more systems to keep up, instead they’re running so fast that they’ve idled their older equipment and eliminated a problematic 3rd shift while increasing total output, profitability and quality.
It is critical to spend the time to learn the real costs of your current operation and the real long-term bene- fits of automation. Every dollar spent now on speed and efficiency will have a cascading impact on the profitability and viability of your business in the future. The cost of labor in the U.S. will not decrease. Pressure from overseas markets will increase. You must take advantage of the only edge available and embrace products that help you not only survive but also grow a sustainable and profitable business. Plus, don’t forget, going fast is fun…so ACCELERATE!