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Are tailor-made machines really more expensive than standard machines?

01-11-2016 by Peter Geurts.

At first glance, a standard machine might seem cheaper than a machine designed and built to fit your production processes perfectly. When you compare only purchasing prices of both machines, that might be the case. But in order to make a valid comparison, you should also take into consideration the savings in handling, reduced costs of resetting machines, fewer recalls and many other benefits of a tailor-made machine.

The financial aspect is an important factor in choosing a machine. One might fear that machine designers do not use proven technology to create a tailor-made machine, leading to excessive costs. But at GTE engineering we use various standard parts for our custom made machines and our experienced developers build CTO (Configure To Order), using existing and proven technology to do so. By applying existing technology and parts, development costs are limited.

Trend: From large to smaller quantities

We see a shift from large production volumes to smaller batches with more diverse products –also called ‘high mix, low volume’. This often results in much downtime for machinery, while machines have to be converted to fit the next product. These companies especially could benefit from copying the process of existing machinery into new and smaller machines, that require no or limited conversions, thus limiting the time consuming process of validation.

The big picture

To take all costs into consideration, you should weigh the benefits of the custom made machine compared to standard machine in required manpower, quality of the products, the number of recalls, the production volume, the production time and the downtime. The big picture will show which option is most beneficial to your production line.

Calculation example 1

A standard machine for the assembly of syringes is used for three types of syringes. Between the production of each type, the machine must be reset. These syringes average at €20 a piece, including contents. The machine can produce 500 syringes per hour and runs for eight hours a day. Adjusting the machine takes about four hours. The machinery must be converted twelve times a year. The downtime of twelve times four hours, results in a total loss in turnover of €480,000 a year. With custom made machines that allow for swift changes between various types of syringes, this downtime is eliminated.

Calculation Example 2

When operating a standard machine, two employees are needed to fill trays. The products are then put into boxes and brought to a rotation sealer by another operator. The next operator  puts Tyvek sheets on the tray, and after sealing a fifth operator ensure that the trays are removed and placed in a box. This machine thus requires five operators to function. A custom made machine works in a similar fashion, but requires only one operator for handling and packaging. Basing this calculation on a yearly salary for operators of €40.000 per year, four operators less on a machine saves your company € 160.000 per year in labor costs.

By simply calculating the effect of a tailor-made machine, you can quickly see whether a custom made machine can benefit your company. In the cases presented here, the manufacturer would have earned back the tailor-made machine within a year.

We would gladly calculate and research whether the construction of a tailor-made machine is advantageous for your business. Would you like to receive a free calculation? Or do you have questions about this article? Please contact us via info@gte-engineering.nl or call +31 (0)77 397 13 05.

Peter Geurts

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