Here’s the situation: Your newest product has become an apparent winner. Initial orders will require production of 200 cases a day and your marketing team is projecting this will increase to 500 cases, and possibly 1,000 cases, within the next six months.
Explore this issueAugust/September 2005
This development is coming at a tough time, however, as seasonal orders for two existing product lines are also spiking. Moreover, an advertising campaign has rejuvenated yet another mature product line and it too is realizing a sizable increase in demand.
Production and packaging capacity has suddenly become an issue of paramount concern. Both of your 10-hour shifts have been loaded for weeks and simply cannot produce more without sacrificing quality. There is space to add additional machinery, but the company’s quest for cost reduction has put a cap on your capital budget so adding new equipment is not an immediate option. Outsourcing is another consideration you quickly dismiss because outside partners have not been able to meet quality standards in the past.
If this sounds familiar, upgrading your line with pre-owned equipment is an option you may want to consider. Top-of-the-line equipment that has often been used for less than a year is typically priced at 50 percent of the cost of new processing and packaging machines. Renting provides an even more economical option over the short term. In either case, you know that the machines you need can be installed and operated quickly.
This approach will address the timeline and financial aspects of your capacity challenges, but how can you be sure these machines will work or that throughput will be significantly increased without compromising quality?
Overcoming the Unreliable Myth
Many food companies have large processing and packaging machinery inventories that are not being used, while some smaller organizations have just one or two pieces of idle equipment. A lot of this equipment has either been in operation for a minimal amount of time or is an older machine that has been well-maintained.
In either case, these types of machines can still provide exceptional value to a processing or packaging operation by performing at optimal levels of service, particularly because they can be acquired for a fraction of the cost of new machines. For example, a top-of-the-line, pre-owned machine that has been in use for less than a year can be purchased for less than half of a comparable new machine and rented for even less.
So why is it that some plant managers are leery of acquiring pre-owned equipment? The biggest reason stems from a perceived lack of reliability. To be sure, no machine, new or pre-owned, will provide value if it does not function properly. However, high quality pre-owned processing and packaging machines from reputable manufacturers do offer years of dependable service to their eventual end users. The trick to mitigating risk in acquiring pre-owned equipment is to establish a set of performance standards that validate the level of a machine’s quality.
Plant managers should take into account several criteria when assessing the reliability of pre-owned food processing or packaging equipment. Some of these include:
- What type of documentation exists to explain a machine’s full capabilities;
- How well the machine was maintained while it was in use;
- How long the machine was used and for what purposes;
- Where the machine was stored when not in use;
- How the machine was transported from one location to the next; and
- What is the brand of equipment.
Documentation of a machine’s comprehensive performance capabilities is one of the most important things needed to ensure optimal pre-owned equipment usage. Operators often times unnecessarily use pre-owned machines inappropriately because they do not know how to make adjustments that address a variety of applications, such as varying production speed and packaging sizes. A copy of the original operation manual should be supplied with each machine, and the equipment’s provider should also be able to offer counsel and training, if needed, on how to use it.