Reduce case costs and help simplify dairy production

Reduce case costs and help simplify dairy production
White paper
Reduce case costs and help simplify
dairy production processes
On-demand printing can help reduce SKU
complexity and improve operational efficiency
Achieve cost savings while simplifying production
and case SKU management
It is very common for dairy producers to use pre-printed
cases and maintain a variety of cases for different
products and product sizes. This mode of operation
works, but is there a better way?
This white paper explores how you can simplify your
production, lower waste and inventory levels of
pre-printed cases, and achieve operational efficiencies
by moving to an on-demand case printing solution.
Contents
2
Meet packaging demands,
drive efficiency and
reduce costs?
3
Operational challenges and pre-printed cases
4
Hidden costs of pre-printed
packaging
5
Opportunities with
on-demand printing
6
On-demand solutions,
clear and simple
8
Meet packaging demands,
drive efficiency and
reduce costs?
While there is a lot of noise around shelf-ready
packaging, most shipping is done in pre-printed
cases. The challenge for producers is to identify
solutions that can meet daily production needs
while driving operational improvement.
Achieving operational improvement is made even more challenging
as the increase of dairy product variety is driving a proliferation of
new, pre-printed cases with product-specific information and ITF-14
or GS1-128 bar codes.
On-demand case printing technologies can now help to simplify
operations and reduce the expenses associated with designing,
planning, buying, stocking, and using pre-printed cases.
3
Operational challenges
and pre-printed cases
Challenge:
Importance of uptime
Challenge:
Increasing variety of products
Mintel, a global market intelligence company
that analyzes trends and product introductions,
estimates that there were 1,359 new dairy
products launched in the United States in 2011,
up 8% from 2010 (Global Product Database).
Growth in the number of new product launches
will likely continue as more brands enter the
dairy market and as marketers and brand
owners further refine products for specific
consumer tastes and demographics. Globally,
increasing commercialization in emerging
economies is also driving demand for packaged
dairy products and new product introductions.
The increasing variety of retail product options
places pressure on packaging teams to create
more unique Stock Keeping Units (SKUs) with
product-specific printed information. It also
places a higher burden on manufacturing teams
to accurately source, manage, and properly
utilize all of its active packaging SKUs.
4
Due to the perishable nature of dairy products, it
is imperative that the line keeps running. In
addition, finished goods inventory ties up capital
and therefore, it is far better to fill, pack, and ship
product as quickly, accurately, and as efficiently
as possible. Adding packaging complexity does
nothing to simplify or improve this process; in
fact, it makes things more difficult. Also, each
additional SKU likely has an associated product
changeover. With constant pressure on dairy
operating margins, it is imperative to simplify
manufacturing processes and to increase
production uptime.
Challenge:
Lowering shipping case costs
Many manufacturers utilize pre-printed cases
that include a variety of branding and product
information. Using pre-printed cases creates
several financial and operational challenges.
These can be measured to determine the impact
on your bottom-line. These challenges are a
function of the time and effort required to juggle
a variety of case SKUs while also making sure
that the correct cases are on-hand. This cost is
incremental to the cost of pre-printed cases
and when evaluated, could prove to erode
operating margins.
On-demand
case printing
Dairy producers have adopted
on-demand case printing to
overcome the challenges of
SKU proliferation, increased
production demands and the
costs associated with pre-printed
cases. On-demand printing can
achieve comparable print quality
and can be easily integrated into
your production line.
Hidden costs
of pre-printed
packaging
New case SKU costs
Staging of pre-printed inventory
Production error costs
These include time and resource costs
associated with creating a new case SKU
such as design/artwork creation, print sample
production, approval time, as well as the cost to
maintain a new case SKU through its life cycle.
These costs are incurred to ensure adequate
work-in-process inventory levels and include the
moving of inventory back and forth from the
production line to stocking locations.
Costs related to running out of productspecific cases during production – leading to
unscheduled downtime and the cost of rework.
On-demand printing reduces:
• Sampling, approval, and artwork file
management costs in that case samples can
be edited, printed, and approved on your
production line.
On-demand printing reduces: The number of
case SKUs that have to be staged, managed and
transported to and from the production line and
the manpower associated with moving
pre-printed cases in and out of the production
area.
On-demand printing reduces: The need for
product-specific cases, especially if inventory
should run out during production. Each case is
printed directly on the production line, exactly
when needed, by an operator or production
planning system. This helps to improve process
efficiency and avert downtime, rework and scrap.
• Design times with the capability to easily edit
messaging or codes on one of your existing
standard case designs.
• Pre-printed case requirements regardless of
SKU growth. Standardization to fewer,
standard cases means less SKUs to manage
overall.
Maintaining optimal inventory
These include costs associated with purchasing
and maintaining inventory levels, as well as
inventory storage costs.
This chart shows the financial benefit of upgrading to an on-demand printing solution versus
using pre-printed cases. In this scenario, the manufacturer stocks 40 types of pre-printed cases
and two different case sizes. Taken into consideration is the cost of storage space, scrapping of
materials and case changeover.*
Annual cost
(USD)
Cost per
SKU
SKU’s
Total
SKU’s
Total
Space
$ 672
40
$ 26,880
2
$ 1,344
Scrap
$ 225
40
$ 9,000
2
$
450
Change over
$ 125
40
$ 5,000
2
$
250
TOTAL COST
Pre-printed
$ 40,880
On-demand print
$ 2,044
}
On-demand printing reduces: The time
required to manage and optimize purchasing of
pre-printed cases as well as physical inventory
costs. This allows fewer SKUs to be managed in a
just-in-time inventory management process.
The cost savings are clear
SAVINGS $ 38,836
*Assumptions: 1) Each SKU requires 64 ft2 of storage space at a cost of $10.50 per ft2; 2) For each SKU 150 cases
are scrapped each week at a cost of $0.03 per case; 3) For each SKU there is one changeover per week; 4) Each
changeover requires 10 minutes of labor at $15 per hour.
5
Opportunities with
on-demand printing
Simplifying new product launches
Lowering case maintenance costs
New dairy product launches usually require
creating new case packaging designs or
tweaking existing designs. Pre-printed cases take
time to design, prototype, approve, and plan for
production. All of these actions add to product
launch activities and can delay launch if
something goes wrong.
Producers with products sold under different
brands, sizes or flavors face escalating challenges
with the growing amount of pre-printed
information on their cases. Unique information
placed on the case increases the number of
different case SKUs that must be ordered and
stocked in each of their production facilities.
On-demand printing solutions can help speed
your time to market. They simplify new product
launches by reducing the time and effort to
create and approve new case packaging. You
can design the packaging information and print
prototypes directly on your line, and the
approval process can be shortened by having the
right people on the line to review changes as
they are made. By addressing the issue directly
on the line, resolution takes minutes instead of
weeks for new packaging to arrive.
On-demand printing lets you reduce your
number of unique case SKUs because you print
the required information as needed on the line.
Over the long run, this can save your company
money, allowing you to focus inventory
management activities on fewer standard case
SKUs.
On-demand printing can simplify new product
launches by reducing the time and effort to design
and approve new case packaging. Now you can
create customized case information in real-time
and print prototypes directly on your line.
6
With an integrated on-demand printer, the printer can
identify what is being produced and can help ensure
proper packing and printing of both product and case.
Reducing production management costs
Reducing the impact of product shrinkage
Help reduce production errors
Making sure the correct cases are on the line,
and in the right quantities, takes effort and
requires a process to minimize mistakes.
Pre-printed cases require operation resources to
get the right cases on the line when they are
needed, and to make sure the wrong cases have
been removed so that your line employees
cannot make mistakes.
Product shrinkage typically is caused by damage
to the inventory while stored in primary stocking
locations. This can happen if a forklift runs into
or mishandles the items or as a result of water or
environmental damage. Further product
shrinkage can occur as case designs are
obsoleted and the remaining case inventory
cannot be consumed.
On-demand printing alleviates this problem
because the correct information is printed on the
case as it is packed. With an integrated
on-demand printer, the printer can identify what
is being produced and can help ensure proper
packing and printing of both product and case.
This frees up your production staff to focus on
other production functions.
With a print on-demand solution, when cartoned
inventory is damaged and needs to be reworked,
cases can be printed immediately on the line
and product recartoned without concern of
inventory levels of pre-printed cases. And, in the
case of design changes, new artwork can be
downloaded directly to the printer and cut into
production immediately, eliminating the need to
have new cases printed and having to dispose of
obsoleted case inventory. Printing what you
need, exactly when you need it, helps to reduce
the impact of product shrinkage, simplify
operations and reduce associated costs.
Items packed incorrectly in pre-printed cases
complicates product disposition during the
unfortunate event of a recall. Additionally, this
mismatch can create confusion in the supply
chain. This may result in product returns if
automated case bar code scans don’t match
expected delivery information. The ramifications
of making mistakes can ripple throughout your
entire operation and greater supply chain.
Helping to eliminate these types of production
errors, Videojet offers Code Assurance. When
integrated with all of your Videojet printers on
your line, Code Assurance enables you to get the
right code in the right place, on the right
product, time after time. Dairy producers can
also synchronize the printer integration process
with their production planning process to
improve production efficiency.
If integration of a printer into your line cannot
be accomplished, the process can still be
error-proofed by using bar codes and scanners
to select the correct information to print. By
integrating scanners into the printing system,
the operator can scan a work order bar code or
the UPC bar code of the item being packaged to
tell the printer what to print.
7
On-demand solutions,
clear and simple
Producing high quality print with
minimal operator intervention
Printer cleaner on
Printer cleaner off
Print quality when it counts: Videojet has
developed a unique technology for our Large
Character Marking system that purges the
printhead to help ensure superior print quality.
This purging can occur as often as before every
print, without wasting any ink, helping to ensure
the highest quality print with minimal operator
interaction.
Simple printer control: In hectic production
environments, time is money and errors painfully
consume both. Simplification of processes and
interfaces is a great way to improve the daily
activities of your associates. The user interface
is the primary point of interaction with the
printer – both in controlling the printer and in
getting actionable status information back from
the printer. Videojet has developed a
user-friendly interface that presents operational
information in a simple manner that uses a
touch-screen interface to guide operators.
8
Simple printer operation: During the course
of daily operation, printers will run out of
consumables. In some situations, running out
means the printer stops printing, which has a
dramatic impact on production. In other cases,
the print quality begins to decline. A low
consumable warning provides advance notice
of this potential issue, helping to avert the
likelihood of unscheduled downtime.
Adding ink is as simple as installing a can into
the printer. You can reload the ink while still
printing, so there is no need to stop production.
And the can is sealed outside of the printer, so
there is little chance for spilled ink – helping to
ensure a cleaner, safer operating environment.
The Bottom Line:
On-demand case printing can help remove
complexity and cost from your dairy production
With less pre-printed SKUs to design, print, purchase, manage and store,
an on-demand case printing solution offers dairy producers a new level of
simplicity, efficiency and cost savings. Videojet case coding solutions also
provide exceptional print quality, easy integration and minimal required
operator interaction, all helping to improve your operation.
9
Peace of mind comes as standard
Videojet is a world leader in industrial coding and marking solutions,
with more than 325,000 printers installed worldwide. Here’s why…
• We leverage over 40 years of globally gained expertise to
help you specify, install and utilize the most cost-effective
solution; one best suited to your operations.
• We have earned a reputation for both the long-term
reliability of our products and excellent customer service,
so you can choose Videojet and relax.
• We deliver a wide range of products and technologies
that deliver tangible results across an extensive range
of applications.
• Our international network includes more than 3,000 staff
and over 175 distributors and OEMs, in 135 countries.
So wherever and whenever you’re ready to do business,
we’re ready to serve.
• Our solutions are highly innovative. We are committed to
investing in new technologies, research and development
and continuous improvement. We stay at the forefront in
our industry, to help you do the same in yours.
Global Headquarters
Videojet Sales & Service Offices
Manufacturing & Product
Development
Countries with Videojet
Sales & Service
Countries with Videojet
Partner Sales & Service
Call 800-843-3610
Email info@videojet.com
or visit www.videojet.com
Videojet Technologies Inc.
1500 Mittel Blvd. Wood Dale IL 60191 / USA
©2013 Videojet Technologies Inc. — All rights reserved.
Videojet Technologies Inc.’s policy is one of continued product improvement.
We reserve the right to alter design and/or specifications without notice.
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