Seconds Matter: What is the ROI of an Additional 400 Parts Per Hour?
We have written in the past about the importance of finding the bottleneck and how seconds matter in any production process. Time truly is money, and today we would like to walk through a sample ROI calculation one typically encounters when considering moving from an analog method of product-decoration such as pad printing, silk-screening, or in-mold labelling to digital inkjet product-decoration.
The numbers we will use are merely illustrative. Thankfully, the price of the part to be decorated is irrelevant. All that matters is the opportunity cost—the cost of the next-best alternative, which can be assumed to be the current method of product decoration. Since we also build pad print machines, we will examine this alternative method of product decoration most closely, but screen-printing costs will also be considered.
Let’s start with a few assumptions. Assume that the profit from each unit using your current method of product-marking is $1. Assume further that your unit profit using a high-speed single pass inkjet printer is three dollars.
These are reasonable assumptions for several reasons. First of all, there is little to no ink waste in industrial inkjet printing, as the ink system recirculates ink that is not used, and there is no waste from leftover ink in ink cups as there is with pad printing. There are also no clichés to purchase or make and store.
So unit costs can be lower. But what about the revenue side? The second reason why it is reasonable to assume higher unit profit is that industrial inkjet printers can produce premium effects, whether through greyscale printing to produce subtle gradients, or using High Laydown Technology to produce a pleasing tactile finish. Industrial inkjet printers are also capable of variable data printing, enabling individual customization at a mass scale and justifying a premium price. Finally, industrial inkjet printers can use variable data printing capabilities to ensure the authenticity and purity of products through batch-coding and other anti-counterfeiting methods. This can not only cut down on costs from product-diversion and lost sales, but guarantees of authenticity further justify a price premium.
Now imagine being able to do all that, but faster. Assume that using current methods, a facility is able to produce 800 units per hour. This facility is considering investing in a single pass inkjet printer, which will be capable of decorating 1200 parts per hour. What would be the return on investment?
Using current machinery, the company is generating $800 in profit per hour. With a throughput of roughly 18 inches per second, our XD70 single pass inkjet printer is capable of generating $3600 in profit per hour in this scenario. In a forty-hour work week, the single pass machine would generate $112,000 in additional profit every week, or $5.6 million annually.
There are other sources of positive return as well. As mentioned, there are no clichés, pads, or ink cups to store, so less warehouse space is necessary. There may be some salvage value in existing machinery. Labor costs associated with making clichés (or buying them) are also foregone. Finally, with minimal automation such as part load/unload, a single operator could operate more than one machine, something that is harder to do with multiple pad print or screen print machines.
There are of course many other challenges to industrial inkjet product decoration, with part topology and substrate composition being the chief ones. With new polymers being invented each day, getting ink to stick to parts—and stick where you want it—while they move quickly past a print array remains a technical challenge, as variable drop sizes have different trajectories, some parts have nooks and crannies that are hard to hit with ink, and even the movement of the part can create wind turbulence that affects droplet trajectory.
That is why it always pays to partner with a company with a proven track record of building product-marking machines, a company that knows inks, substrates, and innovative part-handling solutions. (You can read more about choosing the right industrial inkjet printer here.) But many customers are surprised at how quickly even complex high-speed single pass printers can pay for themselves.