Do you evaluate machine purchases by calculating the Return On Investment (ROI)? That is what our customer did, and initially the numbers / ROI did not pan out.
Their operation involved an employee placing their product into boxes, sending the boxes through a tape machine, then stacking the boxes onto a pallet. Even though the boxes weighed 25-42 lbs., adding a PALLETPOD palletizer didn’t reduce the required labor. It would mitigate the injury risk, which was part of the ROI calculations. However, mitigating risk wasn’t enough to justify the cost.
To “protect” employees doing this job, the pallet stack was lowered so that most employees would not stack boxes over shoulder height (this didn’t apply to anyone under 5’6” tall), and they added spring loaded pallet positioners with turntables to reduce the bending and reaching associated with the task. They also rotated employees off this job every two hours.
The Aha moment came after reviewing these restrictions. The one most obvious, improving the safety and welfare of employees, didn’t justify the purchase of a PALLEPOD. However, removing stacking height restrictions did! With the PALLETPOD, they now stack 1-3 more layers of product onto each pallet.
Why is this significant? The transport cost didn’t change, they were shipping two fully loaded trucks per day, single stack pallets (the product was heavy and pallets couldn’t be double stacked). Adding an extra layer or two or three of product significantly reduced the per box transport cost. For example: Stacking a layer of 9 boxes / 5 layers high (common for some skews), they could load 1170 boxes into a trailer. (1) Transport cost per box was approx. $0.85. Stacking an extra layer – Transport cost per box dropped to $0.71; two extra layers the transport cost per box drops to $0.61; and for 3 extra layers transport cost per box drops to $0.53.
With these savings, the calculated ROI for purchasing a PALLETPOD was 16 months. Our customer, who is in the food industry, ended up deploying PALLETPODs into 9 of their facilities in the USA.
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(1) These numbers are based on $1000 per load and will vary based on delivery area and distance.
