Operational expenditure (OpEx) is the lifeblood of any food and beverage packaging operation. For plant managers and other operational leaders, mastering OpEx is critical. In this blog post, we will explain what OpEx is in the context of packaging and after-sales support for equipment. We’ll also explore the five essential facets of OpEx that every plant manager should understand. Lastly, we will offer actionable tips that you can implement within your own packaging operation to unlock the potential for greater profitability, cost control, cash flow management, competitive advantage, and business continuity.
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Let's dive into the world of operational excellence in packaging machinery and discover how to maximize your return on OpEx for sustained success.
What is Operational Expenditure (OpEx), and Why Does it Matter?
Operational expenditure (OpEx), in the context of after-sales support for packaging machinery, is the ongoing cost associated with owning and maintaining your packaging equipment. These are the costs that recur throughout the life of your equipment. For plant managers, OpEx has a significant impact on your overall success in maintaining an efficient, predictable packaging operation for your business. By mastering the core concepts of OpEx, you can optimize your aftermarket support plan to generate greater profitability and stability for your business.
5 Core Concepts of OpEx
Before you can optimize your packaging OpEx, there are five key concepts you need to understand. By mastering these five concepts, you can ensure a greater return on investment (ROI) from the aftermarket products and services you purchase.
Effective management of operating expenses directly influences the profitability of your packaging machinery. By controlling costs and minimizing unnecessary expenses related to maintaining your equipment, you can increase your business’ net profit margins. From there, of course, profitability gives you the freedom to reinvest in growth initiatives, pay dividends to shareholders, and generally create a more stable financial situation for your business.
#2 Cost Control
Packaging machinery operations entail various day-to-day costs (rent, utilities, salaries, suppliers), which are driven by things like access to spare parts, the ability to perform maintenance tasks in-house, labor, and energy consumption. Vigilant monitoring and control of these expenses are vital for optimizing resource allocation, waste reduction, and overall equipment effectiveness (OEE).
#3 Cash Flow Management
Packaging machinery OpEx consists of recurring costs that must be carefully managed to maintain a healthy cash-flow. Effective OpEx management ensures that companies can meet financial obligations promptly, such as servicing loans, paying bills, covering payroll, and investing in machinery upgrades. A well-managed cash-flow provides the flexibility needed to seize growth opportunities and respond to market fluctuations.
#4 Competitive Advantage
Efficiently managing operational expenses associated with packaging machinery can create a significant competitive advantage. By controlling costs, companies can offer competitive pricing to customers, allocate resources for technological advancements, enhance product quality, and implement effective marketing strategies. These advantages strengthen the company's position in the market, making it more attractive to potential consumers and enhancing your brand reputation.
#5 Business Continuity
Strategic control of operating expenses is pivotal in ensuring the long-term sustainability and continuity of your packaging machinery business. Maintaining a lean cost structure allows companies to weather economic downturns, navigate industry disruptions, and respond to unexpected events effectively. This adaptability ensures uninterrupted machinery operations even during challenging times, preserving business continuity and customer trust.
By mastering these packaging OpEx concepts, you can make informed decisions, streamline their aftermarket support plans, and drive greater efficiency, profitability, and resilience within their packaging operations.
How to Maximize Your Return on OpEx
When it comes to reducing OpEx for your packaging operations, there are numerous levers you can pull. Here we’ll discuss some of the top OpEx reduction tactics that we have found to be the most impactful for our customers.
Raw Material Optimization
Raw material optimization is one of the foremost tactics we recommend. Often, by making simple improvements to your packaging machinery, you can reduce the packaging material thickness that is required to protect your packaged products, thereby reducing your raw material procurement costs. In addition to these savings, this optimization of raw materials helps you reduce your transportation costs as well as the carbon emissions associated with transporting those materials.
Product and Material Loss Reduction
Another tried and true tactic is reducing your product and material waste by improving your equipment setup. In parallel with defining your raw material, you can work with your OEM to make the necessary machine adjustments to account for the new material’s unique characteristics. Once the machine is adjusted for maximum overall equipment effectiveness (OEE), you should experience fewer crashes and unplanned downtime, once again reducing your operational expenditure.
Service Contracts & Preventative Maintenance Plans
Many OEMs offer custom-tailored service contracts and preventative maintenance plans to ensure optimal OEE. Preventative maintenance plans may include scheduled inspections, routine maintenance tasks, spare parts optimization plans and other proactive actions to help you avoid unplanned disruptions, reduce repair costs, and improve overall productivity.
Synerlink’s Solutions for Optimizing OpEx
When working with customers, Synerlink offers a broad range of after-sales services that can reduce your packaging OpEx. In this section, we will delve into three of Synerlink’s most common OpEx reduction services, which have had a significant impact on our customers’ businesses. Our objective with all after-sales services is to help you create greater profitability and continuity for your business.
Proposals for New Packaging Design
Synerlink offers a broad range of packaging design services with a special focus on aligning your solution with your marketing and other practical objectives. We offer 3D drawings, packaging mock-ups, and prototypes for your packaging container to give you confidence before bringing your newly packaged product to market. Here are a list of packaging design optimizations that we commonly propose to reduce our customers’ OpEx:
Plastic thickness reduction
Label-free cup formats
Reformatting from straight to conical cups
Stiffer cup top loads
Changes in plastic material (PET, PS, PP, etc.)
Whether you’re looking to improve business continuity or enhance your overall equipment effectiveness (OEE), Synerlink offers several machine upgrade options to help your existing equipment re-align with your ever-evolving business objectives. Some of our common upgrades include:
Replacing pneumatic elements with servo motorized elements for greater energy efficiency (and more responsive, configurable and monitorable controls)
For machines with obsolete elements, we can retrofit your equipment with new (commonly available) elements for quicker support and easier sourcing in case of breakdowns.
Special filling technologies that reduce clean-in-place (CIP) times or dripping.
Synerlink’s service contracts are an excellent way to proactively manage your packaging equipment’s OpEx. Not only do they give you access to a single point of contact for your aftersales needs, they also give you a proactive gameplan for your preventative and corrective maintenance actions. Service contracts are custom-tailored to meet the exact requirements of your operations and on-site analyses are always conducted by the same Synerlink expert, ensuring a simple and cohesive maintenance process for our customers.
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