3 Cost Reduction Strategies for Security Bag Manufacturers

Posted on January 17th, 2021 / Jesse Drori / , , / Security Bag Tapes
  1. Option 1 – Source cheaper materials
  2. Option 2 – Invest in more modern equipment
  3. Option 3 – Improve operational efficiency
  4. Change is good

Cost reduction is always good for the bottom line. But it can also get trickyIn this article, we invite you to consider three cost reduction strategies for security bag manufacturers: 

  • Sourcing cheaper materials 
  • Investing in more modern equipment 
  • Improving operational efficiency 

You’ll see that in order to make the right decision, you need to look at the potential cost savings of each choice, but also the potential risk of unintended consequences.  

Option 1 – Source cheaper materials

As tempting as it is to select the supplier with the lowest cost per unit, things are rarely that simple. 

You could end up using subpar materials, which can lead to product defects. You may realize that this new supplier is not reliableYour materials may be held at customsYou may even have to pay additional transportation or storage fees.  

While it is not impossible to find good materials at a competitive price, remember that bad sourcing decisions can cost you more than you initially thought you’d save. 

Make sure you’re comparing apples to apples in terms of product quality, but also production lead times and transportation costs. 

Option 2 – Invest in more modern equipment

Bag converting machines nowadays are incredibly sophisticated. If you produce in large volumes, the investment could definitely pay for itself over a certain period of time. 

But, in these uncertain times, demand variability has made it difficult to evaluate how long it will take before you recoup your investment. Are we talking monthsYears? 

Besides, the new equipment often represents a significant investmentSo, there is always the opportunity cost of not investing the same amount in an area that could deliver a better return. 

Option 3 – Improve operational efficiency

The ultimate goal of improving operational efficiency is to deliver goods to customers in the most cost-effective and timely manner, without sacrificing quality in any way.   

A variety of strategies and techniques can be used to achieve this, but fundamentally, they’re all about identifying and eliminating waste in the form of time, material or labour.

At Tamperguard, we believe we’ve found a way to instantly improve your operational efficiency.  

The core principle is surprisingly simple: Have you ever thought of using longer rolls of security tape to improve your machine uptime? 

Let’s walk through a hypothetical scenario:  

  1. Your security tape comes in 1,000 meter flat rolls. 
  1. It takes 15 minutes to change each finished roll on your converting machine. 
  1. You change rolls 10 times per shift. 
  1. You run two shifts per day.  
  1. You produce 5 days per week. 

Your estimated production downtime would be: 

10 shifts/week x 10 changes/shift x 15 min/change = 25 hours/week 

Now, imagine if you were to use a 2,000 meter roll instead of a 1,000 meter roll. You would produce twice as many security bags before changing a roll, meaning you would essentially save 12.5 hours of production downtime per week. 

This is just one cost reduction strategy to help boost your operational efficiency, but notice that this solution doesn’t require a massive investment in new machinery. It also provides an immediate R.O.I. 

Every company is different. Feel free to contact us to help you run your own production scenarios. 

Change is good

The outbreak of COVID-19 has caused consumer behaviour to change nearly overnight. Adaptation is not always easy, but it has forced many of us to come up with creative solutions.  

Necessity is the mother of invention, as they say. The good news is that as we all search for a way to respond to a changing environment, we may find solutions that can improve our competitive advantage in the long term.  

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