Making the business case for using the right label
‘Compromising on the quality of your labels and tags may appear to save you a few pounds per thousand, but you could be paying a much higher price due to line stoppage and operational downtime.’
That’s the verdict of a recent business case that Piroto undertook for a prospective client.
The results
Whilst the actual cost of wasted tags was relatively small, the associated costs of the tag failing were significant. Over the course of a year, the total cost of wasted tags and time added a staggering 50% to the cost of the original label.
Here’s how the final figures stacked up:
|
Tag Failure Rate |
Tags Wasted |
* Tag Wastage Cost |
** Lost Time |
Cost of Lost Time |
Cost per ‘000 Labels |
|
5% |
10,000 |
£150 |
27 hrs |
£1,350 |
£7.50 |
|
2% |
4,000 |
£60 |
11 hrs |
£550 |
£4.50 |
|
1% |
2,000 |
£30 |
5.5 hrs |
£275 |
£1.50 |
* based on a tag cost of £15 per thousand.
** Based on a 10-second downtime for each reprint.
The prospective client
Our prospective client, an abattoir using an average of 200,000 carcase tags per year, approached Piroto to help complete an analysis of their tag usage.
Their challenge
Their current label provider supplied off-the-shelf carcase tags, many of which were being rejected due to breakage or sub-standard print. While it was obvious that these issues were causing disruption to the line, the slaughterhouse needed to quantify the scale of the problem in order to justify moving to better quality, but slightly higher priced, tag.
The test
Observing the operation over a period of time we found that up to 5% of the carcase tags were being rejected; each tag that needed reprinting took an additional 10 seconds to complete.
Once it became clear that every 1% tag failure had a resultant cost equivalent to £1.50 per thousand on the price of the tag, our client could easily make the case for specifying a superior tag material.
Let us help you make the business case for getting the job done properly.