22 Sep

Leasing or owning a scale – How to decide which option is right for you

A scale can be a significant cost for a company and many times we are asked to “weigh in” on the advantages and disadvantages of leasing versus owning the scale. The decision should be based on several factors, including overall costs, long term use or needs and plans you have for the scale, and the facility in which the scale is located.

Today’s leases are cleaner than in years gone by

Leasing a scale should not be confused with a scale “Rental”.  A Rental program offered by Fairbanks Scales is a short term rental and the scale is returned at the end of the established timeframe. Renting allows the facility operators to keep their facility up and running while significant maintenance or replacement of an old scale is taking place and the customer cannot afford to be without a scale. Typical rental terms average one to three months. Beyond that, costs start to add up.

Leases offer a long term solution at a fixed cost with the same advantages as owning the scale.  Leases are much cleaner than they used to be. With any lease, finance charges are built into the payment. However, many lease programs today are closed end contracts, which allows the customer to know exactly what they are paying and for how long. This type of contract also may offer a dollar buy out at the end of the lease program.

One thing to note is that the customer can often borrow money from their own financial institution at a better rate than if they go through a third party lease company.

Leasing is great for an unexpected scale replacement or short term projects

Obviously purchasing the product up-front is the least expensive overall option, and is still the norm for most users. However, there are situations in which a lease is a good option.

When a scale at an existing facility needs to be replaced unexpectedly, and is not part of the current equipment budget, a lease can be a valid option. A monthly payment may soften the blow of an up-front unbudgeted capital expenditure.

Another area where a lease may make sense is for companies that frequently provide project work or services that are remote, short term, and/or on a contract basis. Again, monthly charges may be easier to build into the price of this type of overall project or contract and can be spread amongst several projects.

Maintenance costs typically do not differ between a lease and owning. The same maintenance requirements and recommendations will apply. In the case of a rental scale from a factory, the maintenance is often built into the rental costs, excluding physical and abusive repairs, which would be additional costs.

Checklist of advantages, disadvantages, and what the user should watch out for

Owning or purchasing up-front will provide the customer more savings and better yield over the life of the scale. Leasing costs less money up-front but will cost more overall. Here’s a list summarizing advantages and disadvantages.

Leasing advantages

  • No high upfront costs compared to purchase
  • Fixed monthly payment for operating costs versus a capital budget
  • Often can build in additional peripheral devises often overlooked due to cost

Leasing disadvantages

  • Overall higher costs
  • Third party lease company

What to look out for

  • Make sure to use a reputable lease company with a “closed end” lease agreement
  • Be thorough in equipment selection and not just equipment that is striped in order to keep the monthly payment down.

Owning advantages

  • Customer controls all aspects of the scale
  • Far lower overall costs
  • Customer owns the asset of equipment and has the capital advantage for tax purposes

Owing disadvantages

  • Up-front costs if not in a budget or emergency funds not available.
  • Capital expenditure

 

What to look out for?

  • Do not settle for a product that does not offer modern technology.
  • Base decision on a price comparison of product technology, history and application capabilities to ensure the most long term option on the investment.

Your needs or circumstances can and do change, but due to the type of product and other factors that often goes along with a scale purchase, including foundations and utilities, the decision to buy or lease the scale must be made first, before placing an order for a scale.

To decide which option is best, your best bet is to sit down with an Area Sales Manager from Fairbanks to discuss all your short and long term needs and specific facility issues. In many cases, Fairbanks can provide estimates of both solutions for customer review and comparison.

11 Sep

Tips for developing a basic food industry data collection program

A good data collection program is absolutely critical in the food industry. Consumers want to be assured that the food they consume is of the highest quality and that it is safe. Government regulations work towards consumers demands by monitoring the food chain. Think of the common news instances in which a plant has to be closed, all product destroyed and products on the market recalled – all because inspectors could not determine if materials used during an identified period might have found their way into subsequent production days.

It is important to develop a program that protects your company from this situation. Be sure to evaluate your business objectives thoroughly, take an inventory of your current processes, and know what data you need to collect. Then, develop the program in incremental steps to minimize change-affects, maintain manageability, and meet your project goals.

The first steps

So you’ve taken on the task of developing a data collection program. Where do you begin? Start by evaluating your current system. Ask all (and I do mean all) stakeholders what they like and dislike about how information is currently captured. The person closest to the job knows the “ins-and-outs” of the process that may not be documented on paper.

Keep an eye out for ways to uncover all process steps and improve each one. If information on a process is currently being captured on paper, examine each line and ask; “How is this data used? Do we need more information than what we are capturing?  Is this ‘nice-to-have’ information, or is it critical?”

Once the complete process is documented, evaluate where you can get the best return on investment. Focus on business-related goals that can be quantified by measurable results.

Here are a few examples:

  • Satisfy a customer’s requirement to secure continued business.
  • Improve recipe control by tracing ingredient usage.
  • Reduce packaging costs by closely monitoring process waste.
  • Improve scheduling, leading to a reduction of delays and improved efficiencies.
  • Minimize inventories and improve allocations thereby reducing carrying costs.

A few others to consider include:

  • Establish operation information, for example, yields or productivity.
  • Get quick information access for improved decision making.
  • Reduce paperwork in a manual process.
  • Collect data for product traceability and recall.
  • Meet government or customer requirements.

What information do you collect?

After developing a charter for addressing a specific issue or issues, identify where and how to collect the data.  Poorly developed programs tend to collect copious amounts of data, but use only a fraction of it. This can add to costs. Ask yourself: “Is this data needed?”

Click here for a table of commonly gathered data points a food manufacturing process may need to collect. [Link to table]

The more information gathered, the more complex sharing becomes. Keep in mind that collecting common data points once, and sharing with other steps in the process, will reduce errors and costs.

Make an impact

Determine where you can make the biggest impact. You should be looking to fulfill multiple requirements while minimizing investment and providing the foundation for a data collection program that can grow as your business grows.

Consider starting by organizing your data collection to comply with FDA Bioterrorism Act traceability mandates, Country-of-Origin-Labeling (COOL), or the Produce-Traceability-Initiative (PTI).

Then identify the organized data, or report layout, you would like to have and build a “road-map” of data points you must capture to get there.

Can I use existing equipment?

Using legacy equipment will help keep costs down. New systems must be able to communicate with older devices while providing a foundation for future technology. Try to limit devices that require use of proprietary methods.

Be sure to look at your technical partners to ensure suppliers use proven vendors to augment their offerings. Also, make sure they possess a working knowledge of past, present, and future technologies that will allow you to leverage existing equipment.

Seek out vendors and organizations that can support equipment, new and old, and have multiple layers of support and service. This ensures continuity for your data collection project.

Break your implementation into small steps

A larger project should be broken into smaller, measurable and manageable steps or phases. This ensures that any process deviations not uncovered in the initial investigation can be addressed with minimal cost and disruption to the project schedule.

Also, be sure to look for qualified assistance. Seek out companies that can manage the project, provide technical equipment or assistance, and provide valuable resources and insight towards the project, allowing your company to stay focused on the core business.

Perhaps most importantly, communicate all facets of the project to all parties involved, all the time, and often. Good communication can keep distractions from having a negative influence on your schedule and keep everyone focused on task.

How much will it cost?

Costs can range widely, depending on the scope of the project, but can be controlled by implementing the project in steps or phases. Prove-out each phase of the project before proceeding to the next.

Look for systems that use solid, proven technologies while avoiding the cost of user licenses and proprietary software or hardware. Remember – the cost is based on the results of the evaluation during the investigation stage. A solid investigation at the beginning of the project will prevent any unexpected costs at the end.

Data Collection Table

Source information

Origination
Time/date information Origination (farm) code
Species Lot identification
Primal Weight
Grade Field

Recipe validation, batching, and blending processes

Identifying ingredients
Time/date information Lot identification
Item numbers Weight
Code dates Equipment (line ID, tank ID)
Costing  
Verifying recipe integrity
Time/date information Weight
Code dates Lot identification
Track controlled ingredients Costing
Time/date information Weight
Monitoring batch cycles
Time/date information Lot identification
Code dates Weight
Container id Costing
Equipment (line IDs, tank ID)  

Cooking, smoking and drying cycles

Process deviation Authorizations
Time/date Environmental (temp, pH,)
Additives Equipment (cycle times, pressures)
Operator Equipment (oven ID, tank ID)
Corrective action Disposition

Packaging process

Time/date information Equipment (line ID, tank ID)
Pallet information Package information
Operator Yield information
Lot /vat/unit Barcode type
Safe food handling Establishment information

Inventory control

Container ID Costing
Time/date information Location (room, rack, level)
Pallet information Temperature
Operator Allocation status
Package information Boxing information
Corrective action

Shipping & Receiving

Customer ID Bill of lading (BOL)
Route number Truck number
Country of origin Carrier
Pre-shipment review Temperature
Time/date information Status