Downward pressure on costs is a fact of life in every company, not least in recent years as the recession, and now the double dip, has been the backdrop to every area of business. Labelling has been no exception and fierce competition in the label applicator sector has forced some players out of the market, and prompted a change of strategy from others.
One of those to rethink its approach has been Partners in Packaging. Director Duncan Macintyre says: “Unfortunately, we have recently backed out of the labelling machine market as far as supplying labelling heads, on the basis that there is so much competition these days, much of it very inexpensive.”
However, Partners in Packaging does still integrate OEM (original equipment manufacturer) labellers from Herma and Etipack into sleeving and cartoning lines – a more specialist application. The last big system Partners in Packaging supplied was to food manufacturer Cavaghan and Grey in Carlisle for the feeding and labelling of sleeves and cartons at high speed.
“The reason I think we got this order was that it required many of the skills we are good at, namely feeding a variety of products using a very simple and easy-to-adjust Streamfeeder Universal Friction Feeder onto a custom designed stainless steel vacuum belt, and integrating labellers into an overall very flexible system,” says Macintyre.
Bradford-based Advanced Dynamics is also focusing on more complex projects, as the company’s managing director, Malcolm Little, explains: “People are prepared to pay more for a bespoke or unique system than a bog-standard labeller.” Earlier in the summer, for example, the company won a contract to supply and integrate a labeller into a flow wrapping machine. “This type of system will sell for twice the price of a standard wraparound labeller,” says Little.
In addition, to enable it to compete with suppliers of inexpensive machines on more standard installations, Advanced Dynamics has adopted an ‘if you can’t beat ’em, join ’em’ strategy, joining forces with a Taiwanese label applicator manufacturer.
“Historically, I’ve always been quite a machine snob until last Interpack, I walked past a stand and had to go back for another look – I’d never seen such a compact looking system,” says Little. The stand was that of Pack Leader, and 18 months ago, Advanced Dynamics struck a deal to sell the company’s machines into the UK.
“They are selling the machines to me and shipping them over for less than I can buy a labelling head for,” says Little. While they won’t be everyone’s cup of tea, for companies who can’t afford an automatic wraparound labeller and don’t mind slightly slower speeds, at around £6,000, they are half the price of a new machine from a better-known brand. For Advanced Dynamics, swallowing its pride and entering this area of the market has proved a lucrative move.
“The marketplace has been difficult over the last few years and opening up this other market has helped us tremendously,” says Little.
However, not all stories of cheap label applicator purchases have happy endings. Simon Goff of Harwich-based Premier Labellers warns that what buyers save on purchase price, they risk pay more for in downtime and inefficiency in the long run. He says there are a number of warning signs that buyers should look out for that could indicate low quality. These include the use of cheap components such as stepper or servo motors, inverters, inverter drives, conveyor motors and gearboxes, all of which, Goff argues, are costly to replace if they fail.
In addition, he says that the general quality of engineering, stainless steel material quality, build quality and accuracy and repeatability on the application of the label to the container are all factors buyers should consider. “A lot of companies have value-engineered their systems to reduce costs but in doing so have reduced reliability, stability and accuracy,” he claims.
Tom Bunce, director of Wrexham based Etiquette Labelling, adds that at the lower end of the market machines can be assembled from inferior quality components and on a less robust chassis. “Also, you can expect to see fewer web path rollers, and a less sophisticated method of application and waste rewind, plus outdated technology such as DC motors and clutch/brake assemblies are sometimes used in an attempt to reduce cost,” he says. While acknowledging that there has been an influx of low cost machines, principally from Asia, into the UK market, Bunce says Etiquette never seems to come across them as direct competitors.
“Our competition tends mainly to be from well known ‘quality’ manufacturers,” he says. “I guess, in general, our customers are not focused on cheap and cheerful solutions but are looking for the long term benefits from dealing with established UK companies promoting good quality, reliable products, and providing professional after-sales support.”
Print and apply systems are inherently more complex, which probably explains why Etiquette and others in the industry haven’t seen the same proliferation of inexpensive machines. “We’re still competing against the same people we’ve always come up against,” says Luigi Pistilli, business development manager, print and apply labelling, at Domino UK.
He says there are some ‘cheap and cheerful’ print and apply systems, which tend to be more limited on specialist options. As an example, while Domino manufactures both left and right handed printers to enable the operator to access the ribbon and change the media, on more basic machines there is no left or right handed option. “This makes installation more difficult and means the operator might have to climb across the production line to change the media,” explains Pistilli.
Print and apply specialist Logopak reports that much of its business today comes from replacing lower cost machines. “People have had their fingers burned and learned their lesson,” says Steve Hancock, UK sales manager with Logopak. He says some of the machines Logopak has replaced have incorporated plastic enclosures rather than stainless steel ones. “Plastic ones aren’t robust enough – you still get dust ingress from the floor, and in an encounter with a forklift truck, a plastic enclosure would definitely come off worst,” he says.
Logopak’s print and apply labellers all come with a steel enclosure to protect the equipment against dust, dirt, extreme temperature variations and fork lift truck manoeuvres. They incorporate climate control and a trap door, which opens to allow a telescopic arm to apply the label. Users of print and apply equipment may not be willing to take a chance on cheaper machines from lesser known players, but they still want greater economy from their equipment, according to Janet Thorpe, director of Cobalt Systems in Cheshire.
“There is definitely a demand for better economy, as capital budgets have been squeezed,” she says. “However, there is some evidence that saving on the initial capital investment leads to higher cost of ownership, due to earlier failure of printheads and poor quality print, leading to risk of product failure in the supply chain, increased maintenance and downtime.” Cobalt is hoping that its new Spirit machine will respond to the requirement for lower capital outlay while allaying fears about the higher lifetime costs of cheaper machines.
“Cobalt Spirit has the same build quality and components as our Nexus performance model, it just has a more limited scope in terms of functions and adjustments, so for less challenging and variable applications, it is more suitable,” explains Thorpe.
Labelling equipment manufacturers have responded to the pressures of a more competitive and cost-conscious market in different ways; what they all have in common is a customer who is more discerning and concerned with value for money than ever before.