Introduction
At a Glance
If changeover is just a vague goal you’re chasing, you need to understand changeover cost. It’s the specific monetary value tied to your changeover productivity. And it’s probably costing you more than you think. Know your cost-per-minute, count startup as part of changeover, and ask vendors the questions that highlight long-term cost.
- Cost-per-minute – anytime the line isn’t running, it’s costing you money. Once you calculate this, multiply by your weekly changeover minutes.
- Include startup – startup should be included in changeover cost. It’s the time when the machine has been reconfigured but is not yet running clean. Time and damage concentrate here.
- Machine and process – the machine is only part of the changeover problem. Disorganization, missing procedures, and inconsistent scheduling also drive changeover time.
- Vendor questions – ask questions that get to the heart of where changeover parts live, how much operator skill is required, and how often innovations occur.
Because you’ve found our article, it’s clear you’ve wondered: “What does changeover actually cost me?” This is a good question. Changeover tracking doesn’t make sense without ways to measure its impact. That’s where changeover cost comes in.
The purpose of this article is to help you understand changeover cost as a measurable line-item. This means giving changeover a value, goal, meaning, and means for improvement.
In this article, we’ll cover:
- What is affected by changeover
- How to calculate changeover cost
- Whether it’s valuable to focus on changeover improvements
- How to target where changeover problems come from
- What to ask an OEM during the buying process
What Makes Up Changeover Cost?
Buyers often account for changeover’s adjustment period. What they typically don’t account for is the full scope of changeover time. And therefore, changeover cost. Here is changeover time’s actual definition:
Changeover time is the total elapsed time from the moment you stop running one product until the line is producing good product again, at full rate.
This means that changeover accounts for shutdown, cleanout, adjustments, material loading, testing, and anything else that inhibits your machine from running full production again. This timeline spans a lot more than most buyers think.
Pro Tip
The most important question to ask a supplier about changeover speed is whether their quoted time includes the time to first good product. We’ll address other important supplier questions later in this article.
Startup Waste
Since changeover isn’t officially finished until your machine is at full rate production, changeover includes startup – and all the issues that can arise (e.g. misfeeds, jams, damaged corrugate, etc.). We’ll think of this as “startup waste,” and it’s where the bulk of your real time and damage occur.
We’ve seen an operation whose old case erectors took a full day to change over. Most of that time was spent in startup, not adjustment. The truth is that a machine that takes 20 minutes to adjust and hours to startup, is far more costly than the spec sheet suggests.
What Am I Losing in Changeover?
Before we address the math behind changeover cost, it’s important to understand how changeover impacts production. That’s the purpose of this next section – it sets up the “Why.”
If you’re like most of our customers, you’re worried about how costly your changeover is. So, here are 4 areas that are impacted by time spent in changeover:
- Productivity Uptime
- Startup Cases
- Machine Integrity
- Labor Simplicity
Changeover takes time. Not only does it take away from machine uptime, but it’s time where your operator is adjusting and your production team is waiting. The longer changeover stretches, the more productivity is lost.
Cases that are rushed off an unsettled line will be rejected or will need to be reworked. They just won’t come out meeting your quality standards. This means there’s work you’ll have to re-do, which only doubles the costliness.
A leading cause of machine jams and damage are missing or incorrectly set adjustments. Machine integrity is compromised, and more time and money will go to maintenance and machine repair.
Complex or lengthy changeovers demand more workers, specifically more skilled workers. This means more time you spend on hiring and more money you designate to training.
These factors are not only casualties of changeover, but drivers of its costliness. And they’re only the beginning because they each have cost-repercussions to follow.
How Do I Calculate Changeover Cost?
Now that we’ve covered what impacts and makes up changeover, we’re ready to calculate changeover cost.
Before you evaluate a single machine, work out one figure: what it costs to run your packaging line for one minute. Fold in labor, overhead, equipment depreciation, and the opportunity cost of the product you’re not shipping. Then multiply by the minutes per week you spend in changeover. This is the basis of your calculations.
Now that we have the basis covered, let’s look at the Changeover Cost Equation:
Total Changeover Cost = Cost per minute x Time spent changing over (minutes)
Where:
Cost per minute = Labor + Overhead + Equipment Depreciation + Opportunity Cost
What Should My Changeover Goal Be?
Was your changeover cost greater than you thought it would be? You’re not alone. Most operations find their result is greater than expected. But then comes the next question: “What should my changeover time be?”
There’s no published industry standard for changeover time. It’s a buyer demand and an original equipment manufacturer (OEM) design goal.
With the right equipment, a full changeover can be completed in five minutes or less. A well-trained operator can do it in three. And that’s including startup. That’s an impressive number, but not every operation needs to achieve it. Which comes to the second part of our article…
Should I Focus on Improving My Changeover Cost?
If you’re interested in understanding your changeover cost, it’s likely because you’re worried it needs improvement (and maybe especially after reading the time figures above). While it is important to keep track of your changeover cost, it’s not necessarily the pain point in every production line.
Let’s evaluate whether changeover is your pain point:
Will Improving Changeover Be Valuable for Me?
Chasing a faster changeover is a valuable focus when it’s genuinely eating your throughput. But this isn’t always the case.
If you rarely change over, the minutes you’d save through changeover efficiency are small and high in price. If your line runs one product or a handful of stable products for long periods, improving changeover may not be valuable for your operation.
Try running the cost-per-minute math with your actual changeover frequency. If your changeover frequency is low, the math may reveal that your efficiency problems are occurring somewhere else in production entirely. If that’s the case, there would be little benefit in focusing time and energy on changeover improvements.
What’s Causing My Changeover Problems?
It’s easy to assume that the equipment is the problem in the equation, but it’s not the only factor at play. Changeovers can be greatly impacted by process problems and people failures. Here are some common process culprits with tips for improvement:
- Disorganized Parts
- Tip: Try keeping change parts on a shadow board or dedicated cart.
- Missing Procedures
- Tip: Consider laminated step-by-step procedures at the machine.
- Inconsistent Scheduling
- Tip: Having normalized windows (for example, “We changeover on Tuesdays and Thursdays”) allows operators to build competency and muscle memory.
- Skipped Steps
- Tip: This error could be helped through posted procedures; also consider having a verification step as part of your changeover process.
Parts stored under the machine, in unlabeled bins, or scattered across the facility add time and invite errors.
This could be a complete lack of procedures, or this could be procedures that aren’t posted on the machine. Operators should not be running solely on memory and habit.
When changeovers occur unpredictably, operators struggle with building competency.
One of the most expensive mistakes in packaging is a missed adjustment point that is only revealed after startup. This is partly because it surfaces so late.
None of these fixes require new capital. They just take intentional effort. Care for changeovers as good homeowners care for their homes: spend time on upkeep to save yourself from problems down the line.
Pro Tip
Are you unsure what’s driving your changeover cost? Diagnose your pain point the same way we would diagnose it with you on a call. Ask yourself one question:
Is your time primarily spent on adjustment or on startup that won’t settle?
The Machine Is the Problem: What Should I Ask My OEM?
You’ve checked if process improvements could solve your problem, and you’ve decided the problem really does lie in your machine. Perhaps that means it’s time for a new machine. And with a pinpointed focus, you’ll want to ask your OEM about changeover cost.
As OEM’s ourselves, we’ve compiled these questions for you to understand your OEM’s long-term changeover value:
- How many components have to be adjusted during changeover?
- Is the changeover actually ‘tool-less’?
- Are change parts required? If so, do they live on the machine?
- What does your changeover time quote include?
- What happens when an operator makes a mistake during changeover?
- How has your changeover process changed over the last 15-20 years?
- How does changeover complexity change with the addition of new products?
Fewer adjustments mean faster changeovers, with less room for human error. This is the single most predictive measure of complexity (for more on this subject, look at our article, “The Hidden Cost of Complexity: Why Part Count Matters in a Case Erector”).
The term, “quick changeover” is a marketing term. Asking if a machine is ‘tool-less’ will highlight whether all the necessary tools are on or a part of the actual machine. So that the only tools needed are the operator’s hands.
Some machines need physical part swaps. If your machine does, built-in storage will reduce the complication of part storage altogether.
Adjustment only, or adjustment plus startup and time to first good product – these are very different numbers. Make sure you get your OEM’s full picture.
Have your OEM walk you through failure mode. Do errors cause jams or damage? How long will it take to correct a missed adjustment? A machine that is forgiving of human error will cost less to run.
This question will reveal whether your OEM has actually invested in research and development, or if they’re selling decades-old design.
Changeover complexity will scale based on the number of products you run, and how greatly they vary. First, evaluate how varied your current line-up is and whether there are plans for expansion in the future. Then see how your OEM’s machine scales.
Have the “What If” Mentality
One of the most common things we hear from operations looking at new equipment is “it takes us a while to change over, but that’s just how it is.” Stagnation happens when your mentality is “that’s just how it is.”
Buyers who get the most out of their packaging equipment are the ones who do the “what if” math. And do it right. Before you buy, count the adjustments, count the startup, and ask the question, “What happens if my changeover improves?”
How Does INSITE Reduce Changeover Costs?
Give us a call and learn how INSITE equipment can improve your bottom line.
