Is a Machine Just Steel & Sensors or a Reflection of Business Strategy

Emily Brogan
Wed, Mar 24, 2021


20.03.18_Rovema_LinkedId-Think-longevity2Grandiose Justifications and Over-the-top Language

It's common in the capital equipment space to hear outlandish claims by sales reps and marketing departments. Simplistic financial justifications buried in mind numbing presentation decks are one example. Silly claims that adding or replacing a $500,000 machine in a 200,000 ft2 facility with millions of dollars of plant infrastructure will suddenly "change the industry" are not uncommon.

Talk to enough vendors and it's kind of amusing in aggregate. However, there are two resulting risks to manufacturers.

First, they grow so inured to marketing hyperbole that they simply discount even legitimate claims.

Second, they find so little substance in many sales discussions that they don't consider what may be legitimately strategic considerations.

Let's look at a couple examples.

Harmonization, Resilience and Flexibility

COVID-19 has provided many companies invaluable lessons which will improve business performance going forward. One lesson which many companies have learned is the importance of retaining some flexibility and resilience in their operation (supply chain, manufacturing, logistics) vs. wringing out every bit of efficiency.

As many companies quickly consolidated SKUs, reduced food service and increased retail grocery production, and juggled operations vs. employee health and absence, they encountered challenges associated with limited equipment flexibility and lack of cross training. This meant they couldn't necessarily boost production where and when they needed, and they couldn't easily shift workers to other facilities.

While there's value in specialization, and many companies provide latitude for local management to make choices based on local conditions, it became clear that flexibility was key, as was harmonization which would allow staff and facilities to meet fluctuating needs.

In the vertical form/fill/seal space we see this reflected frequently in the bag style "trade-off" for speed that companies often make. We believe that's short sighted. There's no reason that a machine can't manage a wide variety of bag styles and still run efficiently.

Want to learn more? Check out our free downloadable guide to the full range - including pros and cons - of VFFS bag styles.

This is a great example of an area where engineering might be so weary of empty claims that they don't even engage marketing to explore potential future requirements - and assume vendors simply can't deliver. (Rovema's Flex Machine does exactly that - without empty promises!) 

Strategic Initiatives and Drivers - Sustainability, Retailers and Consumers

Another example is often found in areas of product market fit, consumer expectations and retailer requirements.

Brand managers often feel constrained by the capabilities that engineering and operations offer. Therefore they may be slow to react, much less suggest, innovative experiments.

So many companies appear to be reacting to efforts to improve sustainability rather than proactively bringing them to the market in concepts, pilots and tests. Similarly they often only deliver on retailer requests under competitive threat.

But a strong VFFS vendor can help to creatively address these requirements, and provide innovative ideas to challenges, like sustainability, which are commonly focuses of the C-Suite and boards.

Rovema offers a number of technical features which substantially improve sustainability with packaging material reduction (gauge and in2), package rejects, and excess filling. We've also created remarkable systems to run both paper material and traditional coextruded films. CPG guide to sustainability and VFFS machine execution with paper

Further, systems with integrated design (single facility vs. single brand label) facilitate satisfying retail trends including shelf-ready packaging. It's a shame for marketing/merchandising/brand folks to hesitate to fully explore what might be reasonably attainable, because machine projects are considered from a very narrow, predefined scope.

Successfully Navigating Shelf Ready Packaging DisruptionBalance Sheet Strength - Supplier Longevity

When suppliers sound the same (and realistically most do) it's easy to assume that they are the same. While suppliers tend to focus on superficial technical distinctions, the core business drivers are sometimes harder to nail down.

But COVID-19 has illustrated the importance of that. Sales volume boosts the P&L topline, but it doesn't necessarily translate to the balance sheet - and the balance sheet is ultimately a good proxy for the suppliers' ability to endure tough times and still maintain extensive and expensive spare parts inventories, retain expensive veteran technical resources, and  survive the likely bad debt losses they'll suffer.

Bottom Line - It's a Business Decision Not a Trip to Grainger

You probably will never put your VFFS machine replacement roadmap on the agenda of your board of directors. We get that.

HOWEVER, there are many business issues (besides speed, weigh/fill accuracy, material cost and refurbishment) that a vertical bagger might touch on which are absolutely on your board meeting list of topics.

If you expand your discussion with vendors beyond specific technical specs for a funded project to share why it matters to strategy and priorities, you might well find that simple, inexpensive proactive design changes can provide flexibility that will bring favorable attention to both marketing and engineering decision makers, and drive better business outcomes.

We understand why many companies and engineering teams are skeptical. As an industry we've made a lot of questionable claims. But to simply skip the step of asking what's possible is to do your business a disservice.