When Does a Print and Apply Make Sense?
I work with many types of customers who want to understand the best time to consider a print and apply system. Although the canned answer “it really depends” is an easy out, I wanted to demonstrate a couple of examples that may help answer this question.
To put this into perspective, a simple print and apply application is very easy to illustrate payback.
- Existing power conveyor and fixed scanner used to ID each package as it passes
- Labor input required to apply a shipping label is 1 person for 300 packages per day
- Adding the print and apply function will negate the need of the equivalent of a single operator
- Assumed total burden cost of a single operator of $125/day. In a 20 day working month @8 hours per day, the total cost of this part of the operation is $30k per year
- Customer has existing label file (such as .zpl format) to query for each package
ROI Summary: In this example, if a print and apply can be installed and integrated under these assumptions for <$30k per year (this would be a very basic system to be fair, but very possible) , then the ROI is under 1 year on labor alone. That said, a typical operation shipping 300-1000+ packages per day will have several pack stations where several people are doing all the manifest operation at the final pack out. I single print and apply system that is merely identifying a package and applying a label may have a much better ROI if it trims that step from several operators.
Utilizing Print and Apply as a Total Solution
A more integrated system with automated scanning, weighing, dimensioning, and a verification scan is more involved, but also removes even more labor as well as validating that a correct label was applied to the correct package.
A typical scenario would be an operation that is already shipping 1000+ packages per day but has no automation at all.
- No existing powered conveyor
- Labor input required to scan, calculate DIM weight, cube, and label 2,000 packages is 6 people
- Entire process from finished pack box through end of line will replace labor equivalent of 4 people
- Assumed total burden cost of a single operator of $125/day. In a 20 day working month @8 hours per day, the total cost of this part of the operation is $30k per year per person, totaling $120k for 4 people
- Verification process will save additional cost due to shipping errors (let’s arbitrarily assume this calculates to $2,000 per month)
- Customer has existing shipping software that produces a label file (such as .zpl format) when system scans each package
ROI Summary: In this ‘full system’ example, the range varies greatly on overall cost. For argument sake, we will assume it cost the customer $125,000 for everything needed. Any operation shipping 2,000 packages per day will have several pack stations where several people are executing all the manifest operation at the final pack out.
A safe ROI is <1 year considering labor and an arbitrary cost of current shipping errors. Formula used: $120k + $12k = $132k. $132k – $125k investment = $7k in the black in under 1 year. In reality, I rarely see real-world ROI go over 9 months, most of the time under 6 months.