Buying Packaging Equipment: Features versus Frills

Faced with tight budgets and grim economic forecasts, some pharmaceutical manufacturers are thinking twice about adding extras to their machinery purchases.

Erik Swain, Senior Editor

Most packaging machines can be supplied with optional features that enable them to do more than just package product. Nowadays, packaging equipment can acquire data on the packaging process, inspect materials and packages as they move down the line, and apply codes and other marks in-line. As a result, considering these features is becoming a more crucial part of the packaging machinery purchasing process.

In less cost-conscious times, many pharmaceutical and medical device manufacturers were inclined to buy equipment with all, or nearly all, of the available extra features. Some, to be sure, were needed to satisfy the regulatory requirements of the industry, but others were not quite so critical.

Now, however, with cost considerations foremost in the minds of packaging machinery purchasers, careful thought must be given to whether extra features are actually needed.

Many packaging machinery suppliers are able to help these manufacturers reach such conclusions. "I sense the times are changing," says Marty Moscowitz, regional manager, medical, consumer, industrial, for Multivac Inc. (Kansas City, MO). "Because of the economy and the health of certain industries, companies are more prudent now. In the past, they would want to add more frills and extras, and now they are taking a second or third look at that. They're taking a modest, more conservative view of things."

John Kirk, vice president of sales and marketing, pharmaceutical liquid products, at Bosch Packaging Technology (Minneapolis), agrees. "There are people on both sides of the no-frills/ feature-laden equation. Historically, 10­15 years ago, the pharmaceutical industry was characterized by people looking at feature-laden equipment. Today, the economy is a very important factor, and the cost of production and equipment has become an important factor."

FEATURES STILL NEEDED

The R530M2 from Multivac can be equipped with different die sets to accommodate different products.

For the most part, pharmaceutical and medical device firms, especially the larger ones, are still unlikely to go for a totally no-frills option. They need to ensure regulatory compliance, so they usually write extensive specifications.

"There are two issues we see in most of the pharmaceutical applications we are asked to quote," says Dave Schuh, vice president of sales and marketing for MGS Machine Corp. (Maple Grove, MN). "One relates to ensuring that the customer understands our approach to following GMP guidelines and quality practices. The second is reconciling our standards to the customer's specifications that include their requirements as they relate to the first issue. This can include validation support services as well as their direction on the specifics of how to build equipment for them. Responding to both issues can result in adding optional equipment items, modifying the scope of services we supply to support their validation program, or substituting components to respond to a build specification. These responses seem to consistently drive the built-in costs of the project upward. Each customer wants it his or her way, which makes it hard for us to pick a generic standard that would consistently support the majority of specs we see."

Adds Ed Mazur, vice president of sales and marketing, DT Packaging Systems (Leominster, MA): "We deal a lot with big pharmaceutical companies, and all they buy is feature-laden equipment, not too much in the way of no-frills. A lot of them will write a pretty extensive specification that will lay out what they're looking for."

However, smaller manufacturers, especially generic pharmaceutical firms, are more likely to request a no-frills machine, or one with as few extra features as possible, he notes.

"The smaller pharmaceutical companies and the generics don't usually have those kinds of extensive specifications," he says. "We can write them a detailed spec of our machine, explain that this is what they are buying, and have them sign off on it."

LONG-TERM VERSUS SHORT-TERM NEEDS

Despite the pharmaceutical industry's special requirements, many equipment suppliers are helping manufacturers choose the features they really need. Such a discussion often takes place after the equipment supplier has initially reviewed the requirements submitted by the manufacturer.

"There has been an attempt on the part of suppliers to present a base machine and then provide a lengthy list of options," says Schuh. "For example, if you want 15-minute changeover, that needs custom tooling, which is more expensive. We try to provide as low a price as possible for a machine that actually does the applications that the customer requires."

An important part of this discussion is to get a realistic idea of the end-user's long-term needs. In many cases, a pharmaceutical or medical device manufacturer may not need a certain feature for its current packaging requirements, but may need it in the future, especially if production is expected to increase or changes to package design are envisioned.

"You have to have all the information about their application and what they are trying to accomplish, either today or 5­10 years from now," says Moscowitz. "We try to design the machine around what it should do today, and what it might realistically potentially do in the future.

"We can often build into a machine the capability to accept further up-grades. For example, they might not need a flexographic printer on the machine now, or they may not need it set up for automatic loading or cartoning, but are thinking that they might need those options in the future. Knowing that, we can design into the machine, not at a substantial cost, the mounting brackets and other hardware for them. We could make certain modifications to the programming that could easily accept these particular items in the future. It is important that equipment be designed in a modular fashion, where you can add and subtract modules, so they can potentially be upgraded or modified with minimal difficulty."

Kirk says Bosch has a similar philosophy. "We try to look at the requirements of the machine or line today, and where they see the business going. If someone wants a no-frills machine, we ask if they've thought about the implications of that. If they have, then that's the way to go. But sometimes they recognize that their needs in the long term may be something different."

However, Kirk says, while there are benefits to beginning with fewer features and adding them later as necessary, there may be costs associated with that approach as well.

"When you get a machine into a facility and validated, many times it's difficult to do a major upgrade to the machine because of revalidation costs, mainly the costs of bringing the machine out of production," he says. "The actual capital costs of revalidation are relatively small compared with the implications of being out of production for a period of time."

Discussing this issue needs to occur internally within the various departments of the end-user as well as between the end-user and the supplier, Moscowitz says. "When companies introduce a new product, they have a certain expectation of sales, and it is generally quite optimistic. If it's too optimistic, it can lead to adding extras to the machine that they really don't need," he says. "The production and plant people can't challenge the sales forecast. But they can challenge whether they need to gear the machine up for the forecast 5­6 years in the future."

RETHINKING SPECIFICATIONS

There are ways, however, to keep machinery costs down while adding essential features. A lot of potential savings can be achieved if firms modify the way they write specifications, says Mel Bahr, chief executive officer of MGS and chairman of the Packaging Machinery Manufacturers Institute (Arlington, VA).

"I have devised a list of things that should not be in the specification," he says. "Stay away from things like specifying components. Use the manufacturer's standard ones. If you are dead set on a certain brand of PLC or servo, then specify it, but give the vendor a couple of alternatives. Stay away from specifying commodity items like brands of terminal strips or wire markers. That will save you a bunch of money."

Instead, extensive detail should be provided when conveying to the supplier what is required to achieve expectations for the packaging process, Bahr says. "Elements of a good specification include a thorough description of the process, specifics on what you need for speed, and a list of all conditions the machine will be running under," he says. "List things like your expectations for yield, uptime, and rejects."

Other useful information includes changeover expectations, documentation requirements, interfaces, codes the machine should comply with, factory acceptance test requirements and methods, training and installation issues, and warranty requirements.