When businesses seek packaging solutions, deciding whether to rent or buy a filling machine can be a crucial decision. For small and medium companies, buying machines involves a large investment that can have very significant impacts on cash flow. While automation can increase productivity and profitability significantly, a business has to weigh this against the initial investment, especially if they need to take out loans.
The other option is to spread the investment and rent a filling machine, a flexible option that undoubtedly suits some businesses. This article will look at the advantages and disadvantages of buying and renting filling machines, helping companies decide the best way forward.
Why Use Filling Machines At All?
Of course, the first question to ask is whether you need filling machinery and what benefits it brings to an Australian business. In the face of increased competition and pressure to lower costs, filling machines offer a number of potential benefits.
Firstly, filling machines improve productivity significantly, allowing you to fill more containers more quickly while reducing labour costs. Secondly, machines deliver much better filling consistency and produce less wastage from overfilling.
In addition, machines, whether semi-automatic or fully automatic, are much quicker than filling by hand and reduce manual handling and the risk of damage or workplace injuries. Finally, the right machine lets you scale production up quickly, without paying staff overtime and incurring other overheads.
Filling Machines are an asset
As you would imagine, buying a machine outright is a significant investment, but you do own the machine as a business asset. For an established business that knows exactly what it needs, automated machines can bring multiple benefits to production lines. If operators, technicians, and managers are already familiar with the technology, buying is often the right choice.
However, for other businesses, especially smaller ones, the balance between the advantages and disadvantages can be different. If you buy a filling machine and it does not fully suit your products, or your new product line does not sell as well as hoped, you risk stranding that money.
The True Cost of Ownership
When buying a filling machine, you have to consider more than the initial purchase price and add in the other costs of ownership over the entire lifecycle of the unit. This builds up when you purchase a filling machine that will potentially work for decades.
Not only do you take into account the initial cost and loan servicing, but also you need to look at preventative maintenance, repairs, and downtime if the machine breaks down. Conversely, renting means you don’t have to worry about the lifecycle costs of buying, maintaining, and disposing of the machines, because this is often included in the rental fee.
Finally, you have to consider the installation costs when you buy a machine. Although some manufacturers, such as Asset Packaging Machines, work with you throughout the complete installation cycle, other manufacturers do not offer this.
Upgrades and Bottlenecks
For larger businesses, a filling machine is rarely a standalone part of the production. There is little point in upgrading one part of your production line if you have bottlenecks elsewhere. For example, will you need to invest in additional conveyors and tables, capping machines or extra staff to cope with the workload?
If you buy a liquid filling machine with higher throughput, can your labelling systems cope? Again, hiring a machine allows you to test the technology, although detailed initial planning is essential whether you rent or buy.
One other advantage of hiring filling machines is the flexibility, For example, if a product launch isn’t as successful as expected, you could be left with an expensive machine sitting idle. As an alternative, machine hire lets you experiment with new systems and test new products with less risk. If your business takes a downturn, you can send the machine back at the end of the lease.
For seasonal products or one-off orders, you can upgrade the system by opting for additional filler heads. This means that you do not tie up money in equipment you use only occasionally, but you won’t have to turn down large orders because you lack the additional capacity.
Of course, if you work with a supplier who both sells and rents out machines, you can also hire additional components for a machine you own.
Business Expenses and Assets
For some businesses, hiring filling machines is an operating rather than a capital expense, which often makes managerial approval more likely and may offer different tax options. Conversely, the other side is that a machine you own is an asset of the business with its own value and amortisation.
Accessing New Technologies
Renting gives access to the latest technologies on the market because you can upgrade to newer machines if you think they will benefit your business. At a time where manufacturers are developing new products with different properties, designer containers, and new types of caps, this can be a huge advantage.
Naturally, with the right manufacturer, adopting new systems is also possible with machines you buy, because they continually offer upgrades as technology changes and give your business the ability to adapt.
Can I Buy a Used Filling Machine?
As a final point, another option involves splitting the difference and buying a used filling machine. However, this is not always possible with Asset Packaging Machines. Our machines are so durable that customers are often reluctant to part with them and used models aren’t that common on the second-hand market.
Choosing whether to rent or buy a machine largely depends upon your business, your industry, and your future plans.
For an established business with mature production lines and existing expertise, buying a machine is usually the better option. However, if you want to test the technology, cannot justify the upfront expense, or need sporadic extra capacity, renting can be a very good option. Of course, you can always buy a machine later on if the technology proves itself and you think it will benefit your long-term goals.
Most importantly, you can access advanced machines that are financially out of reach at present, and reap the benefits, which is important in an age of high consumer competition
The best way to ensure your business chooses the right option is to speak with an established Australian packaging machine manufacturer, like Asset Packaging Machines, which offers filling machines to buy and to hire. We can look at your business and production line and help you make the best choice. Contact us for more details about hiring filling machines