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How Bagging and Labeling Affect Your OEE Calculation

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By Emilie A Lachance - June 01, 2020

Effective labeling and packaging processes depend on successfully managing and integrating equipment, control systems, software, and materials. If all elements of a packaging operation are not well-coordinated, problems such as reduced speeds, incorrect labeling, and frequent material jams can occur, which negatively impact the OEE calculation as well as other important KPIs. In many operations, packaging and labeling lines constitute the major production bottleneck. Consequently, analyzing and solving packaging line problems can be a significant source of increased throughput and production gains.

Today, processors must address the unique supply/demand environment created by the onset of the COVID-19 virus pandemic. Companies that can respond effectively will not only build consumer loyalty but may also capture market share. Partnering with Worximity Technology to carefully monitor productivity and production schedules, capture valuable performance data such as OEE, and remain agile can help companies navigate this difficult period.

Packaging Processes’ Unique Impact on OEE Calculations

The High Number of Consumables Used in Packaging Can Cause Issues

Today’s marketplace is demanding greater product variety, fresher products, and more consistent product availability. For the producer, this means managing a greater number of SKUs, scheduling smaller runs, and maintaining shorter lead times. 

For packaging and labeling operations, these trends mean greater inventories of labels, tape, plastic, glues, inks, containers, and many other consumable material items. In addition, a greater number of final inventory SKUs means more changeovers, more frequent line adjustments, and more changes to feeds and speeds. As a result, close coordination with suppliers is vital to meeting production targets. 

==> Download our OEE Calculator Excel Template

Failure to Fully Inspect Incoming Packaging and Labeling Can Mean Mislabeling and Recalls

Package design and graphics are intended to preserve the product, create an appealing consumer display, and function as effective shipping units. Also, labels must contain a long list of data and information, including content, weight, ingredients, nutrition data, a bar code, allergens, instructions, and more.

Errors can be made anywhere along the supply chain, from design and printing to label selection. Accepting a shipment of incorrect labels can result in mislabeling and even recalling a complete production run.

Further, labels and packaging materials can be damaged in many ways, from mishandling in the warehouse to misfeeding at the labeler or package feed. Formal and complete incoming material inspection, as well as in-house material handling procedures, are critical to ensuring labels and consumables are correct and undamaged before they enter the production process. 

Improper Integration of Packaging Systems, Equipment, and Controls Leads to Stoppages and Jams

Packing and labeling operations are often characterized by a group of highly integrated and synchronized equipment and processes moving product and packaging material through many carefully planned steps. These steps incorporate material hand-offs and physical manipulations (e.g., folding and unfolding). Training, formal procedures, and regular maintenance are critical to ensuring packaging lines are set up and operated both correctly and smoothly. OEE calculations can show if packaging and labeling are experiencing unnecessary problems.

Lack of Process Redundancy Can Mean Lost Production and Lower OEE Calculations

Having standby or backup equipment available to put into service should the primary production line break down can be a cost-effective method for avoiding lost production. Redundancy can pay for itself when compared to missed delivery targets and possible lost market share. 

Other Losses That Impact the OEE Calculation

The Six Big Losses

 Continuous improvement programs generally include analysis of six major areas of production loss. These six apply to all production processes, including packaging and labeling. The six big losses are:

  1. Equipment breakdowns
  2. Setups and machine adjustments
  3. Startups
  4. Idling and minor or micro-stops
  5. Reduced operating speeds
  6. Rejects and reduced yields

Packaging processes include opening, filling, closing, gluing, taping, sealing, and labeling in a single group of coordinated processes. The above problems can all reduce a company’s OEE calculation. As a result, monitoring OEE is a critical element of managing processing operations and meeting production goals.

Worximity Technology, the leading supplier of production line monitoring equipment, provides data collection and analysis systems for monitoring manufacturing operations. Worximity’s TileConnect process sensors collect production line data, including micro-stops, starts and stops, speed changes, and other variables, and sends the data to the cloud in real time. Then, Worximity’s Smart Factory analytics monitoring tool calculates OEE and other relevant KPIs and displays the results on TileBoards (dashboards) located throughout the factory. Employees can monitor production and, if conditions change or deteriorate, can take immediate corrective action.

Connect with Worximity today to discuss how our Industry 4.0 systems can be used to analyze not only your packaging and labeling operation but your entire plant. Our technical consulting staff will be happy to show you the advantages of our Smart Factory analytics and cloud-based production monitoring solutions. To see the benefits firsthand, connect with us to schedule a demo.

Smart Factory Analytics Ebook


The Worximity Smart Food Factory solution is a low-cost hardware system that can be up and running in a few hours combined with an easy and intuitive yet powerful analytics dashboard that provides fast ROI to start and a roadmap to full-on IIoT success.

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