Some Like It HOT

We tend to think of evolution as a straight-line climb out of the swamp and into Starbucks. But sometimes it doesn’t quite work out that way.

Six hundred years of golfing haven’t yielded a one-club game. And although personal-electronics manufacturers keep adding functions to their gizmos, the number of gadgets people carry keeps multiplying.

The same phenomenon can be observed in the adoption of automated packaging systems. When automatic sealing systems were first developed, the hot-seal process was considered an order of magnitude more efficient than manual packaging. And it was — in some circumstances. More recently, cold-sealing was touted as safer and simpler and better than hot. And it was — in some circumstances. But today, most experts say, the right auto-pack solution depends much more on what’s being shipped (and how much) than on the superiority of any particular process.

Cold case

At apparel and home goods merchant Lands’ End, for example, the distribution center is backing away from the cold-seal automated packing system it installed several years ago. “For some industries it’s great, but for apparel, it’s difficult,” says Dan Whitnable, engineering manager at the Lands’ End facility in Dodgeville, WI.

Until a few years ago, Lands’ End had used a hot-seal process. A hot-sealing system uses heat to melt a resin and create a seal around the item. Not satisfied with the delivery presentation the customer received — Whitnable says garments would arrive wadded up in one corner of the envelope — the firm shifted to a cold-sealing process. A cold-sealing system joins a top and bottom layer together with an adhesive. “There’s a big blade that comes down [and] cuts that material, and in the end you get these little ‘raviolis,’” explains David Gealy, a systems consultant for Forte Industries, a distribution engineering firm in Mason, OH.

Initially, Whitnable says, Lands’ End had believed that because a cold-seal machine has fewer moving parts than a hot-seal system, its maintenance would be easier. This didn’t turn out to be the case for the cataloger, however. “It’s kind of like, in theory, a diesel engine should be cheaper because there are fewer moving parts than a gasoline engine,” Whitnable explains, and yet all his friends with diesel cars seem to end up visiting the garage just about as often as he does.

And while the cold-sealing process improved the product presentation, it created a new problem. In the cold-seal process, the parcel — a laminated layer of poly on paper — flattens so tightly around the garment that it actually follows its outline. But though the packaging looks better, “it’s really heck to open,” Whitnable says. “So what happens is our customers attack it with scissors… Two or three or four times a week we get a customer complaint saying, ‘I cut the end of my garment.’”

Whitnable says Lands’ End thought about putting a tear strip in, to make the envelope easier to open, but a strip would unbalance the big rolls of very thin sheeting used to seal the goods. A box would work too, but then you might as well forget the sealing machine altogether.

On top of those disadvantages, Whitnable adds, cold-sealing can be more expensive than other packaging alternatives. Products that might be sent in an 11-cent kraft bag end up costing 19 cents to be cold-sealed. “I’m not down on the material or the process, but for us, we’re finding it’s not great,” Whitnable says.

Safety first

While Whitnable says he’s seeing a move away from cold-sealing among apparel shippers, David Peeples, a senior manager at Sedlak, a supply chain consulting firm based in Richfield, OH, says he hasn’t seen any clear trend toward or away from cold-sealing systems. “I know people who have gone in both directions,” he says.

He says firms choose cold-sealing for a few reasons. Although it can be as much as 40% more expensive to operate than a hot system, it does have some advantages. One is that the cold system is perceived as safer, although Peeples points out that this may largely be a perception issue, as he’s never actually heard of any hot-sealing injuries.

Another plus is that with a cold-seal system, a greater range of materials can be used for the packages, including paper-poly combinations. In addition, the cold-sealing system uses less floor space in the distribution center, says Roger Cunningham, a partner in the Atlanta-based distribution consulting firm DCB.

Manual labor

For many distribution centers, automated packing in general may not make much sense. Gealy of Forte Industries says an auto-packaging system really works only when the product can be batch-picked and the goods are all a similar size.

Also, catalog or Web company needs to have enough volume to justify the investment. The great thing about automatic packaging is that it’s fast — most systems can turn out 1,200 packages an hour, compared with the 60-100 that an individual can pack manually, according to Peeples. “The machine can crank out an incredible number of packages per hour,” he says. But such speed probably isn’t necessary — or cost-effective — unless a line is shipping 5,000 or more packages an hour.

Indeed, most of the advantage of automation is in labor savings. Systemwide, DCB’s Cunningham says, an automated machine can potentially yield a savings of 15%-18% in direct labor costs, if all a center does is fill orders. Savings aren’t higher, Peeples says, because people are needed to feed and maintain the machine. In budgeting for such equipment, he notes, operations managers often forget to factor in those maintenance costs.

It’s easy to be similarly shortsighted in not figuring out what kind of impact the faster machine will have on the rest of the process. “Automation tends to be kind of a quick fix to most folks,” Peeples says. “What people tend to forget is that it’s a fairly disciplined process that people have to go through to make anything work.”

Bennett Voyles is a New York-based business and financial writer.