Monday, March 1, 2010

Binders, Printers, & Businessmen II - Confronting Automation

We specialize in mechanical binding equipment: Punches, plastic coil binders, and wire binders. We sell the Rilecart line of wire binders. Rilecart calls us the TP-480 guys. Why? The Rilecart TP-480 is their slowest, entry level machine. It competes with James Burn, Renz, GBC—all of which can bind up to 1,000 books per hour. This machine, like the others, costs about $30,000. Rilecart makes other models that bind 1,500, 2,500, and 4,000 books per hour. This is what they mostly sell in Europe. Europeans are very labor conscious. Here in the US, we are the opposite when it comes to binding books.

Most bindery owners usually opt for the slowest, most economical machines. They just figure they’ll throw labor at it or add another shift. In one of my last blogs I showed that using a slow wire binder cost the owner $30,000 over a 15 year period. That was just going from a 200 per hour machine to a 400 per hour (conservative estimate) machine without insurance, workman’s comp, or overhead.

It is not unusual to see ten or twelve people working six wire binders when three or four operators could bind up to 4,000 books per hour on Rilecart’s fastest machine (The B-599 seen above). How much money would you save if you saved the labor costs of just six workers at $10 per hour? The savings is $125,000. This doesn’t count taxes, insurance, workman’s comp, or overhead. If we add 50% then we come to $187,500 (yearly cost), which is also the one time cost of a brand new Rilecart B-599 automatic wire binder, capable of binding up to 4,000 books per hour. Add to that the six wire binders that cost $30,000 a piece at $180,000 and that adds up to real money.

I don’t understand why so many owners fail to do the math. I refuse to believe that Europeans are better businessmen than we are. So what’s the disconnect?

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