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A: Bill Nesti, AZO, says:

Let’s just pretend we own a candy company, and we’re making hard candies. We use 25,000 pounds of sugar per day. Right now, everything comes in 50-pound bags. In this scenario, that’s 500 bags per day that someone is dumping in a 24-hour period — 166 bags during an 8-hour shift or 20 bags per hour.

That’s how most companies start out. Small craft brewers become bigger craft brewers. They eventually become regional brewers and then become big brewers — same thing with candy companies. We’re using 25,000 pounds per day, which sounds like an awful lot. It wouldn’t necessarily make sense for us to start bringing in railcars because a railcar hauling 200,000 pounds is a 10-day supply. That’s a long time to store sugar while expecting it to flow without picking up moisture, crusting up the silo, and then having flow problems.

In our theoretical application example, a 2,000-pound bulk bag would look more appealing in contrast with railcar transport. Twenty 50-pound bags combined adds up to 1,000 pounds. A 1-ton bulk bag, (2,000 pounds) means that machine operators would only have to change a bag about once per hour. That’s a pretty comfortable situation and more advantageous because there’s less bag handling required. 

Other advantages to using bulk bags include improved dust control and better housekeeping, more effective ergonomics, fewer manpower requirements, and increased safety. An operator dumping 20 bags per hour is a common operation, but it’s a manual operation with a lot of repetitive motion involved as well as a lot of turning and twisting and lifting at awkward positions. There’s a safety and housekeeping component to manually handling bags, not to mention empty bag compaction and disposal.

Let’s say we’ve been in business for 15 years, like many mom-and-pop companies are, and we recognize the advantage of going to bulk bags. We ask a supplier, “Would you please show us how to be more efficient with our sugar handling based on the volume usage that we have?”

The supplier will come back with a suggestion of installing one or two bulk bag unloading stations, and that means we would chug along for 2 to 3 years. Suddenly, if our fictitious company lands a large contract, we could be doing in one shift what we used to do in 24 hours. Our volume requirement triples, so instead of using 25,000 pounds per day, we’re using 25,000 per shift (or 75,000 pounds per day). 

That’s already one-and-a-half truckloads. We could continue with bulk bags, but what that means is instead of one bulk bag per hour, it’s three bulk bags an hour (a bulk bag change every 20 minutes). That definitely works, but I have another option, and that’s to put in a silo to hold a 2-day supply (for example, 150,000 pounds) and receive the sugar in bulk tank trucks.

At that point, we would go to our sugar suppliers and say, “What can we save by purchasing our sugar in 50,000-pound bulk tank truck quantities compared to 2,000-pound bulk bags?” Then you have to start putting this number on the business balance sheet and compare it to what it would cost you to install a silo outside, support equipment around the silo, accessories around the silos, and equipment to store your own sugar (in bulk) in a silo. Other considerations are warehouse space, available process area space, and forklift traffic. Perhaps an outdoor silo makes the most sense in certain situations.

I intentionally used that as an example because there are candy companies in this business who look at this and say, “Sure, it’d be nice just once a day to have a truck come by — you hook the hose up to the silo and don’t have to touch it.”

That’s usually an in-between point where companies have to decide. If you’re a company that has many work-injury-related claims, a bulk silo would take all of our bulk handling away. A truck comes and pneumatically offloads into your silo. A supplier comes along and puts the system in the back of the conveyer from the silo into a scale above the kettles and dumps a 1,000-pound batch in the kettle. In this example, the operator doesn’t have to touch anything but a control panel, and that eliminates bag handling, work-related injuries, and other problems.

Now, we look at that and we say, “Okay, we’ll pay for 150,000 pounds of sugar in a silo in a system that conveys to three scales — for a budget of $250,000 just for argument’s sake.” Put that capital into the system once and then you have the operating efficiency of that system forevermore. 

We might look at the value of automating our bulk bag system with our safety people on the human resources (HR) committee and we ask, “What are all the current workers’ comp claims worth? What are injuries costing per year to manually handle bags?” HR might come back with an answer after doing research and say, “We spend $50,000 a year on that.” Beyond these workers’ compensation claims that are related to a manual bagging process, there are other costs to consider such as empty bag disposal and dust clean up.

Empty bag disposal and having to haul away dust with a sweeper in the factory to prevent a safety hazard with airborne dust are two additional expenses to factor in when comparing manually handling bags to investing in a bulk bag unloader. These two housekeeping processes probably would cost $50,000 per year. Perhaps we can even account for lost product, contamination, and spills. Also, what about the advantage of future capacity at our fingertips. Now, we have to put that on the business balance sheet and to determine whether the new equipment will pay for itself in a few years.

AZO, Memphis, TN, engineers and manufactures ingredient automation systems and equipment.