Packaging automation manufacturer and integrator Foodmach has introduced a new way to finance packaging line machines. Foodmach FLEX allows manufacturers to pay only for the output of the equipment, not the equipment itself.
Packaging machines are traditionally purchased as a capital expense, with the new owner taking responsibility for the costs of maintenance, service and spares. FLEX is a machinery-as-a-service (MaaS) arrangement, whereby the user only pays for the desired result of the machine’s function.
Foodmach director Phil Biggs said: “FMCG manufacturers don’t really want to buy, say, a case packer or a filler or a stretch wrapper. What they actually need is a packed case – or a filled bottle, or a wrapped pallet. A machinery-as-a-service model allows FMCG manufacturers to buy what they want in the first place, which is output of in-spec products.”
The MaaS financing model is predominantly used by makers of office equipment, medical devices and jet engines. Data capture is integral to its success. The rise of IoT technologies such as blockchain and cloud-based computing makes its use in factory settings possible.
Foodmach CEO Earle Roberts said: “It takes expertise in line integration and data capture to set the reporting system up effectively. We’re able to offer MaaS with confidence due to our controls team’s strength and experience in i4.0 factory integration.”
FLEX finance is available for Foodmach’s palletisers, depalletisers, fillers, case packers, stretch wrappers and automated and autonomous guided vehicles.
The arrangement is based on contractual performance targets and terms which are negotiated upfront and stored in a cloud-based and secure environment. Equipment is either custom-designed and manufactured or – in the case of third party OEMs, supplied – with the usual start-up support, training and spare parts.
The difference is that there is little or no up-front cost.
Performance data is collected by the machine’s controls and delivered to the cloud via a secure blockchain-based reporting system. The MaaS platform calculates and provides an auditable and immutable trail of the financial results based on the contractual terms.
Execution of payment is all data-driven, based on the output of the machine.
Biggs said: “FLEX is much more than just an equipment financing deal. The end-user is entering into a manufacturing service agreement with Foodmach, with both parties aligned in the sole objective of maximising machine reliability and product output. We win only when our customer wins, so ongoing performance optimisation is built-in to the agreement.”
For Roberts the MaaS finance model is proven and trusted. He said: “Now it can help Australia’s FMCG manufacturers compete in our increasingly tough business environment.”