Ineos Silicas, one of the leading global producers of silica and zeolite products, has implemented Episys’ Ultimate labelling system at its UK office.
The company has 900 employees worldwide across six different sites in Warrington in the UK, the Netherlands, North America, Brazil, South Africa and Indonesia. Its markets for silicas are home & personal care, beverages, surface coatings and catalysts. Its parent company, Ineos, is the third biggest chemical company in the world, which has grown rapidly over the last decade through mergers and acquisitions.
Over the last decade the company has experienced a number of challenges in terms of product labelling. On its Warrington site it now produces 100 different products which divides down into 200 stock keeping units (SKUs). So the company may have multiple supply packages for any given number of goods. Each of these packages have to be delivered in its appropriate package, which could mean a paper sack, a plastic sack, a box, a drum or a bulk bag.
"Each of the packaging solutions was labelled individually and many of those sacks – in particular the paper and plastic sacks were pre-printed with unique product specific and SKU specific information on them," said Kevin McCann, Quality Improvement Manager at Ineos Silicas. "This resulted in us having almost 60 individual paper and plastic sack SKUS in order to be able to pack the various different products that we have on site. This has given us enormous challenges in terms of minimum order quantities of packaging from our suppliers, warehousing of the packaging materials and the working capital that it ties up for us as well."
The company decided that it needed to go down a more generic packaging route. "We are not involved in the fast moving consumer goods business," added McCann. "We do not put our products in boxes onto supermarket shelves where the packaging sells the products. For us the packaging needs to be fit for purpose."
The company looked at a number of different options including; completely blank packaging, inline printing of paper and plastic sacks, through to applications of labels to the sacks.
Also in various sectors the company is required to put more health and safety information specific to that product on each individual package or even on each individual bag. "The option of sending blank sacks to our customers around the world and relying upon the supporting documentation that might be accompanying the packaging was not an option," said McCann.
Out of the three options available, the application of labels to the sacks using an Episys system was far and away the best solution. "We were confident that Episys gave us the ability to comply with legislation and still maintain a product which looked professionally labelled, while essential information was also visible," added McCann.
Many of the company’s goods are used within food in global markets. "We sell a lot of our products into China and within the country there are now import regulations which require distributors and customers to have a food import licence if they are importing food goods or products that are going to be use in food," said McCann. "This meant the company had to have a certain amount of information both in English and in Mandarin printed on individual bags. This becomes quite a challenge if you’re looking at dot matrix inline printing systems on bags. However, for an Episys system you can have any language you want and no matter how small you make the font it’s still crystal clear in terms of legibility. The Chinese customs regulations that we’re complying with drove us toward the Episys labelling system."
Staff at the company had confidence with the Episys technology. "We had people within the organisation who had experience of working with Episys who we quiz about whether they felt the system was robust and dependable enough," said McCann. "And the answer to those questions was yes."
The company has two Ultimate design licences and four Toshiba TEC printers installed on its site, which all have Episys Ultimate print only systems hooked up to them. There is also a central database on which the labelling information is stored and from which all of those satellite printers draw the information.
Ineos Silicas is currently rolling out the project in its Warrington office and once the company has demonstrated its success to its other sites, it will look to roll out the technology in USA & Brazil.
There are two main benefits from having the Episys labelling system. One is cost and the other is security of supply, both are closely linked. "It’s much cheaper for us to have one design of bag for ten products, rather than ten individual bags to suit ten individual products," noted McCann. "When we go to packaging suppliers you have to order bags in bulk. This means our warehouse fills up with bags, it costs money to store them and it ties up our working capital. So there are some real costs we will be taking out of the business as a result of the Episys labelling system.. This allows us to be competitive and cost effective going forward. The technology will probably set a record, in terms of payback time on the project."
The company has replaced its 60 individual bespoke paper and plastic sacks with seven generic paper and plastic sacks and has made a big difference to the company in terms of security of supply, minimum order quantities and warehousing costs. "We’ll never run out of sacks now, we’ll always have the right sack for the right product and we don’t achieve that by having overstocks of packaging materials," added McCann.
Ineos Silicas is fully committed to its responsible care programme. The company has an active interest in safety, health and environment. "This commitment means we put the appropriate health and safety information on to the packages and indeed a lot of our distributors will sell some of our products by the bag or by two or three bags," said McCann. "It’s important that we have that information on individual bags when we ship it to the distributor."
Ineos Silicas is also working on a barcode project for its Warrington site and a key enabler for this is the Episys project. "On this site we store anything between 10,000 to 15,000 pallets of goods," noted McCann. "Our warehousing operation benefits greatly from having barcode transactions which track, not only receipts and dispatches of products, but also production as well. We are now working on a project to have pallet labels which have a barcode on them track the existence and movement of pallets within our site through our SAP system."
Once the dust has settled the company will look at next steps. "We’re currently using A5 labels exclusively and we’re getting a lot of information onto those labels, but what if we were able to get the same information onto smaller labels," said McCann. "If you go from an A5 label to an A6 label it’s not rocket science to work out that there is a big cost savings there in terms of variable costs. The support and service that we get from Episys is first class, we’ve been in partnership for a number of years and look forward to a long future working together."
Note: In 2008, Ineos Silicas merged with a major competitor in the beverage and catalyst markets. The new company, PQ Corporation, is jointly owned by Ineos and The Carlyle Group. Despite the need to change packaging artwork as a result of the merger, the introduction of generic sacks supported by the Episys Ultimate labelling system has enabled the transition to be completed quickly and cost-effectively.