Also do you have a solution for loading the cones for bother ER-200 and the infusion machine as well?
Thanks
Thanks Shrimp… We really appreciate it… How long have you been running the ER-200?
We don’t run an ER-200. We run a ER-100 thus I can’t really advise as to the cone loading solution. Ours uses a rotary style where we just load stacks of cones at a time.
We also don’t run infusion so can’t comment on that, but I would imagine that’s also a big bottleneck in the process.
We’ve run our machine for about 18 months now.
I’ve seen this model for robotic palletizing. In this case it went by operating time versus units produced. At first it seemed like a great option, since there is an incentive for the manufacturer to keep the machine running, like you said.
But it does open up some potential issues. You don’t always hold the keys to the backend, and thus rely significantly on the manufacturer. If the service they provide is good, then that’s great - but if not…
The model of paying only per unit seems great, as there is an incentive to keep it running - the problem is the manufacturer is not responsible for eating the cost of not running. So if you lose orders or even a customer because your machine was down, there are few options. If the maintenance service is unsatisfactory you don’t have the option of using your own resources.
It does seem enticing - especially if your capital budget is limited. Being able to get a new piece of equipment in the door without sacrificing CAPEX is always appealing. But in the long run you will pay more for the equipment than you would have if you just purchased it. If you have an option to eventually buy out the equipment that’s better, but the company I worked with that uses this model did not give that option.
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We have a PreRoll-Er 200 that we are trying to sell at the moment. I was the main operator for about a year and got good output. Numbers similar to what @Shrimp explained. Unfortunately with laws changing in the hemp space all over we don’t have much of a use for it anymore.
If anyone is interested, reach out and I can answer any questions.
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That was me! We call the ‘pay per joint’ model Production-as-a-Service… It’s not for everyone but it is ideal for folks with an aggressive vision as we can build and deployed 2 or 3 million worth of machines for no up front costs… As long as the partner can keep the machine working we’ll support it and send more and refer as much tolling business as we can (it’s not in our best interest to send a lof of machines to the same area as they are pretty expensive to build and quite a bit more advanced than most of what’s out there). Ours are best for folks working with infused material as we condition the machine and use tricks like ‘air compaction’ to move fast and accurately. Happy to chat any time if you have questions / ideas! Jim Pavoldi (Accelerant)
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We use robotic arm cone loading (6 boxes at a time) on an Accelerant PRO2 (about 1430 pre-rolls per hour with infused material IRL)
It’s super tricky but the numbers in real-life seem to work. A lot of ceo’s fantasize about running 3 shifts a day, seven days a week but it’s not really what we see in the wild. 1st shift’s output tends to be the best, and support is better in almost all cases (senior engineers are not staying up all not to monitor Slack). We’ve found that if you look at prior performance, how much was actually produced per day, all the related costs and headaches / downtime, then counter with efficiencies (ex, we have teams running 3 machines at a 1500 per hour goal with a single operator running all 3) then the math starts to make sense where it’s really tricky to buy, lease, or finance a comparable machine with hopes of having it run perfectly for 4+ years as opposed to an assured machine with all the updates getting replaced yearly if needed. The downside is not everyone is invited to participate as there’s so much risk to the manufacturer. Not joking at all, you need the team frosty during site visits as we’ve turned folks down last minute for throwing off vibes of being a bad bet.
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Not sure about this equipment, but if a palletizer cannot last 4 years, that’s a big problem.
I’m in food and beverage, not cannabis, but we certainly do have effective off shifts. In many cases they can outperform 1st shift. We run 7 days a week most of the year.
If a machine goes down, our maintenance team is held to the fire until they can get it running - which they always deliver on. I’d be very nervous to rely on an outside stakeholder - who does not have their job on the line in the same way.
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They have their revenue and profit on the line. They don’t get paid per unit if units aren’t being produced.
They are as invested in your operation as your owner
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That seems very unlikely to me. They have many units in the field, and their business is making and selling machines.
If you’re running one of these, it’s probably a significant portion of your revenue.
If a single machine at an off-site location being run by someone else is a big chunk of the machine builders revenue… I wouldn’t expect them to exist for very long.
With that said, all of these details can be covered by contractual agreements. “If it goes down, you fix it within x hours or pay us y dollars per hour of lost production” tends to make things happen pretty quick when it comes to service and maintenance.
In a past life I was once responsible for driving a part to a remote site that was losing well over $10,000 per hour of downtime. I was told that if I got any speeding tickets on the way that the company would pay them, but that if I got the vehicle impounded I would get fired for the additional delays.
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That’s the sales pitch. Here’s a real example:
Machine goes down for 6 hours…
For them it means 6 hours of not getting paid.
For you it means 6 hours behind schedule, a critical shipment is late, a customer is potentially lost if this occurs too frequently.
You have a lot more on the line than they do.
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When you’re operating sites producing 10-500k pcs per week of prerolls, you have contingencies in place to manage down time on machines.
That could mean redundancies, secondary processes, or built-in time gaps to allow for these down times.
All machines have down time. Upstream and downstream processes/ancillaries could be affected by down time.
Theres alot to think about when scaling up and automating, planning is the most important part.
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It scales pretty clearly with more team available as more machines go out. It’s pretty common for us to encourage a second (or 3rd or 4th) machine for redundancy as well for anyone doing big volumes.
When I’ve seen the contract for the palletizers (and yes I understand that this is probably a bit different) the contract treated the machine like an hourly worker. You paid them by the amount of time they were working. There was no contingency to cover downtime besides the fact that you wouldn’t be paying for it while it was down - but they certainly wouldn’t be willing to pay you for the downtime if it exceeded x amount.
Their sales pitch is “we have an incentive to fix it as soon as possible” but honestly a service tech who is getting paid to come out and service a machine that you own has more of an incentive to get a machine running ASAP than this model does, since they’re explicitly being paid to come out and perform the service.
I see this model as appealing to company leadership who can get equipment in the door without a capital expense, but that kind of thinking is short sighted imo. And I say this as someone who was almost sold on the model until I thought it through.
Hello Farid, thanks for your insights. We make sure we send a second machine as soon as a single shift is hitting capacity so the redundancy there should mitigate the downtime risk of a single machine. We had crew at Pack expo and the palletizer space is pretty mind bending. The as-a-service model has two camps but the kool-aide drinkers like us are always trying to capture the spirit (rather than lock in a potentially abusive model in the sense of getting folks to way overpay compared to owning). Just as an example, we’ve approached all 53 and lowered throughput prices by about 18 percent in the past 2 months based on new efficiencies. There’s another camp that is trying to use the model to charge more than they user could have leased or financed similar machines for but our camp is to make sure they’re well-positioned and that we’re the best choice with a meaningful monthly savings ($2-$3k per machine) vs the best possible financing of a competing machine. I know someone else mentioned having engineers on staff but our goal is to have them doing something else important, not even worrying about the pre-roll operation and while we in the dawn of the market with manufacturers hovering around 300k monthly pre-rolls a salary like that will really impact the price-per-unit. My “CFO Pitch” for PaaS vs own (or lease) is pretty tight… The harder part is the folks that are anti-automation and think they can beat it by hand with John Henry by looking at hourly wage vs pre-rolls produced. A few partners have been really honest with me now that they can look back and realize the true cost included parking, space, PPE, climate, hardware like knockboxes, HR headaches and worse, etc. We’ll be at MJ Biz this year, booth #4608f if you want to see the machines or kief-coating automation run live. I am Jim Pavoldi IRL and we’re Accelerant Manufacturing jim@accelerantmanufacturing.com
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HAHAHAHA got me
Zing! hahah
are you running infused? What type?