EOL Cost

End-of-Line Packaging Cost Per Unit: Building a Defensible Quote

A money-first breakdown of cost per case for end-of-line automation: the five drivers, a quoting method, and the estimating traps that blow up payback.

Cost per case at the end of line is the sum of five buckets: consumables, direct labor, machine time, scrap and rework, and allocated overhead. A typical hand-packed and hand-palletized case might carry 0.14 dollars film and tape, 0.38 dollars labor, 0.05 dollars machine, 0.03 dollars scrap, and 0.11 dollars overhead, totaling 0.71 dollars per case. Automating usually collapses the labor line from 0.38 to under 0.09 dollars while adding depreciation to the machine bucket. Quote the delta per case, not the absolute, because buyers approve automation on the spread against the manual baseline.

Consumables are the most predictable driver and the easiest to underquote. Stretch film for palletizing runs 0.018 to 0.035 dollars per meter, and a typical pallet wrap uses 18 to 26 meters, so 0.40 to 0.90 dollars per pallet, or under a penny per case at 60 cases per pallet. Shrink film for bundling is heavier: 0.06 to 0.12 dollars per bundle. Case tape, hot melt glue, and labels add 0.03 to 0.09 dollars per case. Shrink Wrapper Cost and Case Packer ROI both want the per unit consumable figure, so weigh actual film draw on a scale rather than trusting the roll spec.

Direct labor is where automation earns its money, and it must be quoted at the fully loaded rate. A 32 dollar base wage carries to roughly 44 to 48 dollars loaded once benefits, payroll tax, PPE, and supervision are added, a 1.4 to 1.5 multiplier. If manual palletizing needs 2.5 operators per line and automation needs 0.4 of an operator for tending, you remove 2.1 heads. At 46 dollars loaded across 4,000 hours, that is 386,000 dollars a year. End-of-Line Labor Savings and Palletizer Payback both key off this loaded rate, so a quote built on the 32 dollar base understates savings by a third.

Machine time cost is depreciation plus energy plus maintenance, expressed per case. A 600,000 dollar palletizer depreciated over 7 years is 85,700 dollars a year; across 2,700 cases per hour times 4,000 hours, that is 10.8 million cases, or 0.008 dollars per case. Add energy at 15 kW times 0.12 dollars per kWh over 4,000 hours, which is 7,200 dollars, and maintenance at 4 percent of capital, 24,000 dollars. The machine bucket lands near 0.011 dollars per case. Robotic Palletizing Utilization matters here: if utilization drops from 85 to 60 percent, that per case machine cost rises by 40 percent because you spread fixed cost over fewer cases.

Scrap and rework hide inside a quote and destroy margin at scale. A 1.5 percent case damage rate on a 6 dollar finished case is 0.09 dollars of loss per good case shipped, larger than the entire consumable bucket. Label misapplies at 2 percent on a 0.04 dollar label plus the rework labor to reapply can reach 0.05 dollars per case. Carton Sealer Throughput and Labeler Throughput feed reject rates that you must price, not just count. Quote scrap as a loaded number that includes the value already added to the unit, not just the raw material cost of the packaging.

Overhead allocation is where two honest estimators diverge by 20 percent. Spread facility, utilities, QA, and indirect labor over machine hours or over units, and be consistent. At a 55 dollar per machine hour burden and 2,700 cases per hour, overhead is 0.020 dollars per case. If you instead allocate on labor, automation looks artificially cheap because you removed the labor base the overhead rode on. Pick an activity base that survives automation, machine hours or throughput, so the quote does not swing wildly the moment headcount drops.

Build the quote bottom up, then sanity check top down. Sum the five buckets to a cost per case, multiply by annual volume, and compare against the current all-in spend per case from the P&L. If your automated estimate is 0.31 dollars per case against a 0.71 dollar manual baseline on 10 million cases, the annual saving is 4.0 million dollars, and Case Packer ROI or Palletizer Payback should return a payback under 2 years on a 600,000 to 900,000 dollar cell. If the calculator shows 4 years, a bucket is wrong, usually the loaded labor rate or the utilization assumption.

The three most common quoting failures are optimistic uptime, missing changeover, and ignoring ramp. Quoting 95 percent availability when the floor delivers 82 percent overstates annual cases by 16 percent and understates cost per case by the same. Omitting 30 to 60 minutes of daily changeover on a multi-SKU line inflates capacity by 8 to 13 percent. And a new cell runs at 60 to 75 percent of rated speed for the first 8 to 12 weeks during debug, so blend a ramp factor into year one. A defensible quote states each assumption as a number a plant manager can challenge.

Published 2026-07-01.