Guillotine Paper Cutters:

Maximize Your Return on Investment

Not all guillotine paper cutters on the market are equal when it comes to

return on investment

FIND OUT WHY

• Evaluating return on investment before buying a guillotine paper cutter is critical to

the success of your company

• A bad investment decision can haunt your operation for a long time

• Taking into account key decision-making criteria can ensure a shorter payback on

your investment

• The concept of Total Cost of Ownership is a long-term view that enhances the

sustainable development of the company

• High value-added support from your local dealer helps to maximize profits

Guillotine Paper Cutters: Maximum Return on Investment

OVERVIEW

Cutting paper for the printing industry may seem a simple, routine

task, but it is actually the key step in the print production process.

Pre- or post-press cutting, if done incorrectly, can ruin the job, your

profit, and potentially the relationship with your customer.

Because paper accounts for a high percentage of the cost associated

with any particular job, this is the stage where the risk of waste is very

high. However, it is also the stage that offers the greatest

opportunities for optimization. Whether or not a guillotine can

reposition quickly, accurately, and cut efficiently, are some of the main

criteria to be taken into account before investing in a guillotine paper

cutter.

Other gains in productivity are achievable with auxiliary handling

equipment – stack lifters, joggers, and automatic unloaders. These

devices can increase daily production and reduce operator fatigue.

There are also operating cost criteria that, viewed over the long term,

favor one guillotine over another. Guillotines with technology that

incorporates lower energy consumption, for example, will provide a

better return on investment than older technology which may be less

expensive to purchase but consumes a larger amount of electricity and

has high-cost replacement parts.

Analysis of your current cutting technology using multiple criteria

based both on potential gains in productivity and on reduced operating

costs, is a way of assessing the relevance of your buying decision and

its eventual return on investment. Not all products are equal, even

though they may look the same at first glance.

As a result of their performance, low operating costs, and remarkable

reliability, Challenge guillotine paper cutters may give you a payback

on your investment of less than one year, while an investment in other

older technologies can not be justified if you want a rapid return of

your investment.

Guillotine Paper Cutters: Maximum Return on Investment

EVALUATING RETURN ON INVESTMENT - A KEY STEP

IN THE PROCESS OF DECIDING WHAT TO BUY

Making the decision to invest in a new guillotine paper cutter is one

that should not be made lightly. The stakes today are very high. The

ability to fulfill orders quickly, provide quality product, respect

deadlines while maintaining profitability is the key to competitiveness

and growth.

When looking at return on investment of any piece of equipment, all

relevant revenues and expenses over the life of the equipment

purchased should be considered in the evaluation.

Basing a decision solely on the initial purchase cost can lead to a

short-term view of the investment and may prove very misleading in

terms of the ROI.

Challenge recommends calculating ROI using the Total Cost of

Ownership (discussed later) and should be the key factor in your

choice of a guillotine paper cutter.

PRODUCING MORE TO FULFILL MORE ORDERS

When you buy a new guillotine paper cutter either as a replacement

for an older cutter or as your first piece of equipment, there is the

question of what size and other capabilities are needed in light of the

volume and type of business you are doing. You can choose to go with

a smaller, less automated, lower-cost guillotine paper cutter with the

risk of not being able to handle the peaks in demand you have, or you

can choose to purchase a larger, automated, higher-cost guillotine

with all the bells and whistles possible based on over-confidence in the

volume of business and type of work that you can get. In either case,

there is a high risk that you will have made the wrong investment.

The solution is to choose a guillotine from a manufacturer that offers a

selection of sizes and capabilities that allows you to handle your

current business requirements, and yet, provides you machines that

hold their resale values and additional models that provide a pathway

for future growth. Challenge’s broad range of guillotine sizes along

with multiple levels of sophistication in computer controls provides you

with many options to select just the right cutting solution for your

foreseeable business conditions. The investment in a Challenge

guillotine enables you to cope with current demand and to absorb

peaks in production when necessary.

Guillotine Paper Cutters: Maximum Return on Investment

HOW TO ASSESS RETURN ON INVESTMENT FROM

THE VIEWPOINT OF PRODUCTIVITY The ability of a piece of equipment to produce a large volume of cut

pieces should be examined very carefully, not only from the point of

view of the maximum clamp capacity, but also backgauge positioning

and cutting speeds. It is the combination of these factors that

determine the guillotine’s true productivity. There is no point in

having a guillotine that provides a large clamp opening yet positions

the backgauge slowly. Although it is common practice to base an

evaluation solely on one criterion (clamp opening or knife cycles per

minute), the true measure of cutting productivity is the amount of

product that can be cut per hour of continued operation.

Challenge believes that higher productivity requires reliable

technology, readily available and reasonably priced replacement parts

and consumables, and effective technical support to ensure maximum

production.

CUTTING QUALITY - A DECISIVE FACTOR IN RETURN

ON INVESTMENT

Achieving finished cut pieces that consistently conform to the

requirements of the job is of paramount importance. It directly affects

post-press binding and folding operations. If the cuts are done

incorrectly or inaccurately, all the work done previously will be wasted

and scrapped. For instance, the work that was put into printing cannot

be undone or the paper salvaged to be used again. Therefore,

consistent and reliable cut quality must be one of the factors that

dictate your choice in equipment. Beware that many lower cost

machines will not provide the quality your customers demand.

Challenge guillotines are engineered and built to provide cut quality

that is accurate and repeatable.

Guillotine Paper Cutters: Maximum Return on Investment

INCREASING CUTTING PRODUCTION

In today’s economic climate, efficiency is paramount, yet there are still

people clinging to their antiquated guillotines. It is common for shop

owners to report a boost in production of 50% or more when they

replace their non-programmable guillotine with a new Challenge

programmable guillotine, not to mention an increase in consistent cut

quality.

Further production increases can be realized through material-handling

equipment.

A stack lift machine allows the cutter operator to position the material

to be cut at the optimal height which promotes more productive

cutting. This also reduces operator fatigue and injury, saving the

company money with workers compensation savings and reduced lost

time.

The addition of a paper jogger to a high-volume cutting environment

can effectively increase production through the cutting department by

a significant amount. The operator does not waste time loading the

cutter one small lift at a time. Instead, the operator can place a

preset amount into the jogger, depress the foot switch, and the

machine will automatically jog all the sheets properly, and then

remove any trapped air in the stack. The operator is presented with a

full stack that can then be moved effortlessly into the cutter. While

the operator is cutting this stack, the next stack is being prepared in

the jogger.

An automatic unloading machine can automate the task of stacking

finished cut pieces on a skid, allowing the cutter operator to continue

cutting unabated.

Challenge believes that one well thought-out cutting system has the

potential to replace several suboptimal cutters now in operation.

Guillotine Paper Cutters: Maximum Return on Investment

TOTAL COST OF OWNERSHIP - A KEY INDICATOR

FOR MAKING THE RIGHT INVESTMENT DECISION

The calculation of return on investment can be refined by carrying out

a dynamic analysis of all revenues and costs over the projected life of

the machine. The cost of ownership on guillotine paper cutters from

many other manufacturers may increase significantly through the

years; the cutters become unreliable, inaccuracies grow, maintenance

and repair costs skyrocket, and the machines fail to hold their resale

value.

It is therefore particularly important to take all the following costs into

account when developing your return on investment:

• Initial investment cost

• Transportation, installation, and training services

• Recurrent services (maintenance, support, etc.)

• The cost of quality failures (poor cut quality)

• Operating costs (consumables, power consumption, repair and

spare parts)

• Future resale value

Your investment decision should not simply be a matter of initial

purchase cost. A poor-quality machine or one that is not suited for

your production tasks will generate significant supplementary costs

over the life of the machine. Instead of just looking at initial purchase

costs, estimate and compare your projected total cost of ownership.

“Nowadays people know the price of everything and the value of

nothing”- Oscar Wilde

VALUE-ADDED SUPPORT FROM YOUR LOCAL

CHALLENGE AUTHORIZED DEALER

Challenge has been serving the graphic arts industry since 1870.

During those years, we have learned that a skilled network of dealer

sales and service is the best method of having expertise readily

available in the field for purchasers of our equipment.

Challenge dealers have been carefully selected on the basis of their

skills regarding knowledge of our industry and products, customer

relations, integrity, and technical service expertise.

Challenge authorized dealers routinely attend factory-training

seminars, ensuring your new Challenge guillotine paper cutter

performs as-new for years to come. This level of local support will

reduce any potential downtime to the absolute minimum.