Recently I attended a conference where a very good question was posed by a senior cash centre executive; “Do we invest in high speed sorters, or instead invest in several desktop machines that together give the same capacity?”. Having worked around the industry for a number of years and seen both sides of the debate, I believe the balance has shifted decisively in favour of the smaller machines, and here are the three main reasons why:
You may think that the more costly high speed sorters would perform better than desktop machines. Not a bit of it. Advances in technology have enabled features that were unthinkable ten years ago to become commonplace on desktop machines. Full width imaging of the banknote is standard with no belts or rollers obscuring the view. The machines can detect the latest banknote features and, importantly in these days of central bank regulation, they meet and exceed the minimum standards that must be achieved for banknote recycling. Indeed, in many cases desktop sorters are able to perform advanced features thanks to the higher resolutions available – a prime example being the ability to read serial numbers on banknotes with applications in fraud prevention and banknote tracking.
Of course, to state the obvious, a high speed machine is faster than a desktop machine. However, this is where the much lower cost of the desktop sorter comes into play. Just three desktop sorters running at 720 notes per minute can outpace one high speed machine running at 1800 notes per minute, and do so at significantly less than one third of the price.
Even a longstanding area of advantage of the high speed sorter – the ability to strap banknotes on-line – has now been matched. Desktop sorters with on-line strappers are now available from more than one supplier and perform well in high volume operations at CITs and banks.
If you run a commercial cash centre time is money. You need a reliable, consistent production flow as you have a steady inflow of unprocessed cash from retailers and branches, and need to fulfil customer orders such as retail change orders and ATM cassettes. Not only that, you are working under strict SLAs with financial penalties if you fail to deliver. And that’s not to mention the regulatory controls from the Central Bank with strict rules on the total cash you can have on hand as work in progress.
Then your single high speed sorter breaks.
What do you do? You may be lucky enough to have an on-site engineer who fixes the machine within the hour. That’s great but comes at a price (more on that later), and you still lose valuable production time. If you don’t have on-site support you must now wait for a technician to arrive and fix the machine. How long will the machine be down? An hour? Two hours? More?
Contrast that with the operation with three desktop machines (remember that three machines can process more notes per hour than a typical high speed machine). One of your sorters breaks, but you still have 2 left running, allowing you to continue production while the faulty machine is returned to health.
3. Running costs
Perhaps the most important aspect in the purchase decision is the lifetime cost of the system. As previously mentioned desktop machines give you more processing capacity per $ than high speed sorters, but the calculation goes beyond a simple comparison of the relative purchase costs.
Over the life of a machine, maintenance costs are the most significant expense. As we have seen, on-site engineers are required for high speed systems (that is if excessive down time is to be avoided) and this is a significant expense that can easily amount to 15-20% of the equipment cost per year. By contrast the desktop machines do not require this level of cover, not least because multiple systems provide in-built resilience to the workflow. The savings are significant – in one real-life example a customer has reduced the maintenance bill by a staggering 80% by moving to multiple desktop sorters.
But wait a minute, I hear you say… What about labour costs? Surely these are more for the desktop machines as each sorter needs an operator! It’s true that more operators are required for multiple desktop machines but when all costs are considered the increased labour element is more than offset by a lower initial purchase price and on-going maintenance costs. Customers tell me that overall savings can be in the region of 30-40% per year.
In summary I have come to the conclusion that the days of the high speed sorter in commercial cash centres are numbered. Sure, there are some high volume operations where these systems may continue to make sense, but this represents only a small proportion of the market. The majority of cash operations will opt for the smaller desktop sorter as a more flexible option, whose lower lifetime cost enables them to reduce the cost per processed banknote.