30 March 2016 //
In selecting secondary packaging methods, or identifying opportunities for improvement of current processes, the cost of getting materials to the point of use are of significant concern. However, it’s often only the “hard” costs of supplying those materials that are considered when determining what methods to use, despite the impact “soft” costs may have on the bottom line.
Hard costs are relatively easy to identify, and include:
Purchase Cost of the Materials
This is the most obvious cost and, understandably, the one that gets the most attention when looking at new secondary packaging methods or identifying areas for cost reduction. It’s important to note that, regardless of secondary packaging medium, there are several fundamental ways to save money on materials such as identifying new suppliers, down gauging, consolidating sizes for volume discounts and exploring new technologies.
While this area offers an obvious opportunity to control costs, shipping is not always fully considered when selecting new packaging technologies that may use materials with limited sources and availability. If, for example, the required materials are new to the U.S. market and only available overseas, the cost of importing them could substantially drive up shipping costs and negate the efficiencies of the packaging technologies.
Yield or Scrap Factor
To illustrate this point, think about Vertical Form Fill & Seal (VFFS) versus pre-made on flexible packaging. VFFS appears to have a very attractive cost per package on paper, but real world conditions involving frequent changeovers can impact those numbers dramatically. The same holds true in secondary packaging, where pre-printed secondary packaging materials (whether corrugated shippers or printed flexible films) are weighed against a more generic packaging material in combination with print-and-apply labels.
On the other hand, soft costs are more difficult to anticipate and are typically application specific:
Secondary Packaging Material Storage
While the actual application will dictate the ratio, there’s an industry average of 8:1 for the material volume of rigid versus flexible secondary packaging materials – that is, the use of a rigid secondary packaging requires eight pallets of material to every one pallet used for flexible secondary packaging. This has significant implications for in-plant space planning as packaging materials often “steal” available space from work in process or finished goods.
Replenishment Cycle Times
As a result of the standard 8:1 secondary packaging volume ratio, applications that use rigid secondary packaging materials such as corrugated master shippers/cases will always have significantly shorter replenishment cycle times compared to flexible materials. The simplest example of this would be a case packer versus a shrink bundler. While the case packer requires constant monitoring and operator resources to feed cases to a magazine (usually measured in minutes), a shrink bundler runs for many hours between material replenishment.
Safety understandably receives a lot of attention in selection of secondary packaging equipment and/or suppliers, but the safety aspects of providing the materials to a secondary packaging process are often overlooked. A logical safety mitigation strategy focuses first on completely eliminating a hazard and, if that’s not possible, reducing frequency to the lowest possible level. Any time packaging materials are received, stored, moved or loaded to a secondary packaging system there is risk, so anything that can be done to reduce the volume of materials and frequency of interaction with a machine will have a positive effect.
Market/customer demand, budget and floor space considerations all affect secondary packaging projects, and are typically the priorities in secondary packaging. However, the cost of getting secondary packaging materials to the point of use presents practical considerations that need to be added to the mix.
Aligning secondary packaging costs with your needs requires a big picture strategy, and working with the experts at EDL. Contact us today to review your packaging efficiencies.