COSTS
Typical Warehouse
For organizations with a complex and shifting mix of box sizes and configurations, we find savings of over 30% are typical. This results from the removal of many steps and processes in the normal supply chain for packaging. There’s an abundance of steps that are normally necessary but provide no value when ordering prefinished boxes. There are machine setups, more material transfers, unitizing and damage prevention, freight, and other things that all inflate the overall cost basis for an order of boxes. When small orders are needed – all of these steps can have a dramatic effect on pricing. Many of these things are not needed or completely eliminated with Box on Demand.
Cost reduction typically is associated with:
Materials:
The unit cost of boxes produced by our systems is constant across all quantities and configurations. Therefore your cost for boxes is predictable across all of your potential requirements. If your environment is a good fit for our systems, the unit cost of ready to feed raw material ($ per square foot of material) can be in order of magnitude less than the equivalent unit cost for a pre-made box.
Inventory (working capital):
Our customers used to have large warehouses, storing boxes that kept multiple truck loads of material. Many of the items in these warehouses sit idle for months or even years waiting to be used. The box warehouse is eliminated when our system is implemented.
Space:
When a production environment is based on producing or shipping a wide spectrum of sizes or configurations, there is a tendency to "have on hand" packaging materials that may be needed. Multiple areas are required to house these materials driving up space utilization for non-value added items.
Time:
Purchasing departments and production supervisors can spend hours per week determining what boxes are needed and when. They have to coordinate this with a supplier at a remote facility creating a slow and complex procurement process. Flexibility and simplicity are introduced with an in-house system. Purchasing typically orders raw material in a simple and predictable fashion. Production does not have to spend time waiting for the correct materials to get to the pack line.
Damage:
Every box produced by our systems is custom-made. Each item produced on the system can be tweaked to the millimeter. Tighter fitting packages provide better protection. The procurement of a simple set of raw materials dramatically reduces the amount of material handling both at the supplier and receiver resulting in less transport damage.
Waste:
We typically see a reduction in the amount of materials not used. Quantity price breaks cause over ordering which increases the amount of obsolescent material. With our system - raw material is never obsolete.
The traditional supply chain for boxes is best-suited for those who buy boxes in batches of over 1000. Because of this, an organization with a variable product mix is forced to carry a much higher inventory in order to keep unit costs manageable and box inventory means that money is tied up in non-productive resources. If a large warehouse of boxes is not an option, expensive vendor-based warehouse and release programs are common and typically add to costs.
With Box on Demand you build only the boxes you need and you pay only for the boxes you build – when you build them.