Custom Packaging Saved Manufacturer over $100K

Custom Packaging Saved Manufacturer over $100K

When companies aim to cut shipping and packaging costs, the first place many managers consider is cheaper materials. In a Lean-focused culture, though, better solutions usually exist without compromising on quality. A less obvious route is custom packaging. This kind of investment can appear to add costs, but as one HVAC controls manufacturer found, customization yielded a huge savings – both in annual costs and carbon footprint.

The fully story of Belimo’s success is detailed in Packaging Digest’s “Reusable boxes save HVAC controls manufacturer $106,000” by Lisa McTigue Pierce. Some highlights to consider:

Quick Background

Belimo makes parts and assemblies for HVACs. Prior to the conversion, parts were shipped in heavy wooden crates and manually transferred to plastic totes for assembly line delivery. New wooden crates cost $15,000.

Rather than buying the new crates, Belimo instead invested in latches and custom partitions to transform their existing boxes into reusable containers. This particular customization cost $1500, giving the company an up-front savings of $13,950.

Key Factor

An integral piece of the conversion is a closed-loop shipping program that Belimo’s manufacturing engineer, Michael Gallo, implemented.  It is a key element of many models for reusable packaging.

The program has worked fantastically well for the company. McTigue Pierce writes:

“Moving forward, because this closed-loop partnership has been so successful, Belimo expects it to be the template for the future. Gallo says, ‘It’s simple. We will tell future suppliers that this is the closed-loop, re-usable box system we use with our suppliers and we expect any new vendors to comply with it.’”

How the Savings Add Up

The overall benefits merely began at the initial investment and decision to try a closed-loop system. McTigue Pierce captures the full picture of everything that improved with the new system:

“The number of pallets shipped has been cut in half because each pallet of lighter-weight partitioned boxes now holds twice as many parts as a pallet of the heavier wooden crates. With 80 shipments per year between the Wisconsin and Connecticut facilities, the annual freight savings is $75,670.

“On the return trip, a pallet of 20 empty wooden crates weighed 1,000 pounds. Now, a pallet of 32 empty partitioned boxes weighs just 180 pounds—for a savings of 820 pounds or $17,030 per year in freight costs.

“Here is how the cost savings add up so far: $13,950 + $75,670 + $17,030 = $106,650.

“But savings apply to floor space, too: Previously, a single wooden crate held 120 pieces of the actuator part, so it required 20 crates to ship 2,400 parts. Now, a reusable corrugated partitioned box holds 80 parts and 32 of these boxes fit in the same space on the plant floor as 20 crates—yet hold 2,560 parts.”

Is it for You?

Latches and partitions aren’t the only way to customize a container to optimize space, weight, and reusability. Additionally, the above rewards aren’t the only benefits you could enjoy with customization. For example, custom packaging for fragile products would also improve damage control, which would save companies costs in replacing goods and maintaining strong customer relations.

If you’re curious about customization or reusability in general, talk to Packnet. We’re experts at designing packaging solutions that improve long-term costs. Call us at 952.944.9124 or simply request a free assessment. We’re honest about what you can expect from us and our solutions.

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