Retail Chain Dramatically Increases Productivity While Reducing Material Cost by 50%

Executive Summary

FlexPAC worked with a well-known retailer in the kitchen wares space the processes a significant portion of their business from mid-November to the latter part of December.  Due to the shortages of labor, it has been increasingly difficult to staff for this demand.  This retailer takes significant pride in their very low damage rate and the aesthetics for their packaging.  It was important to keep damage low, maintain quality, and keep an environmentally sustainable packaging solution. On average, this client would process 15 packages an hour.  These products would range from extremely fragile (wine glasses) to non-fragile items (aprons). The product mix was vast but it was identified that products could be segmented out in a “Fragile” vs “non-Fragile” way.   FlexPAC’s solution was to propose a piece of equipment that could streamline the packaging process and would now have the capability of processing 300 an hour on the low-end vs 15. The sustainable material would also be 50% more cost effective than the current materials and shipping costs would improve as well.

Challenges

The ability to segment products would need to be done manually.   There would also be size limitations to the products that could run through the equipment so sorting would be critical.  There was already a sortation plan in place but a new line would need to be added.  This new line would have to be a separate flow of these materials outside the traditional pack station line to not confuse and disrupt the existing packaging process.    There would also need to be integration with their existing logistics system to help stream line the shipping label process but an 8 second lag would need to be overcome due to network constraints.

FlexPAC’s Process

It was important to understand the current operation fully before proposing the right solution.  It was identified cold seal could be a viable option but it was important the equipment would work with in the operation.  After doing a thorough two-day analysis on products and the operation it was determined about 25-30% of their products could flow through this new line.  It was decided to be conservative and utilize a 15% number for a return on investment.  FlexPAC proposed the solution and cost-analysis. We would also handle the install and start-up, and the manufacture would be brought in for a thorough training of all staff.  

Results, Returns, and Future Plans

FlexPAC’s solution increased productivity dramatically.  After installation, the 1^st shift supervisor was asked “On a scale of 1-10, how do you like the machine?”  The response was “11”.  The line has the ability to process 20 times more product than a traditional pack station approach.  With the product mix, you’ll never be able to completely automate the packaging line in this client but there is already discussion of another machine for next year.  Regarding the savings on material, it is yet to see the final numbers for this season but in rising material market as we have seen, the savings gains look to be significant.