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The Smallest Possible Box: On Demand Packaging

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White Paper

The Smallest Possible Box: On Demand Packaging

Introduction
Corrugated packaging continues to have broad appeal among packaging buyers and end-users alike and remains today an environmentally preferable method for product delivery. This type of packaging is versatile, cost-effective, allows for customization, and lends itself to product protection during shipping. The corrugated box also factors into todays economy, with 394.8 billion square feet of corrugated (31.9 million tons of containerboard) produced by U.S. paperboard mills in 2006, according to a Fibre Box Association Annual Report. With environmental impact concerns and process optimization primary considerations for the supply-chain environment, companies are making strides in using the minimum amount of packaging at the lowest possible cost to meet their sustainability goals. Todays leading companies are changing their packaging production lines by deciding to no longer purchase boxes. Although a bit counterintuitive, these companies are finding that the time required to make packaging on-demand is less than the time required to find and move packaging that has been purchased conventionally. These companies have factored the time to plan inventory levels, address stockouts, and manage weekly visits by the corrugated vendor and have found that the time savings are significant. On Demand packaging focuses on a total value perspective: Optimizes processes and packaging material use Achieves a smaller packaging footprint, lower labor costs, less waste, and increased product protection Results in a 20 to 35 percent savings over conventional packaging supply chains

The Virtual Warehouse

In an ideal world, a flow of materials from receiving through warehousing and on to line-side storage bins satisfies production reliably. Box inventories are designed to buffer against spikes and lulls in demand. In reality, the reorder points and run sizes are driven by

forecasting data that is intrinsically flawed so stockouts and obsolete inventory become unavoidable. With an on-demand packaging system, packaging is simplified to a more commoditized formcontinuous corrugated. Technology-enabled box production becomes part of the material flow. The pick list that conventionally helps find the box is used to make the smallest possible box, in less time and with unlimited options for quantity, size, and style. Stockouts and obsolete inventory are eliminated since any box is available anytime and boxes can be made hours or minutes before they are needed. There is no need to plan ahead and reorder points and run sizes are based on actual production demandsnot forecasted demand. Purchasing is simplified as well. Moreover, by using the smallest possible box for every product, space fillers are no longer necessary, and since the fit is perfect, product damage is reduced. According to the Corrugated Packaging Alliance, corrugated packaging represents only 3 percent to 15 percent of a products total environmental impact. As such, it is critical that the product itself is protected from damage and premature disposal.

A Unique Box for Every Product

takt times as short as eight seconds

A one-piece flow application integrates the on-demand system directly into the packaging process and can be designed for mixed-model lines with takt times as short as eight seconds. The on-demand packaging system (which can take up as little as 86 square feet) is moved within a few feet of the pack line and boxes are made, one at a time as the product progresses down the line toward the pack station. On-demand technology integrates data from the production system using the factory ticket barcode or other inputs so that the most current box style and size is made according to the bill of material. In that way, the packaging method can be continuously upgraded and improvements implemented immediately without disposing obsolete inventory. Making the box on-demand as part of the packaging process eliminates guesswork. There is almost no material handling other than replenishing the corrugated at the machine. Designing and implementing the system focuses attention on the process details, wasted movement is stripped away, and best practices are identified and standardized.

Multiple box sizes that work well in theory do not always perform well over time. Consolidating box sizes to reduce part numbers is the most common strategy for creating purchasing leverage. Fewer box sizes result in larger orders for each of the remaining sizes, thereby reducing the price. But when there are hundreds of different products that can be ordered in any combination, order dimensions become completely random. As a result, space fillers are necessary and add additional cost. And, boxes that dont fit properly have higher damage rates that eat-up the savings from consolidating sizes. Todays fulfillment industry generally agrees that with conventional shipping processes, 65 percent has become the standard amount of air shipped. With an on-demand packaging system, the precise box is made as needed, so the fit is perfect and damage is better avoided. And since on-demand system uses only a few widths of continuous corrugated, the raw material part numbers are dramatically reduced as well.

How Much Air?

65 percent has become the standard amount of air shipped

Less Space, Less Cost

Even with the capital cost of the machinery factored into the continuous corrugated price, On Demand Packaging is an inexpensive way to supply boxes. Warehousing programs, just-in-time delivery, and vendor-managed inventory programs all add significant cost to the price per square foot of packaging. On-demand systems eliminate all of these costs. Although there are some basic process flows and equipment configurations that work for multiple customers, in the end, the customers on-demand packaging system is designed to meet their unique requirements. Their return on investment is infinite, and the total cost is usually 20 to 35 percent less than conventional packaging supply chains. # # #

Packsize International LLC is the worlds leading provider of lean packaging systems for businesses with complex corrugated packaging needs. Packsize delivers an alternative to the existing corrugated supply chain with On Demand Packaging, which eliminates the need for large inventories of pre-ordered cardboard boxes, reducing the packaging footprint, and trimming work content required for boxing and shipping. Every Packsize system ever built is still in use today and no customer has ever made the decision to go back to buying boxes conventionally.

For more information about Packsize International LLC and its products, contact Brandon Brooks, VP of Marketing, at brandon.brooks@packsize.com or call 801.944.4814 ext 141. Visit the Web site: www.packsize.com
2011 Packsize is a registered trademark and On Demand Packaging a trademark of Packsize International LLC in the United States and other countries. All other brand and product names are trademarks or registered trademarks of their respective companies.