In order to distribute a rapidly growing volume of cell phone orders generated over the busy weekend selling period, an international logistics company used expensive manual labor on Sundays to erect and bottom seal cases so that they could pack and ship phone orders on Monday.
Scrambling to erect the cases on Sunday added labor costs (extra hours and expensive overtime pay), increased inefficiencies on the shipping floor (employees who didn’t normally do case erecting were used to speed up the process), resulted in too many poorly built cases, and made for an uneven production schedule, with lots of batch orders resulting in peaks and valleys of cases that needed erecting. The rushed atmosphere of the Sunday case erecting sessions also often left cases haphazardly strewn about the warehouse. Cases cluttered walkways as the packing stations quickly overflowed with erected cases waiting for packing and distribution.
The big issue for the customer, however, was how to reduce the labor cost while also increasing the quality of cases and the subsequent shipped pallet loads. Additional concerns revolved around the inconsistent case quality and number of cases that were made with non-square corners.
Why Square Cases Matter
Non-square case corners can contribute to shipping load damage. Square cases are easier to pack, stack, store, and ship. Up to 30% of the stacking strength is lost when case sides are not square and vertically aligned. If using a case retrieval system, square cases reduce processing time and any issues. Square cases are easier to handle and don't cause issues when the shipping pallet is wrapped.
Erecting a case by hand is, ideally, a job that requires three hands. Two hands would erect the case and then hold it so it is square. The third hand then tapes the bottom flaps closed. Without the third hand, keeping the case square with one hand while operating a tape dispenser with the other leads to variations.
While it is not uncommon for operations with small volume to utilize a temporary workers to erect cases, in the example above the consistent weekend demand was exponentially greater than week day demand. This meant that orders packaged on Sundays suffered from poorer quality cases, and also were more expensive.
Case Erectors Are the Solution
Deciding if a case erector makes financial sense can sometimes be a complicated process. Purchasers need to weigh the volume and cost of manual erecting against the advantages of a case erecting. In the example above however, an automatic case erecting machine turned out to be an effective solution to both the cost and quality problems.
The new case erector easily kept pace with order requirements. Changeovers to handle various case sizes for different pack configurations also proved to be quick and easy. The machine provides sufficient labor savings to justify automation of the case erecting process.
Using expensive Sunday labor, the average cost per case to hand erect and bottom seal cases was 6.7 cents. After eliminating the cost of doing the same number of cases using the new case erector, as well as factoring in the labor required to make the frequent changeovers and keep the magazine replenished, the average cost dropped dramatically to 1.5 cents per case. A 77 percent reduction!
The annualized return on capital, based on saving more than 5 cents per case every day, exceeded the company’s purchase justification threshold.
“The case erector is always going to be there working. It's faster and cheaper than manual labor with high case quality.” Production Engineer, International Logistics Company.
This post was published on July 19, 2016 and updated on November 2, 2018.