Plus Group’s Process Plus completes Packaging BVOA studies for new $1.0B State-of-the-Art manufacturing facility.

The client requested that Process Plus perform a full Best Value Option Analysis study for their new $1 Billion cosmetics manufacturing facility to compare multiple packaging options regarding cost and environmental sustainability. Upon completion of the BVOA studies, Process Plus recommended the best value alternative approaches, resulting in annualized potential savings of $71MM and annual CO2 reduction of 9.85 x 108 kg.

Process Plus compared the value of the existing operation to alternative solutions focused on these areas: Pallet stabilization, shipper sealing method, base country volume over-labeling, carrier packaging methodology, shipper packaging methodology, kitting methodology, and pallet load height modifications.

A tracking document was shared weekly with the client team to illustrates the earned value progress on each proposal compared to the burn rate of the study’s budget to ensure that each study was completed on time and within budget. In addition, all documentation, including PFD’s, BVOA documents, and cost analysis reports were provided for each activity to serve as evidence that the proposed recommendation is the best option among all feasible alternatives.

It was suggested that our client automate their kitting process in-house rather than outsource to an overseas manufacturer, which would reduce costs by $26MM after the first year. Automating the shipper packing process would eliminate CO2 emissions by 9.6 x 108 kg and nearly $6MM in labor as our client spends approximately $12.8M to pack each individual case manually. After consulting with an automation machine designer, the upfront cost for the automated redesign was $14.6MM with a reoccurring yearly cost of $4.2MM and  would reduce CO2 emissions by 9.6 x 108 kg, which has a sustainability impact of 26%.

Process Plus reviewed the client’s existing incoming primary component pallet and load density at 54” height capacity and evaluated the cost of increasing cube density to maximize the total volume of the shipping container/truck. This change would greatly reduce shipping containers and trucks, leading to anticipated savings of $36.9MM in transportation costs. The existing 1371mm (54”) pallets cost $88.7MM to ship annually, while optimizing the load height to 1200mm per Unit Load (47.25”) would cost a compared $51.8MM.

TOTAL PROJECT CAPITAL: $205k

Studies Analyzed:

  • Pallet stabilization: Adhesive vs. Stretch Film vs Combination
  • Shipper sealing method: Hot Melt Glue vs. Tape
  • Base Country Volume Over-labeling: On F&A Line vs. Travel Retail & Local Affiliates
  • Carrier packaging methodology: Redesign carrier to automate packing vs. Manual packing
  • Shipper packaging methodology: Redesign shipper to automate packing vs. Manual packing
  • Kitting methodology: Automated kitting vs. Outsourced manual kitting

 

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