Analyzing the cost of corrugated boxes

Amine asks,

I would like to analyze the spend I have to my corrugated box suppliers across more than 1000 type of references.

I got the specifications for the references ( type of box ( Fefco, RSC, etc),fluting, the dimensions, the different liners and their Gsm, MOQ, volumes, etc).

I have calculated the area of each reference and the weight of each box. Then, I have calculated the price per sqm and the price per gram.

From there I would like to understand the cost drivers that influence the prices and identify the references that are priced too high.

How would you proceed?

Ultimately every corrugated shipping container is made to a physical and graphic specification that can endure the distribution environment. Since you are an international company shipping from and through different systems your analysis becomes very difficult to evaluate. Universally we must look to the minimum compression strength necessary to survive transport. This is best determined by ISTA testing protocols.

What you really need is to determine cost to strength ratios. Containerboard is a global commodity and yet strength to gsm ratios vary greatly.

There are differences between virgin and recycled fibre costs. Secondary fibre prices have been falling, but both products are often traded in the same range. You would also have to look to the financial returns of publicly traded companies to ascertain their margins over time. It is considered a very supply and demand driven packaging system.

Of course, order size and frequency of order can play a large part in the final cost of a box as well. The finish of the box is another thing you need to take into consideration. Are they all one-color boxes, or are they two, three, four or more colors.

The manufacturing regions can affect the product price. Material prices and manufacturing costs can vary—sometimes significantly—from one region/market to another.

Here are links to a couple documents that you might also find helpful.

How Does One Relate ECT and Basis Weight2

Selecting Components to Engineer a 44# ECT Corrugated Structure Combining For Strength with the Least Cost Containerboards

—Ralph

 

UPDATE:

Vann comments,

Amine, I recommend that you have some performance testing of your boxes that relates to your various applications.  I think that this could help you rationalize your supply of boxes with the objective of reducing the very large number of different boxes but still cover the critical needs of each of the applications. In other words, find out what current boxes can handle multiple applications in order to reduce the number of different boxes.


%d bloggers like this: