A $1,050 purchase of reusable corrugated boxes and unique box-closing devices has saved industrial manufacturer Belimo USA more than $106,000 a year in a closed-loop transportation program with two of its vendors of metal parts. The low-tech solution also complements Belimo’s reputation as a clean technology company focused on lean manufacturing principles.
Belimo produces parts and assemblies for heating, ventilation and air conditioning (HVAC) systems. HVAC actuators, control valve systems and sensors are assembled in its Danbury, CT, plant, and comprise the company’s core business.
The company’s manufacturing engineer, Michael Gallo, found a cost-effective and environmentally friendly way to transport parts from vendors in Waukesha, WI, and Rochester, NY, to Belimo’s Danbury assembly plant.
About a year ago, Gallo implemented this closed-loop shipping program that:
• Allows the company to reuse corrugated boxes at least 10 times and, perhaps, 20 or more;
• Saves time, logistics labor, materials costs and expensive floor space; and
• Cuts its carbon footprint by replacing petroleum-based plastic totes with renewable corrugated boxes, significantly lowering the weight of empty containers during reverse transportation by 820 pounds.
Integral to the program is the Box Latch from Eco-Latch Systems, an alternative to box sealing tape, staples or bands. These reusable box-closing latches enable Belimo to present its parts to product assemblers directly from corrugated boxes coming from its vendors. Previously, parts were shipped in heavy wooden crates and had to be manually transferred to plastic totes for delivery to the assembly line.
The reusable Box Latch attaches easily to major flaps, keeping the boxes closed during shipping but allowing for easy, no-tool opening of them—eliminating the human injury dangers that occur with tape-cutting knives.
A Certified B Corp., Eco-Latch Systems produces a variety of sizes of Box Latch to match the application. The Box Latch works by clipping on or sliding onto the major flaps of a box to hold them closed. Watch a demonstration here.
Inside the numbers
Here is an accounting of the savings from one actuator part involved in Belimo’s closed-loop logistics solution:
Instead of spending $15,000 to buy new wooden crates, in the summer of 2016, Belimo spent $550 on BL Medium latches and approximately $500 on custom-designed partitions to place in existing boxes—for container savings of $13,950.
The number of pallets shipped has been cut in half because each pallet of lighter-weight partitioned boxes now holds twice as many parts as a pallet of the heavier wooden crates. With 80 shipments per year between the Wisconsin and Connecticut facilities, the annual freight savings is $75,670.
On the return trip, a pallet of 20 empty wooden crates weighed 1,000 pounds. Now, a pallet of 32 empty partitioned boxes weighs just 180 pounds—for a savings of 820 pounds or $17,030 per year in freight costs.
Here is how the cost savings add up so far: $13,950 + $75,670 + $17,030 = $106,650.
But savings apply to floor space, too: Previously, a single wooden crate held 120 pieces of the actuator part, so it required 20 crates to ship 2,400 parts. Now, a reusable corrugated partitioned box holds 80 parts and 32 of these boxes fit in the same space on the plant floor as 20 crates—yet hold 2,560 parts.
Pallets now hold more product parts and take up less floorspace than the previous wooden crates.
Moving forward, because this closed-loop partnership has been so successful, Belimo expects it to be the template for the future. Gallo says, “It’s simple. We will tell future suppliers that this is the closed-loop, re-usable box system we use with our suppliers and we expect any new vendors to comply with it.”
In September 2017, Belimo USA expanded its lean manufacturing practices with the purchase of another 2,500 Box Latches (BL Large, this time) to use with shippers for other parts. The company is now using reusable boxes and Box Latches with five different parts produced by two different suppliers: Wisconsin Metal Parts in Waukesha, WI, and Alton Manufacturing in Rochester, NY.
Additionally, Box Latches are also being used within Belimo’s internal closed-loop manufacturing and product assembly process in other sectors of its Danbury plant.
To recap, Belimo has realized significant savings from implementing a closed-loop logistics program by:
• Repurposing and re-using boxes that otherwise would be sent to recycling.
• Extending the lives of high-quality corrugated boxes.
• Reducing and/or eliminating tape on shipments from vendors in Waukesha, WI, and Rochester, NY, to the assembly plant in Danbury, CT—as well as on returns in this closed loop.
• Lowering transportation and environmental impact costs by replacing heavy, space-wasting, double-high, wooden crates with lightweight, partitioned corrugate boxes transported between locations via shrink-wrapped pallets.
• Minimizing valuable floor space on the assembly floor that now is available for other uses, including more assembly cells for greater product output.
• Reducing time and motion loading parts and boxes more efficiently at assembly cells while also reducing touch points during the assembly process, a factor much appreciated by the material handlers and assemblers.
• Cutting the carbon imprint as petroleum-based plastic totes within the company’s manufacturing and assembly process are replaced with reusable corrugate boxes.
• Curbing dunnage costs for removal of boxes previously recycled after one use.
These are highlights from a more detailed case study produced by Box Latch. Read that full story here.
As a result of his innovative cost-cutting, environmentally friendly efforts, Michael Gallo received a coveted "Above and Beyond Award" from Belimo in December 2017 for Solution Leadership. This award was for the freight cost savings described in the article.
Production efficiencies, ecommerce challenges, sustainability trends, new bioplastic technologies and more are among the topics on the agenda at EastPack 2018 (June 12-14; New York City). This free educational program will have more than 16 hours of can’t-miss presentations and demonstrations. Register to attend today!