CASE STUDY No. 9607
KEY WORDS REUSABLE CONTAINERS, CORRUGATED BOXES, PALLETS
Xerox Corporation
800 Phillips Road, Bldg. 205-99P
Webster, NY 14580
Contact: Sal Falcone, Senior Buyer. Tel. 716-422-9815.
Summary
By converting from a system that used many different size one-way shipping containers to one that relies on nine standardized reusable corrugated package sizes, Xerox factories and suppliers worldwide can reuse the same boxes, thus diverting a large volume of corrugated packaging and wooden pallets from disposal and cutting storage and shipping costs.
Action
Xerox Corporation manufactures and sells copiers and other office products worldwide. In recent years, competition has led Xerox to reevaluate operations and costs, including its supplier packaging program. Work began at the Webster, New York, plant. In the past, this facility received component parts from more than 400 suppliers, each part packaged in its own, unique box. This resulted in the use of thousands of different types of boxes and as many as 24 different pallet sizes.
To gain better control, Xerox developed a box reuse program (called the 88p311 Supplier Packaging Program). The company brought together packaging engineers from Xerox and its international suppliers to achieve a consensus on box style. Other participants in the planning process were quality control engineers, buyers, line engineers, assembly line workers, suppliers, and box makers. The program received final approval from senior manufacturing management.
The key features of the system: (1) Nine standard corrugated cardboard box sizes and two standard wooden pallet sizes have been adopted; suppliers are required to use them. A "Supplier Packaging Agreement Form" specifies how parts are to be delivered to Xerox facilities and describes under what circumstances exemptions are allowed. (2) A third-party handler manages the collection, sorting, and reselling of empty containers, eliminating the need to return containers to their point of origin. This is an "open loop" system.
Boxes and pallets can be used at any Xerox facility. They are designed to fit directly into designated positions on the assembly line, compatible with just-in-time delivery. As incoming shipments of parts are received and used, boxes are collapsed and stacked. The company then either reuses them itself to ship parts to other Xerox facilities or repair centers, or it sends boxes to the third-party handlers (one on each coast and one in the Midwest) who sort and resell the boxes to Xerox suppliers.
Payback
Before adopting the new system, Xerox spent over $500,000 a year at Webster to send more than 4 million boxes to landfills. Now, standard boxes can be used for 60% to 80% of all incoming parts, and boxes average eight uses. Box usage has been reduced by 2.4 to 3.2 million units a year; $1.5 million has been saved in pallet disposal costs. Payback was almost immediate.
Additional waste prevented:
All things considered, Xerox estimates that the new packaging program saves its
manufacturing facilities between $2 million and $5 million a year.