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Packaging costs for Cabinet Makers

How to calculate your packaging costs?

Here is the real issue ‘’Have you ever calculated the packaging cost for a single item?’’

Machine investment, material cost, electricity and labour are the key factors to consider.

Defining the percentage of the material cost vs labour?

Defining the percentage of the material cost vs labour?

Actually, this is very easy to calculate. Consider a period of one week or one month to have a more precise value. How many people are working in the end line or for the packaging? Or you can consider the manhour x hourly cost and divide by the material cost and get a ratio.

Example Calculation for a Door Manufacturer

Daily Manufacturing: 100 doors per day

CORRUGATED BOARD

BOX COST 1,5 USD

MANUFACTURING WAGE (Hourly cost 20 USD PER WORKER)

BOARD COST PLUS LABOUR

15 Doors Per hour

Cost Per Door (4,2 USD/DOOR)

SHRINK WRAP PACKAGING

APROXIMATE INVESTMENT: 70.000-100.000 USD

FOR A 15 YEARS OF USEFUL LIFE AMORTIZATION AND MONTHLY COST OF THE MACHINE 670 USD/month

Electricity and Maintenance Cost 400-800 USD/ Month

Shrink Film Per Door: 0,5 USD

2 PEOPLE

25 DOORS PER HOUR

TOTAL: 1,6 USD + 0,3 USD-0,5 USD + 0,5 USD

TOTAL: 2,4 USD -2,6 USD

Cost per door: 2,4 USD -2,6 USD

ONLY STRETCH FILM AND MANUAL WRAPPING

STRETCH FILM COST APROXIMATELY 30m length per door. (0,3 USD/ DOOR) %50 More Stretch Consumption than a machine wrap because of manual work and the manually prestretch is not possible.

3-4 people

15 DOORS PER HOUR

Cost Per Door (4,50-6,00 USD)

HORIZONTAL STRETCH FILM WRAPPING COST

MACHINE INVESTMENT 25.000USD- 50.000USD WITH THE OPTION OF WELDING UNIT

FOR A 15 YEARS OF USEFUL LIFE AMORTIZATION AND MONTHLY COST OF THE MACHINE 170-250 USD/month

Electricity and Maintenance 100-200 USD/ month

40-60 DOORS PER HOUR AVARAGE IS 50 DOORS

2 PEOPLE (20 USD/HOUR X2) hourly wage

STRETCH FILM COST 20 meters per door. (23 microns) 0,3 USD/ per door

TOTAL: 0,8 USD+0,05-0,1USD+0,3 USD

TOTAL: 1,2 USD/ DOOR

AIR BUBBLE PACKAGING AND SRETCH FILM WRAPPING TOGETHER

AIR BUBLE COST APROXIMATION 0,8 USD PER DOOR

TOTAL: 2,0 USD/ Door

CONCLUSION

You can save up to 3-4 USD per door with a orbital stretch wrapping machine. For a calculation of 7000 doors manufacturing yearly you save 20.000 USD to 28.000USD. These calculations are very roughly. Here the important key factor is the labour and the electricity consumption although many others may think that the initial investment is the most important. We can easily have the conclusion that for those who are packing more than 40 doors or sets per day can save minimum 10.000 USD yearly.