A worldwide elevator manufacturer needed to drive improvements throughout its operations, and a supply chain optimization project was implemented to generate cost savings through a simplified, more efficient packaging system.
The motivation for the project arose from a pending new product introduction with a lower price point — a low-cost, low-rise basic elevator concept. But these lower costs meant tighter margins. Looking for a way to bring delivery costs down, the manufacturer turned to NTT DATA’s packaging optimization experts for help.
The new elevator product was just part of the challenge; elevator installers are among the world’s highest-paid labor unions, so the company needed to minimize labor time. The company worked with NTT DATA to develop sequential packing, which dissects elevator assembly steps and reduces them into packaged crates, to address these high labor costs.
Unfortunately, rising lumber prices caused a 10% increase in material costs for the company in less than a year, so it needed to find savings fast.
- Increases crate density by 12%
- Standardizes pack-out configurations
- Unlocks downstream efficiencies
NTT DATA identified three primary ways to achieve savings and efficiencies: value engineering, standardizing the existing crate packaging and enhancing the sequential packing of crates. The NTT DATA team quickly recognized the company’s crates were over-engineered, so the team used tools, software and expertise to implement new designs. Packaging data revealed the client had 78 different crate part numbers; NTT DATA reduced it to 22. The 72% reduction led to more standard pack-out configurations for high-volume elevator products and unlocked downstream efficiencies.
The new design optimization was simple: reduce overall material, standardize wood dimensions and simplify crate assembly to reduce material and labor costs. The result: the company saved 13%, or $1.1 million in material costs.
Sequential packaging enhancements
Onsite workshops helped company’s team master sequential pack-outs by right-sizing and reducing the crate count per job — resulting in an average crate density increase of 12%, an average cube reduction of 8% and an annual cost reduction of $500,000.
The sequential packing improvements also shaved one day off installation and saving millions in labor costs. The new pack-outs now fit on one flatbed trailer instead of two, eliminating the need for a second delivery for all traction elevators with ten landings or fewer.
The project generated sustainability advantages from its packaging optimization efforts, eliminating 250,000 board feet and saving 52,000 trees every year. The sequential packing system took more trucks off the road by eliminating a second trailer for 90% of low-rise traction elevator deliveries. Less driving, fewer drivers and reduced material resulted in significant labor savings and reduced carbon output.
About this case study
A worldwide elevator manufacturer drives savings and efficiencies with NTT DATA’s Packaging Optimization service.