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Cost Analysis Report

Based on our Nine Parameters of Cost Reduction Analysis, Fidelity Container's team of engineers will conduct a detailed audit of your current packaging operations to determine where cost savings can be achieved. Based on the data collected, we will develop a detailed Cost Analysis Report to illustrate your savings in a variety of areas. This written report includes a description of what was done during the audit, identifies areas for improvement and presents possible solutions. The final results page quantifies the proposed savings in dollars, illustrating the results you can expect from our proposed program.

Cost Area   Current Cost Annualized   Proposal Costs Annualized   Variance
 
Labor Costs
(Current vs. Automation)
  Labor # Labor $ / Ea. Current Cost   Labor # Labor $ / Ea. Current Cost   Proposed Savings
Processors & Material Handling Support   114 $31,000 $3,534,000   24 $31,000 $744,000   $2,790,000
Finished Goods Truck Loading   14 $31,000 $434,000   10 $31,000 $310,000   $124,000
Rack Storage System Labor   20 $31,000 $620,000   18 $31,000 $558,000   $62,000
 
Freight & Loading Costs   # Loads $ per Load Current Cost   # Loads $ per Load Current Cost    
Pallets vs. Slip Sheets   Pallets $40,000   Slip Sheets $14,900   $25,100
Freight   6803 $1,200 $8,163,600   5918 $1,200 $7,101,600   $1,062,000
Forklift Repair (Parts and Labor)       $500,000 *     $378,787 * $121,213
 
Rework       $75,000       $5,000   $70,000
 
Outside Storage                    
Rental       $415,823       $0   $415,823
Freight       $130,000       $0   $130,000
Labor       $7,400       $0   $7,400
 
Packaging Costs   Usage Cost / Ea. Current Cost   Usage Cost / Ea. Current Cost    
Box (Current vs. Redesign)   2638700 $0.850 $2,241,734   3400000 $0.765 $2,599,980   -$358,246
Tape   2663125 $0.032 $85,220   2663125 $0.018 $48,069   $37,151
 
OSHA & NIOSH       $400,000 **     $0 ** $400,000
 
Proposed Savings: $4,486,441

* Based on reduction in forklifts need from 33 to 25

** Reduction in potential for injury, medical, OSHA fines and mandatory investment as a result of reduction in labor force and automation

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