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
