Capital planners who budget for the right type of reusable packaging can save their organizations time and money. The price of sewn fabric dunnage is important, but capital planning is about more than just budgeting for new assets. Capital planners also need to account for maintenance, cleaning, and replacement costs. That’s why paying more for reusable packaging up-front can provide a significant long-term savings in industries such as automotive, aerospace, heavy truck, and power sports.
When engineering departments submit their budget requests, however, some finance departments don’t ask enough questions – or question some basic assumptions. That’s where capital planners can add value through due diligence. By asking the right questions, capital planners can discover the true costs of new and replacement dunnage. This supports greater accuracy in budgeting and can lead to reduced costs over the long term. There are several basic areas that planners need to consider.
What is the expected life of the sewn fabric dunnage that your packaging engineers say that they need? If engineering asks for packaging that lasts for 24 months, find out how much it would cost to buy dunnage that lasts for 72 or even 80 months. You’ll pay more up-front, but what if your rack bags last 100% longer? Eventually, you’ll cut your capital expenses in half.
Are your packaging engineers asking for rack bags that are reliable enough? Lower-quality packaging can cost less, but you’ll have to carry a larger number of spares. Plus, if sewn fabric dunnage fails in the field, what’s the cost of downtime? After all, assemblers can’t do their jobs if they don’t have the parts they need. Inadequate protection for Class A surfaces can also lead to damaged parts and lost dollars.
Maintenance and Cleaning
What are the maintenance and cleaning costs for the reusable packaging that your engineers want to buy? Recyclable packaging that’s made of lower-quality materials costs less, but some fabrics and plastics won’t withstand water, sunlight, or outdoor temperatures for very long. Dunnage that gets wet and dirty can also become moldy. Rack bags that aren’t ruined can be repaired or cleaned, but there’s always a cost.
Disposal and Replacement
How much will it cost to dispose of and replace the rack bags that your engineers want? Remember that disposal costs include breakdown, hauling, and landfilling. Packaging that’s built to last for 24 months may not experience major price hikes, but there are no guarantee that you’ll pay the same amount in two years. Without price stability, future capital planning could be even more challenging.
Vendor Selection for Capital Planners
Finally, which fabric dunnage supplier will provide your organization’s reusable packaging? Unless the selected vendor is a value-added manufacturer, your engineers may not get the design assistance and help with material selection that they need. To learn more about the questions that capital planners need to ask – and which supplier of sewn fabric dunnage can help – contact Hold-True.