Control the profit and cost of corrugated board

I believe many manufacturers of corrugated cardboard are asking, “The equipment has been improved and the production capacity has been increased. Why are we still unable to make any money?” Is the market downturn or the competition between peers for price cuts? But no matter what kind of factors, in fact, everyone's psychology is also very clear. In the past, the era of high profit has ceased to exist. In addition to the current business operations, the most important thing is to fight management. cost. In the past, every salesman may have to learn the company's quotation formula: cost + profit = selling price, but now the market's operating rules are: price - cost = profit.
The selling price is in the hands of customers. With so many competitors, you can often decide not only the price but the “whether or not to do it”. If you don’t do it, you can only wait for death. If you do it, you don’t necessarily have to make a profit. That is to say, if cost control is not good, profits may also be negative. It can be seen that cost control is undoubtedly the biggest problem in determining the survival of a company.
At present, there is a trend in the corrugated paper packaging industry that the greater the equipment size, the higher the production capacity. Everyone wants to share fixed costs by boosting production capacity, and accumulate profits through production. For example, if one thousand tons were used each month, you can earn one million, and now you can rely on two thousand tons to maintain one hundred per month. Million profit. Basically, this idea is not wrong, but everyone has overlooked the question: In order to increase the cost of equipment invested in production capacity, and whether the increase in raw material costs and the increase in liquidity after the increase in production capacity really helped the company? Thoughtful questions. Moreover, the relative high loss of production capacity is great, and if there is no good management tool, the result is still the same - no money.
The cost of spreading corrugated board, raw materials (fabric and corrugated paper) accounted for more than 70%, in several highly competitive coastal areas also climbed to nearly 80%, other fixed costs accounted for only about 20%. This shows that improving the cost of raw materials is the key to truly controlling profits. So, how to effectively reduce the cost of raw materials? The following provides several common practices for the industry:
Cash to buy paper - cash transactions down the price of raw materials, but the large demand for cash, the current return of funds to be calculated in 3 months, three times the turnover of financial pressure is considerable.
Buying papers in large amounts—the purchase price reduces the price of raw materials at the end, the same high demand for funds, and high inventory pressure. In the event of raw material prices fluctuating, winning or losing is more powerful than selling cardboard cartons, which is a bit like buying goods. Po is very risky to use alternative materials - say 125 grade A paper instead of 175 grade B paper, to achieve the same purpose in the physical pointer measurement, but the raw materials used may be less expensive. The degree of acceptance also tests the intelligence of the vendors.
Controlling on production equipment - Effective control of existing equipment, such as the use of a computer production management system to save on the use of raw materials, control of paste volume and control of temperature, etc., with little investment but savings The money is at least 3%-5% more than the manual labor.
Below we will analyze the cost-effectiveness of this part.
We have compared the differences in the customer's production management system several times before and we have found some interesting phenomena.
For example: ask the boss before installing the machine.
Q: What is the average speed? A: About 100 meters/minute Q: How high is the board machine loss? A: About 4%-5%
The first three days after installation, the actual calculation by the computer is:
Average speed: 45 meters/minute The loss of board machine is about 8%-12%
After the first month of installation, the computer's actual calculation:
The average speed of 60 meters per minute board machine loss is about 6%
Decrease of starch use by 10%
Two months after installation, the computer's actual calculation:
The average speed of 80 meters / minute board machine loss is about 3.5%
Starch use decreased by 15-20%
This is a real case, it shows that people's feelings and actual information are greatly different. For example, the operator only sees the normal normal speed reaching 100 meters/minute, but ignores how much parking time is stopped and ignores how much bad paper is made. In fact, the real production capacity can only reach:
Average speed = good length / (production time + parking time)
In addition, the meaning of “bad products” does not mean only those papers that are really bad. For most paperboard suppliers, doing more than that does not mean that there is money, but the cost loss and productivity. reduce.
The company's various production management products are numerous, and how to choose, the focus is not only on the price comparison, but how to accurately achieve the purpose of raw material savings, especially the accuracy of paper change, good can be controlled at about 1 meter The bad error can be as high as 20–30 meters! In addition, providing a computer automatically according to the paper, the speed to control the amount of paste, so that at high speed can automatically reduce the paste gap, and the low speed operation will increase the amount of appropriate amount of paste, so as to save at least 15% The amount of paste, and also, for the temperature control part, but also by the computer to automatically adjust the baking area of ​​the preheated cylinder according to the paper and speed, to ensure the hardness of the cardboard, etc...
In short, the law of market competition is - the survival of the fittest, the elimination of the unfit, and whether you are smart bosses ready?
As for other issues concerning production management, due to the space relationship, we will not repeat them here. Welcome to call us.