Financial Metric
Financial calculations determine the total monetary loss resulting from material wasted during the supply chain and converting processes. The landed cost yield loss accounts for the purchase price and freight charges of the damaged or scrapped paperboard from the mill to the finished package. This metric is used by purchasing managers to evaluate the true cost of cheaper raw materials that suffer higher waste rates.
Material Flow
Waste occurs at multiple stages, including transit damage, setup sheets during printing, trim waste during die-cutting and rejected finished boxes on the folding line. When a roll of board is damaged during unloading, the loss includes not only the raw material cost but also the transport and handling fees incurred to bring it to the plant. Calculating the yield loss based on the landed cost reveals that a low-cost board with high waste can be more expensive than a high-quality, low-waste board.
This analysis helps in selecting suppliers who offer better packaging and consistent board quality.
Process Optimization
By tracking this metric across different print runs, converters can identify which board grades cause the most machine stoppages and scrap. Reducing the waste percentage directly improves the profit margin of the packaging operation.