A simple, yet ingenious, innovation that allows for reuse of corrugated shippers with partitions for auto parts suppliers helps save Yanfeng Automotive Interiors $10 million over 24 months.
If you were to ask someone outside of packaging what the industry is all about, most likely you’d get a response such as, “It’s something about boxes.” But industry insiders know that packaging is a vast, complex, technology-driven business that touches consumers’ lives every day. In this environment, even the most mundane-looking box may be the result of careful engineering and innovation that imparts greater performance, functionality, and sustainability.
Such is the case with the P2 returnable corrugated shipping case for the automotive industry, designed by Rudy Youell, formerly President of American Corrugated Products and now CEO & President of P2 Packaging. The P2 shipper uses custom-designed partitions for auto parts and can be easily collapsed for return and reuse. It’s a simple concept, yet it’s one that has saved customers in the auto industry millions of dollars.
Yanfeng Automotive Interiors is one of the beneficiaries of these savings. The Chinese-owned global automotive supplier of interior trim components, with U.S. headquarters in Novi, Mich., has been using P2 packaging for six years—first as a one-way shipper, and beginning in 2019, as a reusable box. According to David Colclough, Senior Buyer – North American Packaging for Yanfeng, after just 24 months, the company saved $10 million by reusing the shippers.
The cost savings are the result of a number of factors, mostly stemming from the increased number of parts that can be shipped in each custom container and the reuse of the box. But there are many other soft-cost savings, including improved stack strength and ease of use, more efficient warehousing, and greater sustainability.
“In the 30 years I’ve been involved with automotive packaging, nothing has moved the needle like the P2 concept,” says Colclough. “If I can save Yanfeng $10 million across a dozen programs, I’m certain the P2 would save a large OEM like Ford or Tesla $100 million or more. If implemented across the entire automotive industry, the P2 could easily save a billion dollars.”
DESIGNING AN OPTIMIZED SHIPPER
The idea for the P2 came to Youell during his time at American Corrugated Products, a business he started with his father in 1983 and sold in 2016. The company’s customer base was the automotive industry, an industry Youell says is very competitive. “They would constantly insist on cost savings and price concessions from their suppliers,” he says. “The P2 was a way to help save our customers money without eroding our margins. The increased container density was our main focus initially, but the concept has now evolved into a semi-returnable design that can be reused, in many cases over 10 times each. This is saving our customers millions, and the positive impact on the environment is astonishing.”
Traditionally, auto parts suppliers use an expendable corrugated box with a separate, slotted partition inside to ship parts. There are several drawbacks to this design. First, when the partitions are created for the cases, they have tabs at the end of each divider, which create what are referred to as air cells. The air cells consist of open space around the entire inside wall of the box. This reduces the number of parts that can fit in each case. “You have to have the air cells to hold the partition together,” Youell explains. “A lot of times you could eliminate the tabs, but then the partitions kind of wobble.”
Wasted space is also many times found at the top of the box. “They [auto parts suppliers] put the parts in boxes where, if the part is 12 inches deep, the case will be 16 inches deep,” says Youell. “If you ask them why, it’s because they only want to have certain box sizes in their plant. There’s just so much wasted space in the current automotive supply chain, it’s ridiculous.”
Another drawback of the traditional shipper used by auto parts suppliers is that it’s single-use. Until the P2, the only other option for a returnable container for these components was a rigid plastic tote. Explains Colclough, “Rarely does it make sense to use returnable containers for shipping parts that distance [for Yanfeng, parts come from Mexico] because of the freight cost, which is $4,000-plus for a truck from Michigan to Mexico. The beauty of a P2 design is that it can be collapsed and returned for reuse, in some cases over 10 times. The return ratio is approximately 13:1, which is considerably better than anything else I’m aware of.”
While the idea for the shipper, in hindsight, seems like a no-brainer, Youell did encounter challenges during the project. One was finding a robust enough design that could actually be used multiple times. Another was designing it for ease of use, so that the box could be collapsed with minimal effort.
With the P2, the partitions are glued directly to the box. This eliminates the air cells, allowing for more items per box, and it also provides the case with greater strength, as the partition creates a corner post-type structure along the side of every cell. According to Youell, P2 Packaging is actually able to use material with a lower weight than is traditionally used for a standard shipper.
The P2 system is available in four configurations: the partition only, the P2 HSC (half-slotted container), the P2 RSC (regular slotted container), and the P2 FOL (full overlap). It can also be made from fiberboard and plastic corrugated, in addition to fiber-based corrugated. To efficiently manufacture the boxes, P2 Packaging developed a glue machine that speeds up the assembly process and allows the converter to better control the quality of the box.
P2 Packaging’s licensed North American suppliers—Anchor Bay Packaging, The Royal Group, and Concept Packaging Group—custom-design the partitions and boxes for each auto part to maximize the density of the shipper. According to Youell, it’s much more viable for a customer in the auto parts industry to invest in the tooling for a custom box design than it would be for those in other industries, given how long the auto parts box design will be used. “Let’s say an auto maker comes out with a new car,” he posits. “Once we design the case to maximize a part, such as a steering wheel or another interior part, they won’t change that part for probably six years.”
Whether the case is used for expendable, semi-returnable, or returnable applications, the customer still saves money with more auto parts per shipper and a more streamlined inventory.
Cost Savings Plus More Benefits
One of P2 Packaging’s biggest cheerleaders is Yanfeng’s Colclough, an automotive packaging professional with three decades of experience, both as a packaging engineer and as a buyer. His company operates more than 20 plants across the U.S., Mexico, and Canada and deals with nearly every automotive OEM in North America, including Ford, Tesla, BMW, GM, Kia, and VW, to name a few. The company ships millions of parts annually, with finished goods shipped in returnable packaging such as steel racks, injection-molded totes, and collapsible bulk containers.
P2 Density Improvement Example
Ford Pull Handle
Tier 2 Supplier to Yanfeng
Ships to Queretaro, Mexico
Skid Density = 500
New P2 Design
Skid Density = 1008
However, for component parts shipped between two different Yanfeng plants and from its Tier 2 suppliers to its manufacturing plants, the company had been using the standard, single-use box with slotted partition. Colclough learned about the P2 from Youell, whom he had worked with some years previously when American Corrugated supplied Yanfeng with traditional, single-use shippers.
Six years ago, Yanfeng began using the P2 as a one-way shipper to improve its container density. According to Colclough, the average cost of a cutting die for a custom P2 shipper is $3,000, but the savings are far-reaching, even if the case is only used once. “Every P2 is custom, which allows you to size the box/cell to get the best density,” he explains. “Not only can I typically get more cells in a box, but I can usually eliminate wasted head space at the top of the carton, which frequently allows me to fit another layer or two on a pallet. It’s not uncommon to get a 100% increase in skid density by switching over to a P2 design.”
In one example, Colclough shares how, for a Ford pull handle, the former shipper with separate partition only allowed for 25 parts, while a P2 with the same footprint has 42 cells, resulting in a 68% increase in box density. The skid density of the traditional shipper was 500 parts, while the skid density for the P2 is 1,008, resulting in a 101% increase. More cases on a pallet means more products on a truck. In fact, in another example, this one for a center console applique for Tesla, a redesign of the former packaging, which held 12 parts, to a P2 holding 32 parts, resulted in a skid density of 192 parts versus 96, and a truck density of 11,520 versus 5,770, eliminating 58 trucks from Michigan to California in one year.
Colclough lists a number of other benefits of the P2 beginning with design and development process, which he says is very easy and be done quickly—“in days, not weeks or months.” He adds, “I personally create almost all P2 designs used at Yanfeng, but the designers at all three companies are excellent and can easily work from CAD data or prototype/production parts to develop P2 designs. Prototypes are then cut on the sample table. We almost always send a trial shipment using the P2 design to verify we don’t have any quality concerns.”
Once in the warehouse, the benefits continue, as the P2 is easy to set up and assemble, with a sturdy partition that won’t fall apart. In addition, operators do not have to install the partition into the box, which saves time and labor. The P2 also has excellent stack strength, which Yanfeng confirmed through early testing at a Smithers package testing lab in Lansing, Mich. And, the P2 reduces inventory, as Yanfeng only needs to inventory a single part number that includes the box and partition.
Reusable Strategy Pays Off
In 2019, after hearing of the success another auto parts supplier achieved using the P2 as a returnable shipper, Yanfeng decided to try this strategy for a Ford Explorer program. Recalls Colclough, “When we launched the first Ford program where we intended to return the P2 boxes, we had no idea how successful it would be. Most of Yanfeng was skeptical because it’s not the norm to reuse corrugated boxes. Nobody in the automotive industry to my knowledge was doing this on a large scale. Our initial hope was that we would get three turns from each box. To help track the number of turns, we put a barcode label on the P2 boxes. Mexico would scan the boxes before they were loaded with parts. We quickly accumulated data showing we were consistently getting more than five turns from just about every box and in some cases, over 10 turns.
“That was an overwhelming success, and now the P2 is used on every new launch at Yanfeng and has become our standard packaging option for all parts shipping out of Mexico.”
Currently Yanfeng is using upwards of 60 different unique P2 designs. While the box can be manufactured in several styles, Yanfeng primarily uses the HSC-style case, with a common cover over an entire layer of boxes. In most cases, the box portion of the design is 32 ECT C-flute, although, says Colclough, in some cases it might use a heavier material, such as a 44 ECT or double-wall material. For the partitions, most of Yanfeng’s designs use E-flute material, but it also uses chipboard partitions, Nomar (non-abrasive paper coating)-coated materials, and some polychip partitions.
Originally, the boxes used by Yanfeng were taped closed at the bottom. “Just recently we started implementing a locking-bottom design to eliminate the need to tape the boxes,” says Colclough. “This will make collapsing the boxes much easier, because we will no longer need to cut the tape.”
Another tweak made to box was the elimination of shipping labels. “When we tried to peel the labels off, the liner would tear,” explains Colclough. “We started placing a couple of placards on the outside of the box similar to what is used on returnable packaging. Now the labels can easily be peeled off without damaging the box.”
All of the P2 boxes are printed with graphics on the exterior that detail the part, the program, and the return-to location. The graphics also help differentiate the P2 boxes from the other boxes used at Yanfeng’s locations.
For the return process, once incoming parts are unloaded from the P2 boxes at Yanfeng’s U.S. sites, the shippers are collapsed completely flat and are placed into an overpack, for better stacking on the return trip. Estimates Colclough, between 60 and 80 P2 cases can fit on one pallet. The pallets are then picked up at each individual Yanfeng plant and routed through its consolidation network for transportation to Mexico.
Says Colclough, “We can return a P2 box for approximately $0.60 to $1.10 each. This includes the freight expense, along with the cost for an overpack and heat-treated pallet. We usually repurpose boxes we receive from other suppliers for the overpack. This reduces cost and waste.”
Colclough uses an example of a new program comprising 10 different auto parts to summarize the savings that can be realized from reusing the P2 box: “The P2 design is slightly more expensive than the traditional box and partition combo [$2,106,351 versus $1,744,668], so if the P2 boxes are not returned, it will cost Yanfeng an additional $360,000. If the boxes are returned and reused just once, it will save Yanfeng $530,000. If the boxes are returned six times, that number jumps to $1.1 million in savings.” He adds that the cost of return logistics for the P2 needs to be added into those figures, which for Yanfeng’s designs is around $1 per box.
As P2 founder Youell shares, one aspect of the P2 container that sometimes gets buried when focusing solely on the materials and logistics cost savings of the system is its tremendous sustainability impact. According to estimates from P2, using its packaging versus a traditional shipper with partitions saves 2,114 trees, or 53 acres of trees, and reduces CO2 emissions by 372,000 lb (based on a 25,000 P2 box order, with a box measuring 24 x 24 x 24 in. with partition).
This was also a consideration for Colclough in selecting the P2, as Yanfeng has an extensive sustainability roadmap and associated KPI (key performance indicators). “Our European plants are the leaders on this front,” says Colclough. “Most of the current emphasis globally is around clean energy and product development opportunities, but I’m part of the Sustainability Ambassador Team and working to highlight the impact and importance of various types of packaging on our carbon footprint.” Yanfeng’s elimination of 58 trucks per year with the P2 shippers for the Tesla program is one very clear sustainability win.
Another is the savings in packaging material and waste reduction. “By reusing the box six times, you keep five boxes out of the waste/recycling stream,” says Colclough. “Just imagine if this was done across the automotive industry for all applicable parts.”
A 'No-Risk' Proposition
According to Youell, the P2 shipper has been in use by auto parts companies since 2010, initially for one-way shipments and, beginning in 2015, for reuse. But the number of companies embracing this packaging is still small, especially given the staggering cost savings its current customers have achieved. The largest hurdle for new customers, he surmises, is a resistance to change.
Colclough agrees, saying that it’s difficult to introduce change into an existing work environment. You have to establish new processes and bring skeptical team members on board, he says. Project ownership is also required, driven by an internal champion. He adds that implementing the P2 returnable shipper system also requires cooperation from multiple plants and various departments, and most of all, “support from upper management is critical,” he says.
“Implementing the P2 design at Yanfeng was a change, and many people/organizations struggle with change,” Colclough adds. “It took a little while to gain some traction, but eventually the numbers spoke for themselves, and management has been very supportive. As I’ve said, there is nothing else in the packaging industry that was going to save us this type of money—with almost no capital investment. The payback is immediate, and there is literally no risk.”