A new process that increases packaging density greatly reduces waste
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Did you know that it costs more to ship 100 pounds of feathers than 100 pounds of bricks?
Shipping costs are determined by volumetric weight, a commercial freight pricing technique that estimates the weight of a package based on its length, width, and height. Less dense items generally take up more volume relative to their actual weight -- so when you ship something, you're essentially paying for the space your product takes up on a plane or truck.
ON Semiconductor found a way to increase packaging density by reducing bulk density using our tape and reel packaging process. Tape and reel packaging involves placing a number of surface mount devices (SMDs) on a tape and wrapping them around a reel for easy shipping. We were able to increase packaging density by doubling the number of reels in a box. This not only reduced the company's shipping costs, but also reduced CO2 emissions (fewer trucks and planes needed for shipping) and an estimated 375,000 kg (about 826,733 pounds) of packaging materials were not sent to landfills each year. In addition to being more cost-effective, this adjustment has no impact on our customers and has the potential to take up less space in our customers' warehouses.
Our current process is to wind the SMDs on a 13-inch reel and place them in an intermediate box; four intermediate boxes can be packed into one super box. ON Semiconductor Global Supply Chain Operations team recommended placing two 13-inch reels in one intermediate box . As mentioned above, because commercial shipping companies calculate prices based on volume weight rather than the total weight of the package, the new process will greatly reduce waste and significantly improve cost-effectiveness. It is estimated that the number of intermediate boxes will be reduced by 500,000 per year . This package optimization project is currently in the pilot phase. Once the pilot is completed, we will continue to implement it on a factory-by-factory basis to make our packaging process more efficient.
ON Semiconductor is continually working to develop more sustainable practices through continuous improvement programs, as sustainability is at the core of our company.
We are a full member of the Responsible Business Alliance (RBA), included in the Dow Jones Sustainability Index (DJSI) North America Index, named one of the World's Most Ethical Enterprises (WME) in 2019 for the fourth consecutive year, and included in Barron's 100 Most Sustainable Companies list. This change has no impact on our clients, and we are excited to continue the challenge of further developing methods and providing more sustainable business methods.
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