Case Studies

Repack Transformation Strategy & Execution

2 minute read

The Client

Global snack food company

The Challenge

The company had been outsourcing their repack operations to a co-packer, which was costly and inefficient. As part of their overall supply chain transformation, the company planned to bring repack operations in-house and invest in new automation equipment but needed a resource to manage the initiative.

The Solution

Catena Solutions’ Packaging Automation Consultant was brought on to lead the company through the transformation. This included:

Identifying a new automation line vendor
The company was using an automation line vendor that required a $75,000 proof-of-concept with a $1.2 million total investment and processed 300 snack bars per minute. Our consultant identified a new vendor that processed 400 bars per minute, didn’t require a proof-of-concept investment, and had an overall significantly lower cost.

Bringing repack operations in-house
We identified a solution to bring repack operations in-house for a specific product line. By using the new vendor, the company will bring a significant volume (110 million snack bars annually) from outside vendors to in-network distribution centers.

Recommending a new scrap vendor
While working on other aspects of the project, we saw the opportunity to improve the company’s management of corrugated scrap. By locating a new scrap vendor to install a baler at no upfront cost, we helped the company maximize investment which will create a future revenue stream.

Increasing plant electrical system capacity
Our consultant recognized the plant lacked the electrical capacity to support new equipment the company was planning on installing, so we helped increase plant capacity by making recommendations for rewiring and retooling the system.

Optimizing plant workforce
We advised that adding a second automated line at a plant could eliminate the need for a second shift, saving the company a substantial amount of overhead cost.

The Benefit

Anticipated cost savings of our strategy to bring repack operations in-house is $2.3 million annually. This includes:

  • Transitioning to the new automation line vendor will save the company nearly $1 million annually in capital expenditure. Each installation line from the new vendor cost $220,000 compared to the $1.2 million the company was spending on the original designed system.
  • Using the new corrugated scrap vendor will create a future revenue stream of $57,000 annually and optimize scrap management through recycling rather than sending scrap to a landfill.
  • The recommendations for the plant’s electrical system challenges will increase capacity by 35% and allow for future expansion activities.
  • By helping the company optimize their plant workforce through the installation of a second automated manufacturing line, the organization will save $700,000 annually in overhead costs.

Facing any similar challenges? Contact us to discuss how Catena Solutions can help.

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