Why Cost-Per-Load Matters More Than Cost-Per-Roll
Many purchasing decisions for stretch film focus on the cost-per-roll, often overlooking the true cost of securing a pallet. While a roll of high-performance 51-gauge film may appear more expensive than an 80-gauge conventional film, the actual cost-per-load can be significantly lower. This is due to the reduced material usage, improved load containment, and fewer revolutions required to secure a pallet.
For example, assume a 51-gauge metallocene stretch film costs $120 per roll and an 80-gauge conventional film costs $90 per roll. If the 51-gauge film uses 40% less material per pallet, the cost-per-load for the high-performance film would be $0.72 compared to $1.08 for the conventional film. This calculation assumes the 51-gauge film secures 166 pallets per roll, while the 80-gauge film secures 83 pallets per roll.
Key Takeaway
Calculating Material Savings Through Downgauging
Downgauging to thinner, high-performance films is an effective strategy for reducing material costs without compromising load security. Consider a scenario where a company uses 80-gauge conventional film for 50,000 pallets annually. If each pallet requires 0.5 pounds of film, the annual material usage is 25,000 pounds. At $1.08 per load, the total annual cost is $54,000.
Switching to a 51-gauge metallocene film that uses 40% less material reduces usage to 15,000 pounds annually. At $0.72 per load, the total annual cost drops to $36,000. This represents an $18,000 savings, or 33%, in material costs alone.
Pro Tip
Hidden Costs: Waste, Downtime, and Labor
Beyond material costs, hidden factors like waste, downtime, and labor significantly impact the total cost of stretch film. Conventional films often result in higher waste due to tearing or over-application, particularly with manual wrapping. High-performance films, engineered for consistent application and superior stretch recovery, minimize these issues.
For instance, a 51-gauge film with a 250% pre-stretch ratio applies at a 15-17 gauge equivalent, reducing the number of revolutions needed to secure a load. This translates to faster wrapping times and less operator fatigue. Assuming labor costs of $18 per hour and a 10% reduction in wrapping time, a facility wrapping 50 pallets per day could save over $4,500 annually in labor costs.
Labor Impact
Storage and Inventory Considerations
Storage costs are another overlooked factor in stretch film procurement. Thinner, high-performance films typically offer more footage per roll, reducing the number of rolls required for the same number of pallets. This minimizes storage space and inventory carrying costs.
For example, a 51-gauge film with 9,000 feet per roll compared to an 80-gauge film with 5,000 feet per roll requires nearly half the storage space for the same pallet coverage. Assuming warehouse storage costs of $0.50 per square foot per month, a facility storing 100 rolls could save $300 annually by switching to the thinner film.
Important
Building Your Cost Model
To accurately assess the true cost of stretch film, build a comprehensive cost model that includes material, labor, waste, downtime, and storage. Start by calculating the cost-per-load for each film option using the following formula:
- Cost-per-load = (Roll cost ÷ Pallets per roll)
Next, factor in labor savings from reduced wrapping time, waste reduction from improved film performance, and storage savings from fewer rolls. For example, if switching to a high-performance film saves $18,000 in material, $4,500 in labor, and $300 in storage annually, the total savings is $22,800. Compare this to the upfront cost difference to determine the break-even point.
Key Takeaway
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