Did you know it costs more to ship 100 pounds of feathers, than 100 pounds of bricks? Shipping costs are determined by volumetric weight, a pricing technique for commercial freight transportation which uses an estimated weight that is calculated from the length, width, height of a package. A less dense item generally occupies more volume of space, in comparison to its actual weight – so when you are transporting items you are essentially paying for the space your product is occupying in the airplane or truck carrying it.
ON Semiconductor has found a way to increase packing density, in order to decrease the volumetric weight with our tape and reel packing process. Tape and reel involve several surface mounted devices (SMDs) being placed on tape and wound on a reel for easy transportation. By doubling the amount of reels in a box, the company is able to increase our packing density. Not only does this lower transportation costs to the company, but also reduces CO2 emissions (fewer trucks and planes needed for transport) and an estimated 375,000 kilograms (roughly 826,733 pounds) of yearly packing materials not going to landfills. In addition to being more cost-effective, this adjustment poses no impact to our customers and has the potential to take up much less space in customer stockrooms.
Our current process involves one 13-inch reel being wound with SMDs and placed in a single intermediate box; four intermediate boxes can fit into one overpack box. The ON Semiconductor global supply chain operations team proposed the placement of two 13-inch reels in a single intermediate box. As stated above, the new process will be considerably less wasteful and significantly more cost effective due to the commercial freight companies basing their prices on volumetric weight, as opposed to the gross weight of the package. It’s estimated that the amount of intermediate boxes will be reduced by 500,000 a year. The Packaging Optimization Project is currently in its pilot phase. Once that is complete, we will continue to implement factory by factory to become more efficient in our packing process.
ON Semiconductor has always strived to develop more sustainable practices through continuous improvement projects as sustainability is core to our company.
We are a full member of the Responsible Business Alliance (RBA), listed on the North America Dow Jones Sustainability Index (DJSI), and was named one of the 2019 World’s Most Ethical Companies (WME) for the fourth year in a row, and recognized on Barron’s Top 100 Sustainable Companies. This change offers zero impact to our customers and we are excited to continue challenging ourselves on further developing ways to provide a more sustainable approach to how we do business.
Learn more about our Corporate Social Responsibility program here.
