Mercury Plastics Finds Value in Competitive Pricing, Short Lead Times, and a Collaborative Partnership
Customer Profile
Since 1965, Mercury Plastics has been at the forefront of delivering tailor-made thermoplastic solutions across diverse industries, including appliance, automotive, construction, electrical, liquid dispensing, marine, medical, offshore oil exploration, and plumbing markets. Their operations, spanning multiple cutting-edge manufacturing facilities, excel in extrusion, injection overmolding, crosslinking, and fabrication processes. www.mercury-plastics.com
Business Situation
Many corrugated companies often face vendor price increases due to their reliance on mills and other supply chain constraints. In 2016, Mercury Plastics encountered price escalation from all three of its corrugated box suppliers. Sensing the need for a change, the company initiated a comprehensive request for quotation (RFQ) with various packaging companies, aiming to find opportunities for cost savings. At first, the company approached several sizable integrated box companies, only to discover that its order volumes weren’t the right fit. Consequently, it considered multiple independent box manufacturers catering to the Northeast Ohio region. Among these corrugated producers was Jamestown Container Companies (JCC).
JCC Delivers More than Boxes
Impressed by JCC’s appealing pricing, location, and services, Mercury Plastics decided to make JCC its exclusive sole-source packaging supplier. “Jamestown was very cost competitive, and one of the winning factors was how its manufacturing structure is vertically integrated,” said Michael Zajac, Supply Chain Manager at Mercury Plastics. “We did not have that through any of our other providers. By owning part of their own mill, we’re taking out a couple of middlemen in the process. They stood out as a company that could offer the full package; they have a local plant, and they had two different manufacturing sites, which provides some redundancy in case one of the sites went down.”
In addition, the company found value they didn’t realize they needed. For a plastic manufacturing company, carrying a large inventory of boxes decreases the space dedicated to revenue-generating products. This was the case with Mercury Plastics, which had 60 percent of its warehouse dedicated to corrugated packaging. The benefits from JCC’s vendor-managed inventory program are evident.
“One of the things that we weren’t necessarily searching for but was a benefit was a really large reduction in what we were carrying in cardboard stock,” said Michael. “The daily delivery that Jamestown provides and having next-day availability for a subset of our cartons really helped us reduce the footprint in our warehouse and start dedicating monies and space towards the products that we were making instead of the supplies we put them in.”
Today, Mercury Plastics purchases all its standard brown boxes from Jamestown Container, 40% of which are custom die-cuts. With approximately 60 distinct SKUs, the primary hurdle in transitioning to JCC as their sole packaging supplier was the need to deplete existing inventory and transfer tooling from their various previous suppliers.
“The Jamestown folks were very accommodating,” said Michael. “A couple of the dies were damaged coming from the incumbent suppliers, and the folks at Jamestown just repaired them, which was greatly appreciated.”
JCC’s design team has also played a crucial role in delivering value to Mercury Plastics. The company invited JCC to participate in a Kaizen event where the goal was to reduce packaging SKUs and improve operator handling time. These boxes play a pivotal role in the production of polyethylene crosslinked (PEX) pipes, as Mercury Plastics holds a unique distinction as the exclusive manufacturer of plastic tubing and over-molds using a radiation-based crosslinking process. During this process, the PEX pipes are inserted into a container featuring up to 75 ventilation holes which help facilitate heat dissipation. Previously, Mercury Plastics used two-piece trays and lids, requiring tape to secure the lid when the box was overturned during the radiation process. The JCC design team wasted no time addressing this challenge and created a unified “pizza style” box with a fold-over lid and self-securing lock tabs, effectively streamlining the process and delivering noteworthy time and labor savings for Mercury Plastics.
As Mercury Plastics continues to expand its operations with additional PEX manufacturing facilities, they anticipate relying on JCC for solutions that continue to support its growing business needs.
“This winter, we will have to sit down with the design team again to redesign our boxes to accommodate a different machine throughput,” Michael said. “How can we make the design better, faster, and easier for our operations team as they’re putting parts into boxes, spending less time in assembly, and maybe reducing the SKU count, as well as consolidating to fewer box types, which I think will bring both Mercury and Jamestown savings, as they will enjoy better economics of the runs while ultimately still selling us the same square footage of cardboard.”
“I’m very appreciative of the relationship that I’ve had with Jamestown, the open candor when we were negotiating and dealing with the tooling transfer at the start of the relationship. It’s been worth it to me to have them as a sole source vendor, and we have re-upped multi-year agreements several times.”
Customer Benefits
- Mercury Plastics was able to reduce its warehouse footprint for packaging by 60 percent and reduce the carrying costs associated with holding inventory.
- Lead times have been reduced by more than 35% compared to previous suppliers, with high-volume SKUs available next day and the rest of their packaging available in 7 days or less.
- Custom tooling is cost-effective and priced more competitively than the competition.
- Competitive corrugated pricing had a significant positive impact on the company.
- Innovative packaging design streamlined operations, reducing time and labor costs.
