Ingenuity At The Heart Of The Supply Chain

The world runs on corrugated boxes. Transporting just about anything, from food to machine parts, requires the ubiquitous brown packages, placing them squarely at the center of the global supply chain. Unsurprisingly, events in recent years have upended the corrugated box market. (Corrugated refers to the durable, multi-layered board sheets used for packages.) A confluence of factors – the rise of e-commerce, the COVID-19 pandemic, related COVID government relief, sustainability initiatives and more – have contributed to a spike in demand that sent box material prices soaring (up some 32% in June) and maxed out producers’ capacities.

“Some of our customers grew 25% the last couple of years,” says Christine Little, Senior Sales Manager with the Corrugating Machinery Division of Mitsubishi Heavy Industries (MHI). “Now they’re trying to figure out, ‘Is this the new norm?’”

Box producers need the flexibility to adapt to a wide variety of potential scenarios, a tall order for a traditionally slow-growth industry that measures investment cycles in decades. But an elegant solution called 2-Up Production is helping by doubling the effective speed for box-making machines such as MHI’s EVOL Flexo Folder Gluers.

The idea isn’t entirely new: MHI, whose machines make tens of millions of boxes worldwide each year, first developed 2-Up Production with a customer in 2015. But it’s becoming increasingly popular as the breakthrough is being recycled – much like the box material itself – and put to more-valuable uses as box manufacturers look to make their operations more scalable, flexible and efficient.

New era, less visibility

Like other sectors today, the $36 billion-a-year market for corrugated boxes faces a complex set of powerful crosscurrents. Forces that could drive or sap growth include:

• E-commerce. Internet commerce has exploded, going from 1% of North American retail sales in 2007 to an estimated 24% this year. Other regions have had similarly steep growth trajectories. The pandemic famously turbocharged online shopping; now, observers debate whether e-commerce growth will slow or maintain its torrid pace.
• Labor shortages. Like many employers, corrugated-box manufacturers have struggled to find workers. To meet demand, they may need to do more with fewer people. “Corrugated board suppliers have been looking for the available personnel in their production areas all over the world,” says Hiroyuki Kikumoto, Vice President of Sales for MHI’s Corrugating Machinery Division. “It’s not only in the U.S., but also European, Asian and even South American and Arabian countries.”
• Sustainability. Corporate sustainability efforts focused on circularity have increased the usage of corrugated packaging that’s renewable, recyclable and biodegradable, often as a replacement for plastic in packaging and elsewhere. Companies also are demanding boxes sized to their contents to minimize the waste involved with shipping air.
• Economic uncertainty and inventory overhang. Box producers are facing possible recessions in the U.S., Europe and elsewhere, while companies from retailers to semiconductor makers are sitting on enormous inventory surpluses. The Eurozone Purchasing Managers’ Index of finished goods inventory hit its second-highest level ever in June, surpassed only by the early days of COVID. Companies might have a hard time working through the glut, potentially weakening near-term demand for corrugated packaging.

Box makers need the flexibility to navigate these swirling waters. That’s where 2-Up Production can help.

Same machine, double the boxes

Back in the mid-2010s, a customer approached MHI Corrugating Machinery with an ambitious idea: Could a box-making machine be engineered to produce two smaller boxes in the time it took to make one larger box?

“One of our customers helped us develop the concept,” Little recalls. “They had an idea and worked collaboratively with our engineering department on it.”

Doubling a machine’s productivity may sound daunting, but the concept is relatively straightforward. Consider how a manufacturer produces a run of boxes using one of MHI’s EVOL machines:

• A worker enters details for the order, such as box specs and order size.
• The machine receives a series of individual corrugated board sheets.
• It guides the board through a series of steps: printing in as many as four colors, creating slots in just the right places, gluing the joints, folding the sheets into boxes, bundling them together, stacking them and ejecting them — up to 400 per minute, or 24,000 per hour — to be grouped onto a pallet.

2-Up Production is a system that uses the same basic process, but instead of making one box out of each board sheet, it makes two conjoined boxes, then separates them with a slitter. This novel solution allows the machine to double production to as many as 800 boxes per minute, or more than 13 per second.

The idea behind 2-Up Production was simple, but making it work was another matter. To cut slots for two boxes on one sheet, MHI developed the Dual Slotter, a minor miracle of engineering. It uses four knives and improved sensor technology to cut slots with an accuracy of less than half a millimeter, at speeds too fast to see clearly with the naked eye.

All that high-speed cutting introduced another problem: scraps of corrugated board that threatened to stick to boxes’ glued portions. MHI further fine-tuned its machines, introducing air blowers and scrap guides to keep the scraps from gumming up the process.

The company shipped its first Dual Slotter-equipped EVOL machine in July 2015. Since then, it’s adapted the technology for use with other EVOL models.

^{Mitsubishi's EVOL box-making machine in action.}

Preparing for the future with a proven solution

In 2020 and 2021, the vast majority of EVOL machines sold included Dual Slotter technology. A box manufacturer using 2-Up Production now has far greater flexibility to match its output to the market: scaling up during spikes in demand, making smaller boxes faster and potentially doubling the productivity of its workforce.

Therein lies a valuable lesson for those focused on thinking outside the box. Sometimes, you need an entirely new breakthrough. Other times, the wisest strategy is applying an existing breakthrough to a new set of problems.

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