1

Eco-Latch Systems, LLC’s Box Latch™ Products Narrative At work for Belimo USA belimo.us/americas

Abstract: While pursuing his company’s lean manufacturing initiatives, Michael Gallo at Belimo USA discovered that using Box Latch™ Products in the assembly of their HVAC actuators and valve systems produced far more benefits than he ever envisioned. Those benefits include saving hundreds of thousands of dollars and the environment by:

1. Extending the lives of boxes as they repurpose and re-use them

4. Re-using boxes that otherwise would be sent to and through the expensive recycling process

2. Reducing and/or eliminating tape on shipments to and from down- and upstream suppliers

5. Saving expensive floor space that now is available for other uses

3. Reducing transportation and environmental impact costs by replacing heavy, space-wasting, double-high wooden crates with lightweight, partitioned boxes

6. Saving time and motion (labor) by loading parts and boxes more efficiently at assembly cells and reducing assembly touch points

7. Reducing the carbon imprint as petroleum-based plastic totes are replaced with re-usable corrugate boxes

Section 1: The Back Story

1. What led Michael Gallo at Belimo® to test and purchase Box Latches™?

As a manufacturing engineer, Michael Gallo knew there had to be a more cost effective and environmentally friendly way to transport parts received from his company’s downstream suppliers in Waukesha, WI and Rochester, NY arriving at Belimo’s USA assembly plant in Danbury, CT. His employer was deeply interested in lean manufacturing principles that would support the company’s sustainability mission. Michael’s goal of streamlining the assembly process for Belimo’s products peaked in the summer of 2016 when he learned about the value and availability of the Box Latch™ and how, with innovation, its use could fulfill these objectives.

2. What does the end-user of this narrative manufacture and assemble?

Belimo is a listed clean technology company (see website belimo.com) with a staff of more than 1,400 worldwide. The company is a global market leader in the development, production and marketing of actuator and valve solutions for controlling heating, ventilation and air conditioning systems. Actuators,

control valves, and sensors assembled in Danbury, CT make up the company’s core business. Their products create comfort, safety, and efficiency in buildings to increase energy efficiency and reduce installation costs.

2

3. What led Belimo to pursue a closed loop transportation system with Wisconsin Metal Parts (WMP)? Because of the high quality production of parts manufactured by WMP’s Waukesha, WI firm and their eagerness to fill any and all of Belimo needs, these parties have been working together for a decade. Thus, when Michael looked for ways to save money and improve the transportation of parts from Wisconsin to Connecticut, Dave Holzer at WMP was ready to embrace any ideas that would work. Further details of this low tech solution can be found in Section 2 Question 5.

4. How will this affect Belimo’s plans for dealing with suppliers in the future? Buyers of parts and products set the rules for suppliers. Because this new system has produced such a successful outcome, Michael said, “It’s simple. We will simply tell future suppliers that this is the closed loop, re-usable box system we use with our suppliers and we expect any new vendors to comply with it.”

Section 2: Box Latch™ Products Used by Belimo USA

1. As an end-user manufacturer of finished products for sale, which of Eco-Latch Systems’ (ELS) Box Latch™

Products does Belimo use? Belimo USA has been using the Box Latch™ for nearly a year with increasing application in packaging, storage, line-assembly and transportation systems.

2. On which Box Latch™ Products does Belimo want to focus for this narrative?

The Box Latch™ (BL) Medium in the past and the BL Large for the future. However, as a manufacturing engineer, Belimo’s Michael Gallo also is interested in the Box Latch™ Small with one or two Anchors. That is a one piece unit in final stages of development by ELS. Its beauty is that it is can remain on boxes and weighs less than half that of the other Box Latch™ Products. However, since that product still is in development and, because of its versatility, Belimo USA purchased 2,500 of the BL Large in September 2017. This will allow for expanded use of their latches on ever increasing sizes and wall thicknesses of boxes.

3. With respect to this specific product, the Box Latch™ Medium, how long has Belimo been using it? More than one year in the Danbury, CT and Hinwil, Switzerland facilities.

4. How did Belimo find out about this product? Michael viewed it at the boxlatch.com website. A prior purchase had been made by Belimo headquarters in

Switzerland where Box Latches™ are used to close boxes during circulation on conveyors that, ultimately, are

placed on palettes using a vacuum lift device. Click https://youtu.be/1Bw-p3fs_wM to see this labor saving feat.

Boxes stacked on palettes by robotic vacuum lift system at Belimo in Hinwil, Switzerland

3

5. How is this Box Latch™ Product used during Belimo’s assembly process?

a. Past vs. Present. In the past, Belimo’s solution for transporting metal parts from suppliers to their production lines has been via wooden crates. (Figures 1 & 2) These wooden crates hold parts well, but have many disadvantages. They are 1) heavy, 2) easily damaged, 3) expensive, 4) difficult to move, 5) space inefficient and 6) do not mesh with Belimo’s lean manufacturing mission. While investigating creative solutions, Michael and his team felt that using an existing, reusable corrugated box was the best option. What was missing was a method to easily open, close and secure the boxes. Box Latch™ to the rescue. The result for Belimo was the elimination of an estimated $15,000 expense to purchase a new set of wooden crates.

Figure 1 Belimo wooden transport crates Figure 2 Damaged wooden transport crates

Supported by the Belimo lean production team, Michael designed and purchased box inserts illustrated below in Figure 3 for approximately $500. This produced a savings of $14,500 vs. purchasing a new set of wooden crates. Belimo employs these previously used and, now repurposed, boxes in an external closed loop system to transport parts from Wisconsin Metal Parts in Waukesha, WI to Danbury, CT. Figures 3-5 show the creativity of this team on the floor of Belimo’s 300,000 sq. ft. manufacturing and assembly plant. When empty, the empty boxes are stacked eight-high, shrink wrapped on pallets and shipped back to WI at a lower cost than transporting the heavy wooden, space-wasteful crates.

Figure 3 Figure 4 Figure 5

As one example of the savings, when one actuator part was shipped in a wooden crate, it held 120 pcs per crate. Thus, 20 wooden crates held a total of 2,400 pcs. With parts now being shipped 80 pcs per corrugate box, 2,560 pcs occupy the same space as did the 20 wooden crates. Even more impressive, a pallet with 20 empty crates at 50 lbs/crate weighs 1,000 lbs while a full pallet of 32 empty boxes weighs a mere 180 lbs. This produces an environmental benefit and transportation savings of 820 pounds less freight to return the boxes. It also cuts the number of pallets shipped in half because each pallet now holds twice as many pieces as did the wooden crates. When this is multiplied by the 80 shipments per year between CT and WI, the

4

savings on freight alone is $75,670 per year. Add in the $17,030 saved when the boxes are shipped back to WI and the savings equals $92,690 per year. Include the $14,500 saved by not having to buy new wooden crates and total savings = $107,000. Run the numbers for five years, subtract the cost of partitions and Box Latches™ and you get a grand total of $476,903 – all because of the innovation stimulated and provided by the use of the Box Latch™. Talk about a whopping ROI on $550 worth of Box Latches™. It is hard to see where another investment this small could generate an ROI this big. This reduces the number of boxes needed, a savings that is not, yet, entered into this equation. It also reduces dunnage costs for recycling boxes at the same time it produces huge savings to the sustainability of the environment. The frosting on the cake is that eliminating the wooden crates frees up expensive floor space for more assembly cells, meshing well with Belimo’s lean manufacturing principles.

b. What end-user products does Belimo assemble? The Belimo valve and actuator products depicted in Figure 6 and others like it.

Figure 6 c. What assembly problem has Belimo solved as they produce these products?

The problem involved the receipt of individual parts from their supplier in heavy wooden crates. As an element of their continuing lean initiatives, the wooden crates produced high freight costs, required excessive material handling and were inconvenient for the material handlers and assemblers. As one example, Belimo would receive 1,400 pcs of one metal part stacked flat in a wooden crate, Figure 8. To position the parts at a higher elevation for easier access by operators, the full wooden crate was placed over an empty one. At each cell, assemblers had to remove a small quantity of parts from the crate located across an aisle. Every element of this material handling was inefficient. Going forward, material handlers now drop skids with 1,600 pieces as seen in Figure 7, occupying the same footprint as the wooden crates holding 1,400 in Figure 8. Moreover, the individual boxes on the skids now can be loaded directly into the lean assembly cell, reducing the number of part touches.

5

Figure 7. Re-usable boxes closed with Box Latches™ Figure 8. Filled top crate over empty bottom

Figures 9 - 11 illustrate Belimo’s empty, re-usable, partitioned boxes before and after they have been filled with different types of parts. When asked, “How many uses do you obtain from these boxes?” Michael’s

response was, “We just did the calculation for the first year and our original 500 partitioned boxes already have comleted nearly six cycles and are going strong. We are counting on at least ten” Note the “reusable” markings in Figure 7 and 9 printed on Belimo’s high quality boxes.”

Figure 9. Reusable box being filled at Figure 10 Figure 11 assembly cell at WMP in Wisconsin

6. What did Belimo do before using Box Latch™ Products? Belimo’s material handlers previously lifted parts out of the large wooden crates seen in Figure 8 and placed them on the assembly tables or in smaller plastic totes at the back of the assembly tables seen in Figures 12 and 13. The parts that previously were delivered in wooden crates and stored in the aisle across from the assembly cell now are placed to the left of the station as shown by the arrow in Figure 13. At some assembly cells, parts were delivered or stored in the black or blue plastic totes seen in both of these photos. Many of these totes will be replaced with the open, partitioned boxes seen in Figure 15.

6

Figure 12 Figure 13: Boxed parts on skid with existing plastic totes

7. What are the benefits of this new system?

a. Partitioned Boxes. By using smaller, reusable, partitioned boxes to hold parts closed with Box Latches™, the lean production team has eliminated extra touches of parts. At the same time, this new system facilitates easier loading of boxes filled with parts into the ever leaner assembly cells.

b. Replacing Plastic Totes. To further improve sustainability and the transport and flow of parts in Box Latch™ closed boxes, Michael’s team came up with an idea that replaces the plastic totes at the end of the right arrow in Figure 13 with custom produced boxes. As seen in Figures 14-15, this innovative box has only two major and no minor flaps. The minor flaps on this rectangular box are cut off and placed under the partition inserts. This adds strength to and fills the void in the middle of the bottom of the box so that the inserts lie flat across the entire surface. This makes it simple to close the boxes with a Box Latch™, hold them open with yellow plastic clips purchased from BeePackaging.com and replace the plastic totes with lightweight, re-usable boxes as shown in Figure 15.

Figure 14 New box with two minor flaps removed Figure 15 Partitioned boxes replacing totes

When these boxes are stored at their work stations, assemblers merely reach into the partitioned boxes at the left end of the assembly station (Figure 13) or up and into the new, small boxes shown in Figure 15. Parts positioned perfectly in these boxes for assemblers now are removed one at a time, instead of in random handfuls as with the wooden crates. It also allows empty boxes to be replaced with full ones as assemblers load and unload their cells from the back side. The empty boxes are closed with latches, palletized and returned to

Major flaps

7

the start point. Many of these changes reduce “one or more touch points” for each product assembled. The expectation is that this will increase the number of products per shift, resulting in reduced operation expenses.

8. What number of Belimo’s products involve the use of the latches during production? The total volume of parts used and various products sold where Box Latches™ participate in time and material savings are in the tens of thousands per year. On the production side, Box Latches™ were tested first with one part to see if this closed system would work as desired. Because of the success of that test, Belimo is now using reusable boxes and Box Latches™ with five different parts produced by two different suppliers, i.e., Wisconsin Metal Parts in Waukesha, WI and Alton Manufacturing, Inc. in Rochester, NY. As the use of the Box Latches™ continues to penetrate Belimo’s innovations, increasing numbers of boxes closed with Box Latches™ instead of tape are appearing throughout their manufacturing plant. (Figures 16 - 18)

Figure 16 Figure 17 Figure 18

. 9. Were Belimo’s suppliers open to rethinking the Belimo parts delivery and product assembly process? When this idea was introduced to downstream supplier, Wisconsin Metal Parts, their staff willingly participated in the adoption of this innovative, low technology system built around the concept of re-using materials. Figure 19 shows Belimo’s Michael Gallo and WMP’s Dave Holzer celebrating the success of this closed loop box and Box Latch™ re-use project.

Figure 19

8

The results of all this creativity, innovation and effort save money by:

a. Repurposing and re-using boxes that otherwise would be sent to recycling*. (This means they are supporting the ELS goal of re-using 10% of the world’s boxes 10 times in order to reduce the world’s need to recycle boxes by 40%.)

b. Extending the lives of their high quality boxes, c. Reducing and/or eliminating tape on shipments from Waukesha, WI and Rochester, NY to Danbury, CT

and on returns in this closed loop*, d. Reducing transportation and environmental impact costs by replacing heavy, space wasting, double-

high, wooden crates with lightweight, partitioned corrugate boxes transported between locations via shrink-wrapped pallets,

e. Saving valuable floor space on their assembly floor that now is available for other uses, f. The fact that material handlers and assemblers love this system because it reduces time and motion

loading parts and boxes more efficiently at their cells while also reducing touch points during the assembly process,

g. Reducing the carbon imprint as petroleum-based plastic cartons within the company’s manufacturing and assembly process are replaced with corrugate boxes and

h. Curbing dunnage costs for removal of boxes previously recycled after one use.*

10. Does Belimo have plans to use other Box Latch™ Products? This same idea and process developed and implemented with Wisconsin Metal Parts now is being pursued with a second stamped part from WMP as well as with additional parts shipped from downstream supplier Alton Manufacturing in Rochester, NY. The concept also is being applied within Belimo’s internal closed loop manufacturing and product assembly process in other sectors of their Danbury, CT plant.

Prepared by Jim Wilson, CEO, ELS, Box Latch™ Products with assistance and permission from Mike Gallo at Belimo

and Dave Holzer at WMP.

* Data that monetizes the savings on tape and recycling dunnage are expected in early 2018

Wooden Crates

Latched & Partitioned

Boxes# parts/year shipped from CT to WI 200,000 200,000 parts/pallet 2,400 2,560 # of pallets/year 83 78two pallets of crates = ~ 1 pallet of boxes with 2,560 parts 2 1Number of pallets with crates to ship slightly fewer boxes (2,500 vs. 2,560) 167 78

Wooden Crates Latched BoxesShipping costs per pallet $150 $102Shipping costs Danbury, CT to WI per year $25,000 $7,969Subtract lower costs of latched boxes -$7,969

$17,031

Pieces Lbs Dollars Cost/pcWisconsin to CT with Wooden Crates 3,000 6,780 $2,049.84 $0.68Now with boxes 7,680 7,591 $2,342.27 $0.30

$0.38Parts shipped per year 200,000 200,000

Savings per Year One Way WI to CT $75,659.39Savings per Year CT to WI $17,031.25

$92,691Time Period 7/1/16 to 8/24/17 5Number of pieces shipped 227,840 $463,453 Pieces per box 80 $14,500.00Number of Boxes shipped 2,848 -$500.00 No. Partioned Boxes Used During Period 500 -$1,000.00

Number of Cycles These Boxes Have Mad 6 $476,453

Belimo Shipping Cost Savings for Part # 1 Wisconsin to Connecticut

Belimo Shipping Cost Savings for Part # 2 Connecticut to Wisconsin

Cost of Box Latches

Net 5-Year Cost Savings

Savings Per Year

All of This - NOT Counting Savings on Tape and Number of Boxes NOT Purchased + Saving from Costs for Dunnage Recyling**

Cumulation of 5 Years SavingsSavings Not Buying New Crates

Cost of Partitions

Five-Year Savings

Enter Number of Boxes Used In Your Home or Shipping Department 1000 Cost of BLCP Per Use (assuming minimum of 100 reuses) $0.01

Enter Your Cost Per Each Box By Size $1.00 Cost of Boxes Per Use @ Estimated New # of Uses $0.20Enter Estimated Number of Uses Per Box With Our BLCP (Try 2, 5 & 10) 5 Box + BLCP Cost Per Use @ Estimated New # $0.21

Enter Price of BLCP (from website or quote) $1.25 One Time Investment In Box Latch™ Closure Product $1,250 Initial Investment In Box Latch™ Closures $1,250 Cost of Boxes For Your System WITH NO Box Reuse $1,000

Savings on Unneeded Boxes As a Result of Multiple Uses* $3,750Although Boxes Will Wear Out …

Our Box Latches™ Can Be Used Indefinitely And…The Box Latches™ You Purchased Are Yours Forever

PLUS * Savings to the Environment, Reduced Tape Costs, Fewer Human Injuries,Time Saved & Diminshed Employee Frustration & Increased Convenience of Not Having to Locate & Use Tape Guns & Box Cutters

Copyright© Eco Latch Systems, LLC 2015-2017Box Latch™ Closure Products - Cost Reduction Calculator With No Current Box Reuse

Your Input Your Cost Savings Potential

Use calculator to identify the potential savings from reusing your boxes with one or more of our Box Latch™ Products Compare cost with your current NO REUSE system. Inputs on the left can be modified to reflect different scenarios. © ELS, LLC