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To achieve high profitability, small and medium paper bag making and printing enterprises must pay attention to hidden costs

by:Jialan Package     2021-04-12


Regarding some small and medium-sized paper bag making and printing companies, their main means to control costs is to purchase cheap consumables and use cheap workers. However, they have lost the most critical quality and efficiency in the life of the company, leading to poor returns or slow development of the company. In fact, this is the result of typical corporate decision-makers focusing too much on explicit costs and ignoring the hidden costs.



Imagine that in a paper bag manufacturing company, time is efficiency and time is benefit. The low-cost consumables are usually products that are suitable for paper bag making or products that do not match the production technology, which inevitably requires more time to deal with the problems caused by these poorly adapted products during the production process. The actual explicit cost paid is low, but the hidden cost (the cost of losing time efficiency) has increased significantly. Moreover, the proportion of consumables in paper bag making and processing is negligible compared to the time efficiency gains. Therefore, this way of reducing costs can be said to be more than a loss.



The time consumption we mentioned above is only one of the hidden costs. Other losses such as service life, energy consumption, quality and other derivative costs, etc., plus the intangible losses caused by this, corporate reputation , Self-confidence of employees, etc. How to treat all these things that cannot be reflected in actual costs.



Therefore, we believe that when paper bag manufacturers choose various paper bag materials, they should not blindly seek low prices and ignore its additional costs. More attention should be paid to the hidden costs. The materials that are most suitable for the design and performance of the company's own equipment and the operating habits of the technicians should be selected, so that the equipment and personnel can operate in the most coordinated and smooth manner. This kind of good cost brings real efficiency and benefit, is a real manifestation of value, and should be what we usually call cost-effective.



In the cost structure of paper bag manufacturing companies, some are small costs and large values. Excluding paper, ink, and PS plates, the remaining consumables account for a negligible proportion of the cost. We have made a rigorous estimate that materials such as rubber rollers, water tank fluid, blankets, car wash water and other chemicals account for no more than 1.5% of the cost of paper bag manufacturing enterprises. However, these materials have a significant impact on the product quality and production efficiency of paper bag making and printing enterprises, which is the so-called small cost and great value.


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