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I Table of Figures
Paper Snaps The paper attachment revolution of the 21st century Team 2 Enterprise LLC Yashar Ganjeh
Kenneth Arnold
Ma Yuan
For a moment, try and see how many staplers are used in your company, school, or university.
Then try and estimate how many staples are used daily with those devices. Chances are you
would estimate a great number. Where do all those staples go once they are no longer of any
use? Even more, how can you recycle those small metal pieces along with the paper? The
negative effect on the environment is appalling. Our company has come up with a solution that
will greatly decrease the environmental impact of these staples and will also offer far greater
convenience and functionality compared to the competition. After reading this report, you surely
will wish for you own box of paper Snaps!
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II Paper Snaps
TABLE OF CONTENTS
1. Execuitive Summary .............................................................................................................................. 1
1.1. Nomneclature .................................................................................................................................. 1
2. Vision and Rationale ............................................................................................................................ 2
3. Why aper Snaps? .................................................................................................................................. 2
3.1. What are Paper Snaps? .................................................................................................................. 2
3.1. Staples: Environmental Assessment ............................................................................................. 2
3.2. Staples: Functional Analysis ......................................................................................................... 3
3.3. The Need for Paper Snaps ............................................................................................................. 4
4. Users and Stakeholders ....................................................................................................................... 4
4.1. Users ............................................................................................................................................... 4
4.2. Stakeholders .................................................................................................................................. 5
4.3. Needs and Preferences .................................................................................................................. 5
4.4. Points of View: Primary Customers ............................................................................................. 5
4.5. Future Expansion: Secondary Markets ........................................................................................ 6
5. Previous Designs .................................................................................................................................. 7
6. Design: Requirements and Variables .................................................................................................. 7
7. Product Description ............................................................................................................................10
7.1. Conceptual Design Process ..........................................................................................................10
7.2. From Concept to Prototype .........................................................................................................10
7.3. The Final Design: Paper Snaps Defined ...................................................................................... 11
8. Design Optimization .......................................................................................................................... 12
8.1. Objective Function ....................................................................................................................... 12
8.1.1. Manufacturing System ........................................................................................................... 12
8.2. Constraints and Variables ........................................................................................................... 16
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III Table of Figures
8.3. Formulation and Solution........................................................................................................... 16
9. Engineering Analysis and Form ......................................................................................................... 17
10. Business Strategy ...............................................................................................................................18
10.1. Market Research ......................................................................................................................... 19
10.1.1. Industry Definition ............................................................................................................... 19
10.1.2. Segmentation ....................................................................................................................... 19
10.1.3. Internal Competition ........................................................................................................... 20
10.1.4. Barriers to Entry ................................................................................................................... 20
10.1.5. Regulation ............................................................................................................................. 21
10.1.6. Cost Structure ....................................................................................................................... 21
10.1.7. Key Success Factors ............................................................................................................. 22
10.1.8. Future Trends and Growth ................................................................................................. 22
10.2. Marketing Planning ................................................................................................................... 23
10.2.1. Market Share ........................................................................................................................ 23
10.3. Product Invention Strategy and Market Needs Triangle ........................................................ 23
10.3.1. Competitive Advantages ...................................................................................................... 24
10.3.2. Differentiators ..................................................................................................................... 24
10.3.3. Price of Entry ....................................................................................................................... 25
10.4. Microeconomic Analysis ........................................................................................................... 26
10.4.1. Net Present Value ................................................................................................................ 26
10.4.2. Conclusion ........................................................................................................................... 27
10.5. Advertisement Campaign .......................................................................................................... 27
10.6. Packaging Design ....................................................................................................................... 28
11. Concluding Remarks ......................................................................................................................... 28
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IV Paper Snaps
TABLE OF FIGURES
Figure 1 - Venona during a busy day .............................................................................................. 5
Figure 2 - Jose investigating a new shipment ................................................................................. 6
Figure 3 - Ellsworth during a press conference .............................................................................. 6
Figure 4 - Steven, the day he opened his business .......................................................................... 6
Figure 5 - Vast array of options available for attaching papers ...................................................... 7
Figure 6 - The first male/female stapler concept .......................................................................... 10
Figure 7- Paper snaps: Proof of concept ....................................................................................... 11
Figure 8 - Schematic Diagram of Injection Molding Process ....................................................... 13
Figure 9 - Sample results for a given density ............................................................................... 14
Figure 10 - Relating carbon footprint and cost per box to strength .............................................. 15
Figure 11 - Paper Snaps: Shrink fit and threaded designs ............................................................ 18
Figure 12- Industry information .................................................................................................... 19
Figure 13- Industry segmentation ................................................................................................. 19
Figure 14- Cost structure of the industry ...................................................................................... 21
Figure 15- Industry revenue .......................................................................................................... 22
Figure 16 - Market needs triangle ................................................................................................. 24
Figure 17 - Initial investment and annual costs ............................................................................ 26
Figure 18 - Net present value of paper snaps for 5 and 10-year terms ......................................... 27
Figure 19 - Packaging design ........................................................................................................ 28
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1 1. Execuitive Summary
1. EXECUITIVE SUMMARY Team 2 enterprise was founded with a vision of the future. The core focus of the company is
designing sustainable products for the future generations. The company did extensive research
on different possibilities in this area and has now come up with a feasible solution to a very
simple and yet widely used product.
The vast array of sustainable solutions that is offered today usually focuses on problems with big
effects on the environment and often underestimate the effect simple designs can have. The focus
of team 2 Enterprise LLC has been on the office supplies. Our first product is going to replace
the conventional staples along with the various kinds of staplers and staple removers that are
normally used with them. Our estimate shows that in University of Michigan – Ann Arbor only,
roughly 460 metric tons of metal goes to waste by the use of staples (not considering the material
required for manufacturing of staplers). If all the households and organizations, which use
staplers, are considered, we are faced with an enormous number. This metal waste cannot be
recycled with the paper itself either.
On the other hand, staples, once used are a permanent joint and cannot be removed. Our design is
going to address all these obstacles and offer a more convenient alternative to the conventional
staple/stapler. We are going to produce paper Snaps that cost approximately $2.5 per 200-box,
which is lower than the price of the staples currently in use. This estimate takes into account the
costs associated with the injection molding process, material, labor, and facility lease, and is
obtained from the careful consideration of tradeoffs in our design and using an optimization
method to obtain the best balance between these tradeoffs.
An intricate market research was done and results were used to document the company’s future
market strategies. Product invention mapping technique was used to identify the competitive
advantages of our product over the competition. Our microeconomic analysis results in a positive
net present value of about $97,000 and $50,000 for 5 and 10-year terms respectively, which
proves that the product is worth pursuing. Our profits are going to meet our expenses by the end
of the 2nd
year of our production, which would be our breakeven point.
Our advertisement campaign seeks to address the different benefits of the paper snaps indirectly,
and the environmental friendliness of our product was considered in our package design. Future
changes in design are also considered to make the paper snaps more compatible with different
paper capacities.
Taking into account the reusability of our product and its environmental friendliness, this product
is going to both peak the attention of price-sensitive and environmental conscious customers.
1.1. NOMNECLATURE
Price of a 200-box of snaps.
Flexural strength of material used.
, Sensitivity of market demand to carbon footprint, assumed to be 1000.
Net present value.
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2. VISION AND RATIONALE
Paper attachment is a necessity in schools, universities, offices, and households of almost
everyone. Depending on the number of papers, different products have been offered in the office
supplies industry. Yet, considering ever-increasing consciousness among people about the
climate crisis, no viable solution has been offered to reduce the waste of staples. One reason may
be the fact that they are so tiny that oftentimes they escape the attention of their users; however,
this was not the case with Team 2 Enterprise LLC, with a vision of the future, this company is
going to reinvent the way people attach their papers together. Our solution is both more
convenient and more “Green”. In the long run it is going to prove to be more cost saving too.
Our vision for the future is a world with no conventional staplers, and zero waste because of
metal staples.
3. WHY PAPER SNAPS?
Stapling is currently the most common form of quick paper assembly because it is quick, easy,
and precise. It is intuitive to load and fairly cheap to resupply. The need for assembling paper
will exist as long as sheeted paper is used. In order to compete, our reusable fasteners meets
existing user standards of ease, precision, and speed, while addressing environmental and
functional issues that are currently plaguing the staples and their alternatives.
3.1. WHAT ARE PAPER SNAPS?
Our product, Paper Snaps complies with International Standard 838 which determines the
diameter of the hole punched with a generic hole punch, whether it is a single, three hole, or a
high capacity punch. Our product would remove the need for staples, staplers, and staple
removers in the office work environment. Intuitive to use and completely reusable, Paper Snaps
simplify the paper attaching process by letting the user use only three fingers to snap papers
together. Our final product can be made from Treeplast, a sustainably grown, biodegradable,
injection molded wood material. Not only are Paper Snaps reusable and removable, but also
improve the quality of paper recycling by providing additional wood into the mix. Try it out
today, they’re a Snap!
3.1. STAPLES: ENVIRONMENTAL ASSESSMENT
The most common material for the production of staples is zinc coated steel. The production for
sulfide zinc ores produces large amounts of sulfur dioxide and cadmium vapor. Smelter slag and
other residues of process also contain significant amounts of heavy metals. About two thousand
years ago emissions of zinc from mining and smelting totaled 10 kilotons a year. After increasing
10-fold from 1850, zinc emissions peaked at 3.4 megatons per year in the 1980s and declined to
2.7 megatons in the 1990s, although a 2005 study of the Arctic troposphere found that the
concentrations there did not reflect the decline. Anthropogenic and natural emissions occur at a
ratio of 20 to 1.1
To see of how much material goes to waste by using staples a rough estimate was made.
University of Michigan – Ann Arbor has 41,042 students and 2,650 professors; we estimated that
1 http://en.wikipedia.org/wiki/Zinc#Environmental_impact
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3 3. Why paper snaps?
with staff, there are currently 46,000 people, who are potential users of staples. Now if we
assume that only 50% of these people use staples and that in each given year they only use 10
staples, this amounts to the following number of staples used; notice that all these estimates are
all really conservative and the number of staples used by students, faculty, and staff is most
probably far greater than this estimate, as is the number of people in University of Michigan:
If each staple is 2 grams, this will result in 460 metric tons of metal gone to waste. Now if 4 facts
are considered, the need for a sustainable alternative to conventional staples will easily be
realized:
1. There are an enormous number of schools, organizations, and universities in US and in the
world.
2. The average number of staples used by each person in each given year is usually far greater
than 10.
3. There is also material used in the fabrication of stapler devices and also the staple removers,
which were not considered here. Both staplers and staple removers, require an additional set of
resources to be manufactured.
4. The stapled paper cannot be readily recycled, without first removing the staple from it. Since
the staples are made from metal and cannot be recycled through the same recycling process
along with papers; this adds undesired complexity to paper recycling process.
3.2. STAPLES: FUNCTIONAL ANALYSIS
Apart from the environmental impact staples have, there are also some functional problems
associated with them. These problems can be realized by mere observation of the staples. The
first problem is the fact that staples fasten the papers together, permanently. To remove them
from papers, you need yet another device, and it cannot be done with your bare hands. A solution
that has existed for a long time is paper clips; try to use them with more than 4-5 sheets of paper
and you realize that you will not be able to flip pages without separating them from each other.
They are also in general not as strong as staples in keeping the paper together. All of these
functional shortcomings will all be addressed by Paper Snaps.
To summarize, in addition to environmental aspects, the following are the functional and
ergonomic shortcomings of conventional staples:
1. They require the use of separate devices for both fastening and unfastening the papers.
2. Once used, they cannot be removed without some sort of a staple remover, whether the user
uses a knife, or a device designed to remove the staples.
3. The existing alternatives, namely paper clips, sacrifice some of the functionalities of the
conventional staples for the sake of other functionalities.
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3.3. THE NEED FOR PAPER SNAPS
We have reinvented the way people are going to attach papers together; our design addresses all
of the associated shortcomings with the staples that were listed above; our goal summarized in
one phrase would be:
"To eliminate waste produced by the excessive use of materials that currently attach paper."
The central concept of the design is the ability to reuse paper fasteners to eliminate waste from
the process of attaching; however, as mentioned at the beginning, in the process many
shortcomings of conventional staples and their alternatives will also be addressed.
4. USERS AND STAKEHOLDERS
4.1. USERS
In trying to focus on a type of user the wanted to encompass as much of the work force as
possible. In that regard we looked at different types of workers as well as work environments. In
the beginning of production we will initially just focus on the small business segment of the
office tool/stapler market.
As diverse as the “office employee” is, so should our design take into account the average
worker, not the CEO, but rather the workers on the floor. We did not limit ourselves to specific
types of offices but rather we looked at a range of offices from architecture to publishing, and
blue collar to white collar. The question we posed to ourselves took the form of a narrative.
“Here is that report you asked for, Bob.” “Thanks”. That mini dialogue seems like an ordinary
office encounter, which is exactly what we wished to focus on. The appeal of the narrative
allows us to ask questions about how that transaction takes place, for example: How does Bob
receive the files? Are they stapled, paper clipped, or in a folder? What is Bob going to do with
them? Will he pass them on to Paul or will he file the report for himself, and how does he do
that? By asking these types of questions it enabled us to find the details of our product more
clearly. The answers we came up with pointed us in the direction of a self-contained office
assembler unit. Something that would not wear out and could complete all of your paper related
organizational tasks. By offering a product that sits on the desk of an average employee we have
created a user from almost every single office employee. However the problem that arises is the
probability that large offices are already stocked with ample amounts of staplers or paper
adhering solutions. The need to attach paper is not so great that a consumer generally buys
multiple staplers to diversify his or her collection. Rather a new stapler is only bought when the
old one fails. Other than that the only other cyclical purchases are staples.
This last issue caused the company to ask itself a question: What if you don’t need the stapler at
all? What if you should not worry for your stapler to jam and fail? What happens if you remove
all the staplers and staple removers from offices? Is there going to be a demand for this
alternative?
As mentioned earlier, to counter the lack of demand for new paper attaching products in a large
office environment, the initial primary market consists of small businesses. Because of the scale
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5 4. Users and Stakeholders
of their operation, small businesses generally have the bare minimum of supplies necessary so
they would be likely to be more frequent purchasers of office products.
4.2. STAKEHOLDERS
Our stakeholders are those who are invested in the future success of their company. The primary
feature of our product is the elimination of waste from the paper attaching process. This is not an
exaggeration but an extension of our overarching goal of improving the office environment in a
more sustainable way. Without the pressure from external forces, if a company has any long-
term plans, sustainability must be a primary tenant of that. Sustainability offers those who
partake in it guaranteed success in the future by turning the elimination of waste in to improved
public image and profit. Paper Snaps achieve this by removing the need for both a stapler and a
staple remover, and also the need for a continuous inventory of staples (since Paper Snaps can
be reused), thus saving money. True sustainability will clearly not only be cured by our product
alone, but companies with the foresight to alter their infrastructure in terms of becoming less
wasteful, will undoubtedly become more profitable. Creating a reusable fastener that costs the
same as conventional staples (without the added cost of stapler and staple remover devices), is a
positive way to progress towards the ultimate goal of sustainability. Also these reusable fasteners
can be made from relatively cheap biodegradable materials like Treeplast that can be recycled
along with the papers through the same recycling process. This option will be appealing for
agencies with a large level of bureaucracy that require keeping the stapled documents in their
archives and may not afford to separate the staples from each other and reuse them. This way,
their old archives can easily be recycled with a positive or at the very lease neutral influence on
the environment, since Treeplast is made from real wood.
All this allows the individual employee to feel good about their involvement in the process
because they are helping to create a more sustainable work environment by seizing the chance to
eliminate waste from one portion of their job.
4.3. NEEDS AND PREFERENCES
In an effort to find out what met the needs of office employees, we went around to find office
environments around North and Central Campuses, and phoned people who worked in diverse
office environments to get a feel for various work environments and daily activities within them.
Our research showed that all office employees are looking for greater efficiencies within the
work environment. Many use tools (such as staplers, hole punches, etc.) on a regular basis to
help them organizationally and allow them to send important documents in bulk to other work
members. Many office employees have personal desk accessories which provide emotional
support during a stressful work day.
4.4. POINTS OF VIEW: PRIMARY CUSTOMERS
4.4.1. Venona, 43: Assistant Director of Marketing for JobCorp.
Venona has a corner office on the seventh floor in a
renovated building in downtown Chicago. Every day she
answers hundreds of emails and writes marketing reports for
Figure 1 - Venona during a busy day
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meetings she has with other JobCorp employees about the future success of JobCorp. She has a
collection of little dolls and knickknacks that give her respite from the sometimes-stressful
requirements of her job. She has a happy disposition but her desk mates offer her a happy feeling
when she is feeling down. When she feels happy she is more productive and efficient at her busy
job.
4.4.2. Jose, 23: Managing Director for Warehouse Inventory.
Jose immigrated to the United States to find a job where he had
respect, responsibility, and authority. He manages the inventory
in the warehouse for a small but high-end paper company. He is
responsible for keeping track of all of the items in the back and
files daily reports which detail what new products are being
shipped out and sent in. The report length varies but is always
many pages long. Jose also organizes his records of reports in
large three ring binders.
4.4.3. Ellsworth, 78: CEO of News Transcontinental.
Meet Ellsworth. He is the CEO of a well-known international news
corporation. At least 10 trees have been cut to make his office desk, and 40
cows were slaughtered to furnish his office. His opponents hate him, but as
long as he makes profit, he can't care less. With all the advances in
technology, he sticks to traditions and requires his two secretaries to have
the various daily, weekly, and monthly reports typed and in separate folders,
on his desk, when he arrives his office in the morning. These documents
should all be kept in archives for the next 10 years. Although he is a
traditional type of fellow, if he sees the chance that his employees are going
to cost him less, he will not hesitate to grab it.
4.4.4. Steven, 52: Small business owner.
In a backwater upstate New York town, Steven is trying to make his small B-to-B distribution
company as environmentally conscience as possible while saving money in the
process. He investigates all current opportunities to lower the overhead cost of
internal infrastructure for his company and is excited at any new office tool. He
immediately recognized the strength of having the ability to reuse the fasteners
and appreciated the possibility of letting the “waste” biodegrade back into the
earth.
4.5. FUTURE EXPANSION: SECONDARY MARKETS
Not only the paper snaps are going to be able to capture the market of small and large businesses,
but also after the proper brand awareness is established our company can expand its customer
base to other socioeconomic groups. For example, many schools, universities, and education
Figure 2 - Jose investigating a new shipment
Figure 3 - Ellsworth during
a press conference
Figure 4 - Steven, the day he
opened his business
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7 5. Previous Designs
organizations use punches and staples on a daily basis; large businesses should also be
considered after the brand awareness is established. These organizations will provide the
company with an even larger target market. The company’s plan is to first penetrate the market
by introducing the paper snaps to small businesses and then after sufficient market share is
captured expand the market to other groups.
5. PREVIOUS DESIGNS
There are various staples and paper clips in different colors, shapes, forms, and designs in the
market; however, none of the offers the functionality of our design. Figure 5 just shows some of
these products.
There are also some other options that are not shown here; one example is the stapler that does
not require any fasteners and just deforms the paper to do the fastening; however, this product is
quite inconvenient and the reviews have not been positive. The other option is the small metal
pins that can be bent and fasten paper; those products also fail to offer the functionality and
convenience of our product and as they are made out of metal they are not sustainable and have
the same environmental problems as staples do. They are much like paper clips, with all their
aforementioned shortcomings.
6. DESIGN: REQUIREMENTS AND VARIABLES
Our goals for this product are to meet the ergonomic needs of the user while maintaining a high
standard of quality and functionality. Our goals are also to create a product that not only reduces
waste in the office, but also uses materials which have minimal environmental impact. In
addition to ergonomic comfort we would like to make the use of the product as easy and simple
as possible. There are also other specific objectives and requirements that are going to be
Figure 5 - Vast array of options available for attaching
papers, all of which are not sustainable
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8 Paper Snaps
considered. While some of them will be implemented in the design optimization, the others are
considered while designing the form and function of the prototype. These requirements are:
1. Price
2. Sustainability
3. Functionality
4. Packaging
5. Manufacturability
6. Ergonomics
7. Aesthetics
1. Business Design Objective: Price
For our business design objective, we choose the simplest of metrics, the price. Our choice of
manufacturing system shows us that the price of our final product is less than the conventional
staples that are currently in use (section 8.3). Because our product saves the user money by
eliminating the need for a separate device to fasten or remove the staples, and, unlike the
competition, will be reusable, our design can easily meet the design constraint.
2. Sustainability
Sustainability is the core characteristic of the paper snaps and the image it provides for the
environmentally conscious customer is an invaluable asset on its own. We used the carbon
footprint of the material we are going to use, both in making the material and in processing it
with the manufacturing process we chose, as one of our design variables, which is going to
influence the demand. This way we incorporated some aspects of sustainability as one of the
design variables. Also, the reusability of paper snaps is another factor the makes them more
sustainable; however, this factor does not lend itself easily to quantification. It is considered
indirectly by choosing a moderate flexural strength for the material to make it stronger against
deformation. Strength against deformation helps to make the snaps more reusable.
3. Paper Capacity (Functionality)
Our final product should have the same or better functionality compared to the conventional
staples. The main functionality of our product is attaching papers. So, the number of papers our
design is going to be able to handle is an important factor. This is not a very rigid objective and
will largely depend on user’s decision about the size of the Snaps used; the larger the size, the
higher the number of papers it will be able to handle.
This functionality can be converted into a design variable by considering the flexural strength of
the snaps. Flexural strength, also known as modulus of rupture, bend strength, or fracture
strength, a mechanical parameter for brittle material (plastics), is defined as a material's ability to
resist deformation under load.
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9 6. Design: Requirements and variables
4. Packaging
Because our major concern in designing this product is sustainability, we want to the minimum
required (or no) packaging, to reduce the environmental impact of our product as much as
possible. Also, the packaging can be made from recycled material. A picture of the packaging is
shown in figure 18 in section 10.6.
5. Manufacturability
Cost effective manufacturing systems are an integral part of any product; just to spend time
designing a product without caring about the manufacturing limitations will either result in a
product fit for science fiction books or a product that will be too expensive to consider. For this
reason, we are going to consider manufacturing limitations as an integral part of our design.
Injection molding process is suitable for the paper snaps. By choosing this process, we are able
to estimate the cost of each part with a great precision. This way the manufacturing limitations
can indirectly be introduced into our optimization problem as a dependent design variable in
conjunction with the flexural strength of the material.
6. Ergonomics
As will be shown the Snaps can easily be separated with minimal effort; however, they cannot be
separated from each other unless the user decides to separate them. The ergonomic aspects will
be considered in more depth later in section 9.
7. Aesthetics
Aesthetics is an important factor for any successful product. Even though paper snaps are really
small, there is a great room for designers to work on its aesthetics, and this is one the major
differentiators of the snaps from the competition. More will be elaborated on section 9.
Other Considerations
Every successful product should include three stages:
1. Product design that can have an edge over the competition (section 7).
2. Suitable manufacturing system that will produce as many products at the exact time they are
needed at a profitable price (section 8.1.1).
3. Strong marketing strategy (section 10).
These three stages closely depend on each other, without one of them the other two will fail.
These aspects were all carefully considered and are presented in the next sections. The product
description and the conceptual design process is considered in section 7, the manufacturing
system and its costs are briefly mentioned in section 8.1.1, while the marketing strategy is a
major part of our business plan, which is presented in section 10.
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7. PRODUCT DESCRIPTION
7.1. CONCEPTUAL DESIGN PROCESS
Team 2 Enterprise LLC investigated a wide variety of solutions before we came up with the
optimal one. The process first began by investigating different ways by which the company
could modify the stapling devices, mainly staplers. These ideas evolved from multifunction
devices that combined the functionalities of staplers, punches, and staple removers at first, to
alternative ways to attach papers together in the later stages; ideas ranged from gluing papers
together or injecting the glue by use of a needle to a male and female fastener. At some stage of
design, the company also considered sewing the papers together and different types of electrical
and manual sewing machines were investigated through reverse engineering. Pugh charts were
created and the final concept that seemed the most promising was the male/female fastener
shown in figure 6:
Figure 6 - The first male/female stapler concept, which ultimately resulted in the Paper Snap
7.2. FROM CONCEPT TO PROTOTYPE
After the male/female fastener was chosen as the final concept the company began considering
making a variety of prototype to find the one, which is most promising. The main functionality
that defined each prototype was the nature of fasteners. At first the idea began with the simple
male and female bolts that fit into each other that a device not much different from the
conventional stapler will fasten together; however, at certain point the company realized that the
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11 7. product description
design would be much more simpler, cost effective, and most importantly “true to its original
goal of sustainability” if we completely remove the device from the concept and focus on the
fasteners themselves, and that was how the paper snaps were born.
7.3. THE FINAL DESIGN: PAPER SNAPS DEFINED
Meet paper snaps, the staples of the future. The snaps are either male or female, and fit perfectly
into each other; they just snap. These can clearly be seen in figure 7. The CAD models are shown
in section 9.
Our final design has many significant advantages over the existing competition, which are:
1. This product works with the standard holes produced by a conventional punch. It will fit easily
into the hole. They will not require a separate device for stapling or removing the staples. This
way the need for staplers and staple removers is removed and there is no longer a need for
resources and material that goes to waste in making those devices.
2. Unlike staples it can be used over and over again. This will greatly help the environment.
There would be no more metal waste due to the release of Zinc, a heavy metal into the rivers and
that allows fish to breathe easily. Some alternatives to staples are also made from Zinc coated
metals and will not do the environment any good.
3. Unlike the paper clips, customers can flip the pages without running the risk of dethatching the
papers from each other. They may even choose to spin the papers around the snaps instead of
flipping them.
4. Unlike metal staples it is not sharp and will not hurt the users.
5. In case that our product is used by a large business that cannot afford to remove the snaps
from their documents one by one, the biodegradable option makes it possible for our product to
be thrown out and recycled with the paper; unlike conventional metal staples there would be no
complications imposed on the recycling process because one cannot recycle the metal along with
papers.
Figure 7- Paper snaps: Proof of concept
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8. DESIGN OPTIMIZATION
8.1. OBJECTIVE FUNCTION
Our company needed to address the different tradeoffs between the design variables to come up
with the optimal design; these tradeoffs were considered in our objective function. The objective
function considers two main design variables:
1. Price
As stated in section 6, price is going to be considered directly as one of our design variables. The
difference between price per part and cost per part will result in profit per part. For estimating the
cost per part we need to consider the material we are going to choose and the manufacturing and
labor costs.
2. Flexural Strength
The number of cycles each snap will go through is much less than the number required for the
conventional fatigue analysis methods. Because the minimum number of cycles that is needed
for fatigue analysis is 1000, and the snaps will not go through that many cycles; for this, and also
to keep our optimization problem simple, we chose flexure strength as the other design variable,
which directly affects the reusability of paper snaps.
Our objective was to increase profit and our product’s sustainability at the same time; as stated
earlier, that could be done by two ways: First, we should increase the flexural strength of the
paper snaps in order to make them more durable and increase their reusability; second, we want
to decrease our products Carbon footprint as much as possible. The tradeoff of our design rises
directly from this point of view. The company first needed to consider the choice of material and
manufacturing process to estimate the cost.
CES was used extensively to choose a product for our initial design; the Treeplast was not
considered at this point since it is one of the future expansion strategies of the company. The
results of the CES are offered in Appendix A.
After having decided on what material to use, the company decided to use injection molding as
the manufacturing process.
8.1.1. MANUFACTURING SYSTEM
The choice of the manufacturing process is considered here. The mold can be created quite easily
and duplicated to be used extensively for our product. The injection molding process will be
elaborated here.
Injection Molding Process
In the injection molding process granules (or powders in case of powder injection molding) are
fed into a spiral press where they mix and soften to a dough-like consistency that can be forced
through one or more channels ('spures') into the die. The polymer solidifies under pressure and
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13 8. Design optimization
the component is then ejected. Thermoplastics, which we are going to use for our bottle, can be
injection molded. A schematic diagram of the process is shown in the figure. The injection
molding process can manufacture all part shapes and has no limitations in this regard.
Factors that largely affect the cycle time
of the injection molding process are the
thickness of the part designed and the
thermal diffusivity of the materials used.
This information can be used to design
the manufacturing system of the product
later.
There are also many factors that influence
the cost of injection molding process.
Apart from the material chosen, which
directly affects the cost; these other major
factors also affect the cost of each part:
The number of cavities, the runner
volume, and part volume.
Cavities are the enclosed space between
two mold halves which form the shape of the desired part. Often times, molds are designed with
more than one cavity, allowing multiple identical parts to be molded in one cycle. The most
common number of cavities is 1, 2, 4, or 8.
The runner is a channel in a mold that delivers the molten material to the mold cavities. Part
volume also increases the cost per part directly.
The cost estimator for standard injection molding2 was used to estimate the cost per part of each
of our components. We used the estimator in conjunction with CES software to estimate the
manufacturing cost of injection molding process; this estimator includes the following factors to
estimate the price of each part:
1. General properties of the process: These include the intended quantity, defect rate, and the
number of cavities. The values chosen for these are shown in figure 9. It should be noted that
injection molding is highly reliable and defect rate is very low.
2. Material: The material, its price, and density were all selected from CES. Part volume was
estimated from the CAD models and the prototypes, and an assumption was just made for the
runner volume. Same is true for regrind ratio as seen in the table.
3. Production: All the estimates in this part were assumptions and further analysis for this part
was not possible in our time frame.
2 http://www.custompartnet.com/estimate/injection-molding-std/
Figure 8 - Schematic Diagram of Injection Molding Process
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14 Paper Snaps
4. Tooling: Mold cost was estimated from previous experiences on injection molding process.
Our assumptions about the labor costs are shown in figure 9. Since they only add a little to price
per part, when the labor cost is divided by the number of parts that we are going to produce, our
assumption will not reduce the accuracy of our results greatly. This would result in a
conservative price estimate as we overestimated the labor costs per hour. With this combination,
we could estimate our manufacturing cost per part and by changing the volume produce the cost
vs. volume chart that was used in our optimization. Figure 9 shows a sample result for one given
density:
Part Information
Quantity: 10000000
Material: Polyethylene (High Density,
Homopolymer)
Weight (oz): 0.011
Process Parameters
1. Injection Molding
Material
Defect rate (%): 5
Material price ($/lb): 0.57
Part weight (oz): 0.011
Regrind ratio (%): 50
Include defects: Yes
Cost to regrind ($/lb):
Purchase weight: 22000
Production
Hourly rate ($/hr): 5
Machine uptime (%): 90
Tooling
Number of cavities: 200
Mold cost ($): 50000
Cost Summary
1. Injection Molding $62,428 ($0.006 per part)
Material cost $12,428 ($0.001 per part)
Tooling cost $50,000 ($0.005 per part)
Total cost $62,428
Figure 9 - Sample results for a given density
Our cost per part is around $0.006 per pair in this sample, but there certainly would be additional
costs, like facility and taxes which we didn't take into consideration for optimization analysis.
Some of these variables are to be considered in microeconomics analysis.
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15 8. Design optimization
We chose different flexural strengths resulting in different densities for the same number of
parts; this allowed us to plot the chart of price per part versus flexural strength; this way we have
the cost per part as a function of strength. This chart is shown in figure 10.
Having the price per part as one design variable and subtracting the cost per part as a function of
flexure strength from it, we get the profit per parts as a function of our design variables. In order
to complete our objective function, we’ll need to model the market demand, and for this
customer data is required; however, as our product was changed at a very late stage of design,
our customer data from surveys are no longer of any use; for this reason, we used a modified
version of classical mass production model.3
In this model market demand is inversely
proportional to price, and lower prices translate to higher demands. As we are producing our
product in very large number, using the mass production manufacturing paradigm model has
credulity.
Also, to include sustainability in our model, we assumed that our product’s demand will fall by a
1000 units for each unit of Carbon footprint; data from CES were used extensively. We assumed
that a linear relationship exists between the Carbon footprint of the material, which is generated
both the footprint from production of material itself and the footprint from processing it through
injection molding, and the flexural strength. The results were plotted and are also shown in
figure 10. It should be noted that the relations on these charts apply to a 200-box of paper snap
pairs and not one single product. Considering only one pair would have resulted in unwanted low
tolerances, which were out of bounds of our optimization solver. Also, the standard conventional
staples come in boxes of 200, and this way it is possible to directly compare our product with the
competition.
Figure 10 - Relating carbon footprint and cost per box to strength
As a result, our final objective function took the following form:
3 Y. Koren, The Global Manufacturing Revolution, John Wiley & Sons, 2009.
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16 Paper Snaps
The nomenclature can be found at the beginning of the report, in section 1.1. Notice that the
fixed costs were removed from the objective functions, since they are considered in the
microeconomic analysis. The above objective function shows the tradeoffs between our design
variable. High strength is desirable in our design; however, higher strength results in higher costs
and lower profit which is undesirable. On the other hand, higher strength will hurt the
sustainability of our product by increasing its Carbon footprint and will reduce the market
demand. Our solution is going to address these tradeoffs.
Also, a more precise approach would have been to use iterations to update the aforementioned
charts after each optimization, but since the numbers are small as is, and there was no time, this
was not done.
8.2. CONSTRAINTS AND VARIABLES
We used only one constraint for the Carbon footprint as follows:
This value is lower than the average for thermoplastics. Considering that our product is going to
be environmentally friendly through reusability, this assumption for our constraint is easily
justified.
Our design variables, product’s price and strength, were bounded as follows:
The price constraint states that at the worst case price should equal the manufacturing cost; the
strength was assumed to be greater than the average strength of the material used.
8.3. FORMULATION AND SOLUTION
Now that we have the objective function and constraints, we can write the problem in standard
form and solve it:
Subject to:
MatLab’s fmincon algorithm was used to solve the problem; the results are as follows:
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17 9. Engineering Analysis and Form
This accounts to roughly 30,000 boxes to be made at the beginning as we are entering the
market. This was obtained by entering the values obtained for our design variables into the
demand equation.
In this solution only is the active constraint; we choose $2.5 for the price of box of 200
paper snaps, which our economic analysis is going to be based on.
The results show that lower costs and Carbon footprint are preferred to higher strengths and thus
the solution chooses the lower bound (minimum) of strength, making its constraint active.
9. ENGINEERING ANALYSIS AND FORM
Our product is meant to be the replacement to staples. As such there are rigorous standards in
place to make our product superior or competitive. Standard zinc plated steel staples have 6mm
of “tooth” that can breach the paper and then be folded backwards to remain fastened. The power
to breach the paper comes from the staple in combination with the mechanical force of the
stapler. Our product is of comparable size (9 mm) and relies on the mechanical force of a hole
punch; however, the fasteners themselves do not breach the paper, rather they fasten through the
hole left by the hole punch.
Our model has gone through 5 phases, each time getting smaller and addressing the problem
more aptly. In more advanced forms the Paper Snaps don’t actually snap together rather they
merely thread inside one another. The trade off with snapping versus screwing is that snapping
requires various sizes of fasteners depending on the paper capacity. Screwing or threading has no
minimum amount of paper required; in fact, one can twist the female fastener completely shut or
leave space for as little as two sheets of paper. There are tradeoffs with this design. It is possible
through extreme maneuvering to separate the two halves by accident. To counteract the
possibility of that occurring we will create a tight enough friction fit to minimize the chances of
that occurring.
In addition there is also slightly more time invested in order to twist the two fasteners shut. To
improve the speed at which this is accomplished, both parts of the fasteners have been designed
to fit snuggly with two fingers so that your fingers do not slip in the process of attaching your
papers, thus speeding up the process. The advantages of this design allow for a “one-size fits
all”.
In case there is a high volume of papers that need fastening our device can expand to
accommodate that need. On average manual hole punchers max out their paper punching
capacity around 80 or 90. That mount is taken into consideration in this design. If these fasteners
were to be used in conjunction with high capacity (180- 200 page) electric hole punches, then a
model would need to be produced that could accommodate such a need. Fortunately this is
simply a matter of scale and our fastener could be scaled up to even 1000 sheets of paper, if
strength limitations are neglected; however, because stapling is used for anywhere between 2-50
sheets of paper regularly, our current model only allows up to 8.5 mm of paper attachment
(roughly 90 – 100 sheets).
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18 Paper Snaps
In the next design parts of the actual fastener will be scaled up to 3 mm thickness in certain parts
because our fasteners are not made out of steel, rather they are made out of injection molded
wood (Treeplast). Treeplast has a minimum thickness of 3 mm so our design needed to take that
into consideration. Our product dimensions are approximately 9 by 9 by 3 square millimeters.
The cumulative volume is 468.6 cubic millimeters for all of the solids in the 3D model.
The aesthetics of the product were completely driven by the functional requirement and
alterations to improve the ease of use. By its nature the product is symmetrical which suggests
order to humans on a subconscious level and humans are innately attracted to order and we seek
to create and see it whenever possible. Proof of this attraction comes from applied Gestalt
psychology and spatial organizational studies. At the end different designs of paper snaps, each
realizing a group of customers’ needs are shown in figure 11.
Figure 11 - Paper Snaps: Shrink fit and threaded designs
10. BUSINESS STRATEGY
A good marketing strategy is an integral part of every product. The main outcome of our
optimization model is that now we know the optimal number of products that will produce the
most profit, and we also know the price at which this profit becomes possible.
We have not really answered one important question yet: "Why should, with all its benefits, the
customers be interested in our product?" To answer this question we have done a thorough
market research, which will help us identify our competitive advantages over the competition by
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19 10. Business strategy
means of one of the various marketing models (namely product invention mapping and
establishing market needs triangle).
10.1. MARKET RESEARCH
We used references from business library4 for our market research. We are a part of "Writing,
Drawing, & Office Supplies Manufacturing in the US", with the NAICS code of 33994. Here,
only the parts which are important for our market research are going to be mentioned. We will
draw our conclusion after we present the parts of the report we need.
Note: Most of this part is from our market report which is presented in the progress report, for
further details, you can refer there.
10.1.1. INDUSTRY DEFINITION
Operators in this industry purchase ink, wood, plastics and other materials and manufacture a
range of writing, drawing and other office supplies. Examples of products made by these
operators include pens, pencils, art goods, staplers, marking devices, carbon paper, inked ribbon,
and others. End customers include businesses, students, home offices and households.
Figure 12- Industry information
The industry revenue is shown in the figure 11. We are going to base our market share on this
number.
10.1.2. SEGMENTATION
Lead pencils and art goods product
group includes artist's paint, canvas,
brushes, chalk, chalkboard, crayons,
drafting materials (except tables and
boards), hole-punches, label makers,
whiteboards, blackboards, clay,
palettes, lead pencils, color pencils,
pencil sharpeners, staplers, staple
4 www.ibisworld.com
Figure 13- Industry segmentation
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20 Paper Snaps
removers, tape dispensers, water colors and others. The popularity of these items is expected to
have decreased over the five years to 2009, largely due the computerization of processes and a
declining need for pencils and drawing. While painting is still a popular hobby, drafting and
graphics work is mainly done over the computer, which has reduced the need for pencils and
drafting materials. At the same time, the average price growth for lead pencils and art goods is
forecast at 1.4% per annum over the five years to 2009. This is slower compared to the average
industry product, contributing to a lower value of sales. Our reference estimates that this segment
will account for 28.7% of industry revenue in 2009, decreasing from 30.1% in 2004.
10.1.3. INTERNAL COMPETITION
Competition among operators is mainly based on the price of the product. Retail and wholesale
firms are generally the major purchasers of the industry's products, who then sell to the final
consumer. With the demand for the products dropping off, pressures from retailers and
wholesalers on these manufacturers have pushed down prices in recent years. Therefore,
manufacturers need to keep their prices competitive in order to maintain and increase sales.
Firms that are able to offer high quality products at a competitive price are likely to hold a
competitive advantage within the industry. While downstream industries and consumers want to
pay low prices for office supplies, these sectors also want products that are durable, attractive
and functional. Customers may be willing to pay a higher price for products that will last
considerably longer than a cheap product that needs to be replaced within a short period of time.
Companies that operate in this industry can gain a competitive edge by providing a high standard
of service to downstream wholesalers, retailers, and consumers. Firms that can produce special
orders as required, provide timely deliveries of ordered goods, and offer client assistance for
product problems and issues, can earn a good reputation and increase orders and sales.
Advancements in product design and manufacturing for the industry's products can give a firm a
competitive advantage over other companies. Firms that produce specialized office supply
products tend to serve a niche market and build a certain level of brand loyalty. For firms that
produce generic type products, maximizing efficiency and productivity through advanced capital
equipment and machinery can be a successful business strategy. Also, ensuring that employees
work to full capacity may be an important source of competitive advantage over other firms.
10.1.4. BARRIERS TO ENTRY
Barriers to entry in this industry are medium. These barriers are steady.
The major barriers to industry entry are the start-up costs, and the ability to secure a loan to
finance the business. Start-up costs include machinery, equipment, securing a manufacturing
facility and similar expenses, all of which depend on the type of product manufactured and the
geographical location. Majority of businesses borrow money for the launch, and securing capital
can pose as a barrier. The industry is in a decline phase of its economic life cycle and business
prospects are constrained by declining demand, strong price competition and a saturated products
market. As such, financial institutions may be reluctant to lend money to businesses in such an
environment. The aftermath of the 2008 financial crisis is expected to result in further regulation
of the credit market, increasing the barriers to securing a loan.
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21 10. Business strategy
The industry will also require staff of specialist knowledge and skills needed for office supplies
manufacturing. This includes engineers, designers and technical staff which are necessary for the
running of the business. According to the National Association of Manufacturers, skilled
professionals working in manufacturing are increasingly hard to find.
Once the new firm enters the industry, relatively strong market concentration, high levels of
competition and rising input costs can pose a barrier to profitability. New firms may have
difficulty in establishing their product in the market place due to a relatively high numbers of
competitors promoting their products. Downstream loyalty to branded products also means it can
be difficult to attract sales from other manufacturers. Considering a declining demand for the
industry products, the entrant may need to enter a niche market to secure success, however, it is
costly to develop and test new products. For new firms that are attempting to establish
themselves in the market place, a strategy of introducing new and innovative products can
sometimes be riskier and more costly than competing against established brands.
10.1.5. REGULATION
It is anticipated that regulations and laws related to environmental outputs and other industry
activity will increase in future years. This is due to increasing influences from concerned
citizens, government bodies and environmental lobby groups to decrease pollution levels from
all US industries. US firms can benefit from this trend by complying with increased regulation
and promoting their compliance in advertising and promotional activities. However, more
stringent regulations will also influence the decisions of many firms to outsource manufacturing
to foreign firms in countries with lower regulation levels.
This will be the main success factor that our company is going to implement in our strategy,
since the beginning it was the main goal of our design.
10.1.6. COST STRUCTURE
Figure 14- Cost structure of the industry
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22 Paper Snaps
10.1.7. KEY SUCCESS FACTORS
The key success factors in the Writing, Drawing & Office Supplies Manufacturing industry are:
• Access to niche markets
A degree of specialization within a firm can provide access to niche markets, such as erasable
markers. This enables operators to reduce revenue volatility over time as a loyal customer base is
built up, and to develop patents.
• Economies of scope
A firm that can supply customers with a wide variety of office supply products can increase
demand and client loyalty.
• Establishment of export markets
As the demand for office supplies is declining in the US, export markets provide new revenue
opportunities for manufacturers.
• Economies of scale
Firms that can produce items at the lowest marginal cost are able to maximize profit
opportunities.
• Provision of superior after sales service
Good response times to clients' needs will ensure the ability to out-compete other manufacturers.
Service is one of the defining winning factors for firms in a highly competitive industry such as
Writing, Drawing and Other Office Supplies Manufacturing.
• Ability to pass on cost increases
Increases in input prices can cause a rise in the price of office supplies. A firm that can pass these
increases onto downstream wholesalers and retailers can maintain profit levels.
All of the above factors are going to be considered in future for the expansion of the company.
10.1.8. FUTURE TRENDS AND GROWTH
While a major portion of the industry's products are
basic, generic type office items, business and consumer
demand can still fluctuate dramatically. Office supply
manufacturers need to continually develop new and
innovative products to stimulate downstream demand.
An example of product innovation capturing new growth
markets is the introduction of gel ink pens. Costing up to
ten times the price of traditional disposable pens, gel ink
pens provide a wide range of colors and consistent ink
flow for easier writing. These pens are now popular
throughout US offices, schools and homes due to high
Figure 15- Industry revenue
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23 10. Business strategy
quality of manufacturing and finish. US firms that can develop similar popular products can
profit from supplying both large and niche markets.
Office supply superstores and major retailers such as Wal-Mart and K-mart will continue to
pressure office supply manufacturers for lower priced goods. This downstream cost cutting can
lead upstream firms to reduce their own expenditure and implement new technologies to improve
productivity. Similar external threats from increasing levels of competing imports will also force
US office supply manufacturing firms to develop new products and increase efficiencies.
10.2. MARKETING PLANNING
10.2.1. MARKET SHARE
From the table in figure 15 we see that the revenue in 2010 is estimated to be $3,289.2 million
and from the charts we see that lead pencil market, which also includes staple, accounts for
28.7% of this revenue. Considering these two numbers, we have a reference by which we can
estimate our market share. From section 8, we need to produce 30,000 boxes for $2.5 each; we
can estimate our revenue to be:
Assuming that our product enters the market in 2010, and from figure 14, we can estimate the
market share:
This number is very small because we estimated the initial demand for our product to be really
low at the beginning, and thus chose a small nominator for the mass production demand
function.
10.3. PRODUCT INVENTION STRATEGY AND MARKET NEEDS TRIANGLE
Here we are going to inspect our design from another viewpoint. This should be considered as a
part of our marketing model. At the end of this process we are going to be able to discover our
competitive edge and answer the question we were posed with since the beginning: "Why should
customers choose our products?"
We are going to identify our product invention strategy, which will enable us to map our product
invention and establish a market needs triangle. The market needs triangle would be a
representation of our competitive edges.
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24 Paper Snaps
Now we can do a product invention mapping (one of the many models to identify competitive
edges) to get the market needs triangle:
10.3.1. COMPETITIVE ADVANTAGES
The most important advantages that our product has over the existing competition are
Reusability and Sustainability.
Reusability
The major characteristic that our product has over the conventional staples is the fact that the
female and male bolts are reusable; this aspect of our product is going to be really appealing for
the customer.
Sustainability
The reusability will result in a more sustainable product over the competition. This will be
attractive for the environmentally conscious customers and may instill a sense of pride in them.
10.3.2. DIFFERENTIATORS
The major differentiators of our product from the competition are: Material and Aesthetics.
Material
The bolts can be made from new biodegradable materials; this will result in an easily recyclable
product, and even if the customer chooses to use the bolts only once, our product is going to have
minimal environmental impact, especially when compared to the competition.
Aesthetics
Because the functional design of the paper snaps is independent of the shape the top part takes,
we will have complete control over the top part. They can be made in a variety of shapes and
Figure 16 - Market needs triangle
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25 10. Business strategy
forms. They can choose to put their company’s logo on it; it can be changed to a more ergonomic
form, a popular TV character’s face, etc.
Fast Response Time
We are going to try and design our manufacturing system in a way to be able to have fast
response time to the customer's demand. This, as suggested in the market report, is one of the
key success factors in the office supplies market. The ability to have a fast response time can
only be considered after we get a share of the market and will mainly depend on our
manufacturing system's configuration.
10.3.3. PRICE OF ENTRY
These are the features that are offered to some extent by most of our competitors, one way or the
other. In this category, we have 5 major components: Mobility, Ease of Purchase, Simplicity to
Use, Productivity Enhancement, and Recyclability.
Mobility
It is obvious that our staples are mobile device and this is one of the main characteristics and
advantages of most staplers, staples, and paper clips that currently exist in the market (notice that
we compete with both staplers and staples). The paper snaps are even more mobile, customers
can easily carry them in their pockets.
Productivity Enhancement
After we get a share in the market we may further enhance our product by offering more paper
capacity, which can be met by making longer bolts, or as in our future designs, by making
threaded bolts with adjustable heights (refer to section 9).
Ease of Purchase
It is going to be really easy for the customers to purchase our product, just like a normal box of
staples, even cheaper!
Recyclability
This, as mentioned before, will be one of the main features of our product; but we have taken one
step further by designing the bolts so not only they are reusable, but also recyclable with wood.
This will minimize our environmental impact and will limit our carbon footprint to that of our
manufacturing processes, transportation, and material production.
Simplicity to Use
Our final product is going to be really simple to use, and ergonomics is going to be one of our
major goals as mentioned in section 9. The paper snaps will fit into one another quite easily and
with minimal effort. The design of the top part of the threaded paper snaps has a profile that fit
customers’ finger and make it more ergonomic for them to fasten the papers together. Our design
is focused on maximum comfort for the customer.
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26 Paper Snaps
10.4. MICROECONOMIC ANALYSIS
The table of figure 16 shows our initial investment costs and our annual costs:
Initial Investment
Injection Molding $25,000
Management $30,000
Facility Lease $25,000
Miscellaneous $10,000
Annual Costs
$55,000
Figure 17 - Initial investment and annual costs
Injection molding costs were obtained from comparing different vendors; for management we
made an assumption; facility lease is obtained from checking the rent for leasing a 3000 square
feet facility in Michigan; miscellaneous costs are assumed to cover the expenses of maintenance
and repairs when needed for the 5 or 10-year terms. Notice that all other costs, including labor,
tooling, and material are considered in our manufacturing process model.
For annual costs we just assumed that management salaries and the rent repeat themselves. Note
that this is a very simplistic estimate.
10.4.1. NET PRESENT VALUE AND BREAKEVEN POINT
The interest rate we assumed is about 6%, this number will be used for our NPV calculations;
cash flow for each year is going to be our profit, which we can calculate from our profit function
from before, considering that we are going to sell all the 30,000 units that we are making.
Because the labor and tooling costs are considered in our manufacturing model and used in our
profit function, we did not consider the cash flows out after each year.
Figure 17 shows the results of NPV calculations for 5 and 10-year terms. With a discount rate of
6% and a span of 10 years, the resulting positive NPV of the above project is approximately
$50,000, which indicates that pursuing the above project is reasonable. For the 5-year term the
NPV is higher and equals about $97,000, which makes our product even more enticing for the
short term.
Years 10 5
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27 10. Business strategy
Investment Cost ($140,255.5) ($157,253.24)
Operating Cost ($30,711.7) ($41,099.20)
Profit $220,565.9 $295,166.98
Net Present Value $49,598.7 $96,814.54
Figure 18 - Net present value of paper snaps for 5 and 10-year terms
Remember that even though a project offers a positive NPV, the projected cash flows are still
estimations. We went really conservative and estimated a really low number for our product’s
demand in the first year. Also we assumed that for the 5 and 10-year terms, we are not going to
expand our production at all.
Our breakeven point would be after the 2nd
year of production, and we start making profit after
the 2nd
year. That is when our profits offset the investment costs (from solver, the NPV of our
investment would be around $121,000 at the end of 2nd
year, while the NPV of our profits would
be approximately $137,000).
10.4.2. CONCLUSION
Including the interest rates and NPV in our calculations, we see that the results would be lower
than what we have expected from the optimization problem, which was almost purely
engineering analysis; this means that including economic factors such as the interest rates will
give us a more realistic result.
10.5. ADVERTISEMENT CAMPAIGN
Our product is going to make use of a robust advertisement campaign to establish brand
awareness as we enter the market, trying to capture some market share for us; the following is a
brief description of each of these advertisements; our first-hand experience with these
advertisements in the design expo proved their viability, as visitors were often attracted to our
booth by these advertisements. These advertisements are shown in Appendix B.
Burger
The product “paper snaps” is good at arranging multiple layers of paper, so we choose the burger
with different layers to show this characteristic of our product. Burger is a traditional American
food, which is supposed to attract people’s attention well in the American market.
Tetris
Tetris is a well-known worldwide game. The way it plays always shows the “male-female”
structure. “Paper snaps” work following the way of “male-female” structure, so it is a very good
example to inform people how the product works. Besides that, “Tetris” also shows the “fun”
part of using our product, which will attract the young generation in the market. This was readily
proven in the design expo, the Tetris advertisement was the main attraction for the students.
Spin the Franklins
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28 Paper Snaps
The traditional staple sometimes force people to fold the paper, which can be annoying when the
documents are required to be keep flat. “Paper snaps” make people have more choice and keep
their paper flat. The “money figure” in the poster shows that sometimes the fold might lead to
some un-pleasurable experience or funny effect in form of creases, but the “spin” way can easily
solve the problem, so people can see the product’s advantage in this way.
Save the Environment, Save Money
All the paper clips, paper stapler, staple, staple remover etc., that appear on the poster shows the
traditional tools that people use to fasten papers. But “paper snaps” have most of the functions
that traditional ways have, and it is both recyclable and strong (it holds together). This poster
means to show people the new product can save you a lot of money and help you manage papers
same as the old ways, or even more conveniently.
Save the earth
This poster shows our main purpose in making this new product “paper snaps”. As the slogan
says: “Saving the planet, one staple at a time!” In the poster, a tree is fastened to the earth, and its
root is the logo of “paper snaps”. The “paper snaps” provide an environmental friendly way to
the old unsustainable way in arranging papers, so people who use our product are giving their
efforts to protect our planet.
10.6. PACKAGING DESIGN
Unlike the traditional staples’ packaging design in the market nowadays, which only focus on the
good aspect of using the product itself, we want to use a new packaging, which design shows
that our product, the “paper snaps”, is a sustainable new tool that helps the office workers. We
have the environmental friendly theme poster on the back of the box, which shows our product
goals to create a more sustainable and easy way for the daily office working environment, and
encourages people to help the environment by purchasing our product. Figure 18 shows two
views of a 200-box of snaps.
Figure 19 - Packaging Design
11. CONCLUDING REMARKS
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29 11. Concluding Remarks
The paper snaps will surely revolutionize the way people attach papers together. Early reception
of it in the design expo proved that it holds a great promise for the future. By replacing the metal
staplers that require use of separate devices to both attach and detach them with a reusable, more
environmental friendly option, fish can now breathe easier under water! The careful choice of
material for a balance between low Carbon footprint, and reusability was addressed by our
optimization model. The final price of the product, which is less than that of conventional staples
(which usually start at $3 before discounts), will surely attract the attention of price sensitive
customers. Our target markets of small and large businesses will surely benefit from the reduced
price. To summarize, our key design decisions were:
1. To remove the need of separate devices for attaching and detaching staples. A lot of resources
will go to waste while making these devices.
2. To use more environmental friendly materials for our products, and avoid using metals. Heavy
metals kill schools of fish when they are released in the water. As much as 2 ppm in water is
enough to prevent fish from absorbing oxygen and the minimum concentration around zinc
plants is 20 ppm.
3. To enable reusability of staples and avoid wasteful dumping of metals into the environment.
Tons of metal remain in nature without being recycled when they are no longer of use.
4. Make it possible for large companies and corporations to throw out their papers in bulk
without separating the snaps one by one to reuse them by use of materials that can be recycled
with paper through the same process.
Our task is not done here, there are going to be further modifications to the design of this product
in the future and the customers will surely benefit from even greater functionality of paper snaps
2.0.
Our designs for the future will include threaded fasteners, which will have the convenience of
adjustable heights to provide the customer with wider options to attach different numbers of
papers together. Also the company is going to do further research on new biodegradable
materials to come up with more environmentally friendly solutions, to further meet goal #4
above.
One task for the future, which was not addressed in depth here, is to do a more in depth market
research in form of customer surveys and questionnaires to come up with more precise market
demand models for our optimization model and later the microeconomic analysis.
Anyway, the paper snaps hold great promise for future and they have the potential to replace
staples and paper clips. Hopefully, in the future one will no longer hear about attaching papers
with staples, just one no longer hears about coal fueled trains! Hopefully staples will soon be a
thing of the past!
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1 Appendices
APPENDICES
APPENDIX A: CES RESULTS……..……..……..……..……..……..……..……..……..…….2
APPENDIX B: ADVERTISEMENTS……..……..……..……..……..……..……..……..…… .5
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2 Paper Snaps
APPENDIX A: CES RESULTS
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5 Appendices
APPENDIX B: ADVERTISEMENTS
Tired of all the fuss? Save money!
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6 Paper Snaps
Tired of the creases?
Spin!
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7 Appendices
Saving planet earth,
One staple at a time!
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8 Paper Snaps
Easy and fun!
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9 Appendices
Diversify layers!
