Is Your Packaging Optimised?
Packaging plays a significant role in how much time and money it takes to produce and ship your products.
Packaging optimization can help your supply chain by:
- Lowering your shipping costs
- More efficient use of space in distribution centers
- Reducing product damage
- Reducing your carbon footprint and improving service for customers
- Making packaging easier for employees to handle
You want packaging to protect your product so it arrives in perfect condition to the customer, but you also want to minimize your costs and make the shipping process the most efficient possible. Optimizing your packaging can result in saved costs — which can increase profits.
For example, one global apparel company that worked with Billerud to optimize transport packaging saved $50 million a year, mostly related to supply chain savings from transport volumes. If you're interested in optimizing your packaging for your business, ask yourself these questions about your packaging.
Packaging Optimization Considerations
Is Your Packaging Efficiently Designed?
The materials and design of your packaging affect its cost.
Efficiency in design is using the right amount of materials in order to protect and ship products through the entire supply chain. Environmental variables, packing at the factory and modes of transportation throughout the supply chain need to be considered in order to design efficient packaging.
Efficient design means packaging is:
- Easy to handle
Packaging that is not efficiently designed becomes wasteful and expensive. Look for an effective option that gets the job done.
Can You Justify the Cost of all Purely Aesthetic Features?
Today's consumers are more aware of the environmental impact of brands than ever. The Hartman Group's Sustainability 2015: Transparency report found 52% of customers said it was important for packaging to be minimal. Forego the aesthetic features if they are not within budget and save money while improving customer satisfaction.
Does Your Packaging Sufficiently Protect Your Product?
If your business has a high return rate or a significant number of customers, or supply chain complaints about product damage, it is vital to examine the role packaging plays. Besides the impact damaged products have on customer sentiment, additional costs include:
- Repairs and adjustments
- Return shipment and reverse logistics costs
- Expedited shipment costs and logistics
- Supply chain interruptions and delays
- Discounts and profit losses
- Environmental costs
Not optimizing your packaging means you are risking future product damage. That costs time and money.
After examining the whole packaging supply chain, if packaging is found to be sufficient and not the source of any product damage issues, you can broaden your investigation to find the source of the problem.
Does Your Packaging Hold Up Throughout the Entire Supply Chain?
Changes in the supply chain environment can threaten your packaging. Traveling among various extreme climates can affect packaging, which can then damage the product and put your supply chain employees in danger.
Additionally, packaging problems can cause supply chain inefficiencies, when workers have to scramble to find space for shipments or are spending too much time breaking down packaging supplies.
Your packaging needs to be able to withstand climate and temperature variations, compression, shock, vibration and impact. This is why a packaging audit with material testing and performance analysis is so important for packaging optimization.
Have You Identified any Ways in Which Your Packaging Can Be Improved?
Issues like excessive air space, non-essential packaging elements and package failures in the supply chain, can all present ways to optimize packaging.
If you have identified ways to improve your packaging, an expert packaging partner can help you make progress. A global footwear producer had a shoe box design that was not sized well, which led to excessive packaging and unnecessary costs. By optimizing the use of container space, freight cost reductions resulted in savings of $1.3 million in just the first year.
Is Your Packaging Sustainable?
If your packaging is not sustainable, then it may not be fully optimized. Optimized packaging leads to sustainability because:
- The right amount of materials are used, cutting down on waste
- Green packaging operations can result in lower costs
- Reducing excessive air space leads to better energy efficiency and a lower carbon footprint
Sustainable materials improve the life cycle of packaging products and how they affect the supply chain. Reducing cost and waste through optimized packaging dimensions also benefits the environment. Sustainability and packaging optimization go hand-in-hand.
What's the Breakdown of Your Labor Costs?
Packaging can have labor requirements. For example, a regular slotted container requires time to assemble and close with glue or tape. Packaging that takes longer to assemble equates to additional time spent with packaging, which means increased labor costs and resources for your supply chain team.
Optimized packaging uses the least amount of materials to offer the best product protection. Eliminating extras like void fill, tape and bubble cushion lowers the overall cost of the package. That also cuts down on assembly time and other labor costs incurred when packaging fails.
What's the Breakdown of Your Shipping Expenses?
Multiple factors affect total average shipping expenses. You can make adjustments to the following items to optimize packaging and costs:
- Package size: Shipping products in packaging that is as small as possible can decrease expenses
- Total weight and dimensional weight: Dead space (air) in a package increases cost
- Oversize charges: You are charged extra for packages of certain sizes, whose size you may be able to decrease through optimization
- Special handling: Changing your packaging to a more reliable type may eliminate the need for special handling
- Number of packages shipped per order: By optimizing your packaging, you might be able to ship more products in every shipment
Made-to-fit, strong, reliable, sustainable packaging can help you make improvements in all of these areas. By optimizing packaging, you can cut down on shipping expenses.
We Can Help You Optimize Your Packaging
At Billerud, we have helped countless companies save millions of dollars on packaging-related expenses. Our sustainable packaging solutions protect products and cut down on costs, perfectly fitting items that are shipped so that waste is eliminated and resources are preserved. We can help your business.
To learn about Designing a Sustainable Packaging Program, download our ebook.
And then contact us for a consultation on how we can help you with packaging optimization for your business.