How a Packaging Engineer Discovers Supply Chain Cost Savings

In one example, a new box design helped packaging manufacturer Silpack reduce air freight costs by $300,000 per one million boxes shipped. In another example, a global footwear producer was able to reduce transport spend by $1.2 million by standardizing material usage and reducing box complexity. How do packaging engineers discover savings hidden in the supply chain? In short, by taking a critical look at how product and packaging interact.

Distribution Assessment

From manufacturing facilities overseas to warehouses, distribution centers and store shelves in Europe and North America, packaging undergoes a lot of stress as it moves through the supply chain. If the packaging materials aren’t properly specified, or if the design doesn’t take into consideration the actual environments through which packaging moves or the actual hazards it's exposed to, the likelihood of product damage is many times higher than it would be if the packaging were optimized for distribution.

Packaging engineers are interested in how packaging performs in the “real world,” specifically how it stands up to the hazards of distribution, including rough handling, warehouse stacking, loose-load vibrations and environmental exposure (e.g., hot or cold temperatures, high or low humidity). But not all distribution chains are the same, so packaging engineers must understand the exact route their boxes take from origin to destination and all the touchpoints in between. By looking across the entire supply chain, packaging engineers are able to identify optimizations and improvements that eliminate waste, lower costs and drive revenue.

Understanding the distribution environment and specifying packaging requirements accordingly allows engineers (in tandem with designers) to reduce damage caused by under packaging while avoiding excess material and shipping costs due to over packaging. Packaging is optimally specified and designed to withstand the actual hazards it is exposed to.

Testing and Analysis

Now that the packaging engineer understands the actual distribution environment, he or she replicates the supply chain inside a laboratory setting to identify areas of improvement in design and evaluate comparative packaging materials. Lab testing allows engineers to subject packaging to closely simulated damage-producing motions, forces and conditions of real-world environments and hazards.

Material analysis is equally important, and the findings can help packaging engineers uncover savings opportunities on par with the savings to be had by reducing product damage in transit. For example, if a packaging engineer opts for double- or single-wall corrugate over a heavier and more expensive triple-wall board corrugate, the material savings alone could be millions of dollars for global brands with large packaging operations.

Material reduction also plays a key role in container yield savings, another major opportunity uncovered by the keen packaging engineer. For example, if an existing carton with XYZ dimensions fills up 35 containers, switching to single-wall corrugate may shrink the dimensions such that only 20 containers are needed to deliver the same amount of product. Considering that a container costs around $3,500 to fill, the packaging engineer has just uncovered $50,000 in savings just in container yields.