Cost Optimization
7 Steps to Reduce Packaging Costs
Reducing costs is an ongoing task for every company, but what if we told you that you could save money without impacting you automotive part?
You’d probably be thrilled.
Improving and optimizing your product’s package is probably the one thing you could change that would give you the biggest bang for the buck.
Questions to Ask to Optimize Packaging
1. What type of package do I need?
2. What sort of environment will the packaging be exposed to?
3. What types of materials can be used?
4. How creative can I be with the design of the packaging?
5. What quality standards does the packaging need to meet?
Making small changes can net big savings. If you redesigned your part’s packaging so that more product is able to ship at one time that will save you money over the long haul.
What if you were able to reconfigure the design of your package so that it was able to nest with other packages? More packages would fit on a pallet and you would save on shipping costs.
These types of questions should be asked throughout the process of re-thinking your packaging. Put everything on the table! Be willing to think outside the box to come up with new solutions. Done correctly, you’ll give your product greater protection and might even reduce your company’s carbon footprint.
7 Steps to Reducing Packaging Costs
1. Research Your Options
There are so many packaging options available now. One size box doesn’t fit all. In fact, the best solution might not be a box at all. We start by helping you research the latest in packaging materials, designs and technology. Your package needs to be efficiently designed, but it also needs to be durable enough to make it through numerous journeys — air, sea, rail and road.
Items to Consider:
Total cost of materials
Durability for transport
Resistance to environment
Ease of handling
Aesthetics
Government regulations
2. Determine Necessary vs. Unnecessary Costs
Here’s a good exercise: Itemize the costs of the package you’re currently using. Break down the costs into those which are strictly for performance and those which are aesthetic only.
Be honest with yourself as you go through each line of this cost analysis.
Can you justify the costs that are purely aesthetic? If not, can you eliminate that feature and add that value into the performance side of the package design?
Questions to Consider:
Does your product require an inner carton and an outer carton?
Can you save money by taking off the label and printing information directly on the box?
3. Carefully 'Handle With Care'
There's a time and place for everything, including caution. But there's no need to go overboard. For example, it's not necessary to use heavy-duty packing material for something lightweight unless it’s truly fragile. Remember: Your primary goal is to protect the product inside the package. If you do that, all the side benefits will fall into place — savings on damaged goods, product rework, and replacements.
We use CAD to calculate the dimensions and strength needed for your packaging.
Factors to Consider:
Inner carton dimensions
Outer carton dimensions
Carton dunnage needed
Carton stacking configuration on pallet
Container loading configuration
Container dunnage needed (if any)
4. Shed Some LBS or KGS
Lightweight packaging materials are the best choice most of the time. They’re typically easier to handle and will reduce shipping costs. However, just because a product is lightweight doesn’t mean it will be cheaper to ship than heavier goods. Shipping companies have a phrase, dimensional or DIM weight; the weight used to calculate shipping costs for bulky, lightweight packages. You could visualize DIM weight as the space that such packages take up in a plane or shipping container. What such packages don’t pay in weight, they pay in bulk.
5. Investing in Testing
You have a lot riding on your packaging. It’s going to be traveling thousands of miles via truck, shipping vessel, rail, air, maybe truck again. It’s going to go through a variety of environmental conditions. It might be subjected to some extremes in temperature. There could be some people who don’t handle your packages with the same loving care that you would. But when you open the package, you want that product to come out as flawless as when it went in.
Come up with testing guidelines and procedures so that you can determine whether the packaging you’ve developed really will be the best for your parts.
Your package needs to protect the contents from:
Compression - the weight of load, both static and dynamic (load under vibration).
Vibration - the constant movement or motion from a various modes of transportation.
Shock - either drop or impact, rotating, free fall or on an incline.
Atmospheric - Constant/cyclic changes in temperature, humidity and pressure.
6. Lean Inventory & Volume Discounts
Check with your packaging supplier to see if you can get a discount for ordering in bulk. Most companies offer high volume discounts, but don’t always advertise them. You won’t lose anything by asking.
7. Green Packaging
Being environmentally friendly is always a plus when it comes to packaging, even though others are less picky. But let’s face it, it’s good for the planet and it can even be good for the bottom line.
There are a couple easy ways you can get on board with green packaging initiatives:
Reduce Waste
Think long and hard about what your package is made of, what it includes inside and how easy it is to collapse or take apart for recycling.
Choose Sustainable Materials
Select materials that are environmentally friendly. There are loads of new materials being used to make cartons and packing materials including coconut fibers and mushroom roots. Even things like the inks and dyes used in packaging can be reconsidered.
Ultimately, packaging should be on the list of items you routinely look at improving. Technology creates new materials all the time. Don't leave money on the table by hanging onto old packaging solutions. Stay aware of your packaging performance requirements, and make sure you're using the best solutions available. If not, look for ways to improve. The priority is performance.
