Three tips to create cost savings through your packaging strategy

  • junio 29, 2023
Overview of a large industrial distribution warehouse storing productsOverview of a large industrial distribution warehouse storing products

Anyone involved in supply chain management and packaging will recognize the importance of cost savings in packaging. However, it can be tricky to determine where to begin and how to make a difference in such a tight market. Here are three cost-saving tips for your packaging operation.

  1. Packaging materials. Selecting the correct packaging materials can make a huge difference when trying to save money. Start by asking a few simple questions to determine if a savings opportunity exists:
    • Are we using the ideal packaging material? Packaging materials options abound. Packaging your product correctly can also help you meet performance and sustainability goals.
    • Are we using too much packaging? Organizations often find their package design consists of too much packaging. Conducting a packaging “tear down” and evaluation can help you thin out unnecessary packaging. This analysis can lower packaging costs and enhance the functionality of the primary materials.

    While using less packaging material is an obvious sustainability solution, other benefits can bring value to your entire organization. For example, lower transportation costs and less frustration for your end customers, which should increase customer satisfaction levels. Finding the ideal packaging performance balance between packaging costs and damage costs is crucial and fluctuates from organization to organization.

  2. Packaging optimization. Once you dial in material use, you can optimize your primary, secondary and tertiary packaging operations. Doing so provides an excellent opportunity to generate additional cost savings.
    • Primary: Optimize your primary pack design with the endgame in mind. If your product ends up on a shelf, design for that shelf space. Designing your package for its intended shelf space will maximize your shelf presence while making your marketing team happy.
    • Secondary: Increasing your master carton density can boost efficiency and cost savings. More product per carton equates to more product per pallet and per truck. Make sure you design your primary packaging to nest and fill out the master carton to optimize your transport packaging. For example, flexible packaging options can be great. But if your master shipper has a low product count, you’re leaving money on the table by not using valuable space.
    • Tertiary: Pallet and truck usage remains crucial for cost savings, for both full-truckload shipments and less-than-truckload (LTL) shipments. You can minimize LTL shipment costs with pallet load configurations that use unit space (even without a pallet) without slowing handling processes. Doing so will also keep your footprint small. Optimizing cube space in a trailer makes all the difference when you’re pinching pennies. Remember, two key factors affect truck limitations: weight and space. If you’re not maxing out the weight of your trailer, you better be packing it to the brim.
  3. Packaging in the supply chain. For manufacturers and retailers alike, nothing is worse for profitability than having your product arrive at its destination damaged. It’s basically throwing money away. Damage happens, but you can and need to control it. For starters, package your product for the specific supply chain in which your product needs to travel. To plan accordingly, you need to fully understand where the hazards are. Identify and map out touch points, hazards introduced by handling procedures and transportation methods (where vibration may result in damage). Adjust your supply chain operations to minimize the potential for damage. Use conveying systems whenever possible to minimize manual handling, drops and tip-overs. Planning for these hazards will help you develop packaging systems that’ll withstand these damage-generating areas.

Evaluating and understanding your packaging systems, packaging operations and supply chain risk areas can lead to significant operation-wide cost savings. If you’re unsure of where or how to start a packaging assessment, seek the advice of certified packaging experts to determine the best packaging strategy for your organization.

— By Alex Turner

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