Your packaging operation costs your company much more than the price you pay for your packaging materials, not only in the labour and time it takes to run the operation and physically pack the products, but also in the way it impacts the cost of other vital areas of your business, like transport, stock holding and damage and returns of product. In this way, packaging tends to accrue cost as it moves through the supply chain. Being aware of this provides a number of opportunities to reduce costs and improve efficiencies.
There are many aspects to be considered in assessing the total cost of your packaging operation, so we have complied a few tips to help you identify ways you can save on your total packaging cost as well as improve the efficiency of your operation.
The packaging process
Take a look at how long it takes to collate, sort, pack and wrap each product ready for transit. Is there an alternative package design that can be assembled faster? Is there an opportunity to automate some of the process so packages can be filled or sealed more efficiently. Take a look at the layout of the packing areas; can the workstations be rearranged or altered to be more effective, save time for your packers and improve output?
Stock holding and storage
How much space is your packaging stock taking up in your warehouse? How much is this costing you? Is there a way this could be reduced by rationalising your range, improving stock management or by arranging stock holding with your suppliers so your stock can be drip fed in as and when needed? Are there less bulky packaging materials you could be using without compromising on package protection?
If transport is a big expense, reducing the size and weight of your packages can help reduce your transport costs considerably. With today's choice and advancements in packaging materials there may be a better way to pack your products to maximise space in transport and reduce your shipping costs.
Damage and returns
One of the primary purposes of packaging is protection. Damage is sometimes inevitable, especially on long haul shipments, but if your damages and returns are in excess of 4% there is a problem and even at 4% there is still huge scope for improvement and hence a cost saving. Packaging done right should not result in damage. If you have product getting damaged or returned on delivery your packaging may need to be readdressed and a more suitable packaging solution found.
Speak to your packaging suppliers regarding this they should have the expert knowledge and experience to be able to advise you on alternative options for protecting your product during shipment.
All this considered, it becomes evident how much your packaging is really costing your business. Calculating your total cost of packaging is a good way to see where there is room for improvement and savings. We provide a free packaging consultation which works with you to help you asses the total cost of your packaging and identify where improvements can be made. Our industry specialised Account Managers are highly experienced and will advise you on where and how to save costs and improve efficiency in your packaging operation.