The IKEA model – packaging is your product

The IKEA model – packaging is your product

Are you giving your packaging enough thought? Let’s consider the example of IKEA. But first, let’s think about packaging in general and where the opportunities for growth are in your operation. Think about your business model, products and supply chain. From concept to customer you are the experts. But how much thought do you give to how your product is packaged and shipped? Proper packaging optimization makes it possible to get your product to your customer in the fastest, most reliable and least expensive way—protecting not only your bottom line but also your customer relationships and your reputation along the way.     Additionally, right-sized packaging lowers your transportation costs. As more carriers continue to move to dimensional (volume-based) pricing rather than weight, the wrong package size means you are paying to ship air. The problem is: you can’t sell air. Why are you shipping it? And packaging optimization also creates opportunities to reduce labor costs per unit by reducing movement, touches and handling. IKEA – proof that packaging is your bottom line Efficient packaging is so important to eliminating costly waste that some companies like IKEA actually redesign their products to cut costs and optimize the product’s storage and shipping. In 2015, for example, IKEA announced big growth plans aimed at increasing global revenue by 74% by 2020. A significant part of that growth was to come from selling more products through its existing stores, which meant finding ways to cut prices to move more volume.     As an aside, we’ve all seen examples of really awful packaging from companies like Amazon. But don’t take that as...
Amazon’s packaging optimization tidal wave

Amazon’s packaging optimization tidal wave

For years, we’ve been telling anyone that will listen that packaging optimization is a must. But not only packaging optimization; transportation, warehouse and labor optimization too. “Get on board or you will get pushed out,” is the phrase we repeat to clients, competitors, investors and friends. Well, Amazon is about to make this a lot more real. If you’re not using optimized packaging by August 2019—just 10 months from now—you stand to lose money Don’t believe our take? You don’t have to. Here’s what industry experts have to say about the new program. Frustration Free Packaging? Amazon put a whole online experience together to get you excited about the concept. But don’t be fooled—there’s nothing nice about what Amazon is about to do to your profit margin if you don’t get onboard. Here’s what Jacquie Patterson (featured in the video), had to say about “Switching to Frustration-Free Packaging: “We can see a savings of up to 50% or more in material usage and in shipping volume.” In the 10 years since Jeff Bezos started the Frustration Free Packaging initiative in 2007, Amazon has eliminated more than 500 million boxes and more than 244,000 tons of packaging materials through 2017. And good for them, they are leading the charge to save pack material, lost warehouse space, the shipping of air and wasted man hours too. In 2017 alone, Amazon reduced its packaging waste by 16%, the equivalent of 305 million shipping boxes. But the message to industry has been “…we’re just getting started.” The aim of the Amazon FFP program Differentiate and optimize the customer’s experience Minimize the environmental impact of...
Get your pick, pack and ship in shape for Cyber Monday

Get your pick, pack and ship in shape for Cyber Monday

2017 Cyber Monday broke records—are your logistics operations ready for 2018? According to Forbes, Cyber Monday 2017 was the largest online sales day in history with $6.59 billion in sales—a 16.8% increase year over year. And while Cyber Monday is a phenomenon into itself, the entire shopping weekend, from Thanksgiving to Cyber Monday broke records last year. According to SupplyChain247, during the four day shopping window merchants shipped orders that traveled globally 12.6 billion miles to reach customers—more than 10 times the distance from the earth to Saturn. Cyber Monday event taxes industry leaders. UPS typically handles 19 million packages a day but during peak holiday season the number jumps to more than 30 million packages a day. Last year, UPS hired around 95,000 seasonal employees to help manage the demand–and even then they had trouble keeping up. According to Fox Business News, because of the “unprecedented surge” in online orders, UPS was forced to increase transit time by several days on an unspecified number of deliveries. They also were forced to raise the hours drivers worked at more than 100 package-delivery centers where demand was the highest.     Amazon also announced that Cyber Monday 2017 was the biggest shopping day worldwide in company history noting that customers ordered hundreds of millions of products throughout the weekend, with 140 million items bought from small businesses. Getting your logistics in Cyber Monday shape A sudden and huge surge in demand can tax even the best prepared companies. So how are you preparing for Cyber Monday this year? SupplyChain247 outlines a few considerations for the logistics industry noting that shippers must...
Packaging & Logistics Solutions at Parcel Forum 2018

Packaging & Logistics Solutions at Parcel Forum 2018

Parcel Forum 18 – Don’t miss PLS booth #344 The PLS team is at the Parcel Forum to talk about how to save you money with packaging optimization, transportation and dimensional charges, our software, and more. Make sure to stop by the PLS booth #344. This year we’re giving away a 40-inch flatscreen T.V.! Stop by booth #344 or sign up now to enter your name in the drawing and receive the PLS monthly newsletter. OBI can help you Orange Box Intelligence is a program we have developed to help e-commerce and other industries drive sustainable efficiencies in their packaging, transportation, labor and warehouse operations.  Our formal suite of performance management solutions includes; packaging optimization, transportation optimization, labor optimization and warehouse space optimization. Our dashboarding capabilities will show & validate your current state, clearly articulate your leaner future state and allow you to monitor savings indefinitely. PLS will continue to work as an extension of your company to ensure positive results. PLS and Shipware collaborate At this year’s forum we are co-presenting with our strategic partner Shipware. PLS team members will share their expertise during a short, informative presentation. We will also be there to answer any questions you might have after the session is over. If you attend, let us know on social media – tag our channels and use the conference hashtag to get connected and let everyone know what you took away from this year’s forum. PLS presentation date and time: Tuesday, September 25th 11:00 to 11:50 a.m. 401-402: EXCLUSIVE Live Parcel Pricing & Procurement Practices Benchmarking   About PLS We are packaging and supply chain optimization experts. PLS can help you develop greener packaging and reduce...
The Uber-ization of the supply chain

The Uber-ization of the supply chain

The typical constraints on the supply chain include shelf space, productive capacity in plants, and finding the right people capable of doing the work when you need them. Yet, as noted in Forbes, Uber overcomes these constraints through reliable supply-demand matching, “Demand need not be created, only sensed. Supply need not be built, only tapped.” In the sharing economy, companies work strategically to find ways to reduce waste and break free of the typical constraints. This idea isn’t exactly new. In 2015 Fortune Magazine featured Flexe, a company that makes a market of spare warehouse space for companies looking for storage capacity but not wanting to build or hold the typical long-term lease. In recent years, there has been increasing interest in the benefits offered by Uber-izing the supply chain. SCM World found that between 2014 and 2017 the percentage of supply chain professionals who view the sharing economy as disruptive and important for their industry has grown from 8% to 36%. And 52% of logistics and distribution company respondents call the sharing economy important to their strategies–the highest of any industry group. The Uber-ization of the supply chain will run on cloud services From matching volatile and momentary demand for assets and labor with supply to using manufacturing equipment sensors that assure product quality in Uber-ized manufacturing or with blockchain capabilities that guarantee provenance in sources, SCM World suggests that the possibilities for the logistics industry are limitless.     Accenture claims that the benefits are too great to ignore. From competitive real-time pricing, increased market transparency through cloud-based applications to the exceptional convenience enabled by rapidly emerging...
Green supply chain: it’s good for everyone

Green supply chain: it’s good for everyone

I hear from many colleagues in the supply chain industry who believe that it is not possible to have both a green supply chain and a fast, low cost supply chain. But it is simply not the case. More than ever, adopting green, socially responsible practices can help increase efficiencies and cut costs. In fact, corporate responsibility and green initiatives are becoming the standard of the most competitive global companies. Why go with a green supply chain? Forbes contributor, Paul Martyn’s prediction is that in 2018 sustainability will be the new lean. He believes that more than half of the top 100 multinationals will be doubling down on their sustainability commitments relying on their supply chain professionals as primary drivers. The advantages of going green are numerous including: Reductions in shipping costs and burning less fossil fuels Consolidating and optimizing material and packaging usage means fewer products are consumed When waste is minimized, so too are the costs associated with purchasing and disposal Improved public image for companies as customers are increasingly interested in spending their money with companies that emphasize environmental and social responsibility According to Harvard Business Review, companies with a sustainability agenda are better positioned to anticipate and react to economic, social, environmental, and regulatory changes as they arise\Investing in sustainability is not only a risk management tool, it can drive innovation. Redesigning products to meet environmental standards or social needs offers new businesses opportunities. 3M, for example, integrates sustainability into its innovation pipeline through its “Pollution Prevention Pays” program which aims to proactively minimize waste and avoid pollution through product reformulations, equipment redesign, process modification,...