Packaging optimization: a personal example

Packaging optimization: a personal example

We just received a gift for our granddaughter. At first glance, most recipients would probably think that the pack looked “good” or “OK.” But let’s be honest. What would be your answer? This is a job for packaging optimization if I’ve ever seen one.

Packaging optimization in real life

We think this is a pretty open and shut case of bad packaging. This is in no way to pick on individual shippers, fulfillment organizations, 3PLs or small businesses. We all do things that don’t make sense over time—legacies of the business we started 10, 50 or even 100 years ago. Think about how silly Blockbuster looks now that Netflix has upended their business model.

Here are 4 really big reasons why this package is awful and costs everyone more money than necessary:

  • Air – the void fill air bags are a waste of money. Trust me here. Gone. Probably $.05-$.06 in cost, plus labor, plus machinery, plus another item to buy, store and pick.
  • Shipping cost waste – the shipping carton has a cube of 7.66 cubic feet and would ship as EIGHT pounds – based on “dimensional weight”. Actual weight is less than 1# (but would ship as 2# at it’s actual size). Major shipping cost waste! Figure out the cost delta via your program. It’s big; a 6# difference in shipping cost.
  • Corrugated material waste – the brown shipping carton contains 6.4 square feet of corrugated material, yet the product inside is only 2.4 square feet in area. This equals 4 square feet of corrugated waste. At$.07 per SF, that is a waste of .$.28 in corrugated material. Plus you have to purchase, store and pick many, many different size cartons; labor waste, and warehouse optimization takes a hit too.
  • Labor – this shipment was packed by hand. At industry wage and takt time, the labor cost just to pack is about $.35. This is not the best or most effective use of labor. Let’s go out on a limb, not knowing the complete operation, part SKU mix, goals & objectives of the leadership and on and on. (There is a LOT of work here, but follow the exercise). So let’s make an assumption that full automation here is possible, and at a one year payback. Labor could drop by approximately 90%. Yes, 90%. That $.35 cost to pack could turn into $.035.

Packaging optimization in summary

No air pillows means a 60% reduction in corrugated materials, smaller shipping space, lower labor cost over the near term, etc, etc, etc.

If you are a 3PL, fulfillment or pick, pack and ship organization, you owe it to yourself to explore packaging optimization. If you are at all interested visit http://plspackideas.com or simply contact us for a free consultation.

 

John Moore – Founder

Packaging & Logistics Solutions (PLS)

http://plspackideas.com

John is responsible for company efforts to drive value and differentiation in packaging for fulfillment, e-commerce, and manufacturing customers. He has 25 years of packaging leadership experience and has served at the helm of IQpack since early 2013.