T en years ago when packaging consultant Tom Blanck would try to talk to people about the cost-savings potential hidden in packaging, he’d receive a lukewarm reception. It was simply not seen as a high priority.
But that all began to change in the past five years. As transportation and warehousing costs rose, companies realized
that packaging offered a fresh opportunity to cut waste out
of the system, he says.
Despite that newfound awareness, many companies are
still struggling to identify where exactly they can cut costs in
their packaging without creating bigger problems down the
line. A good place to start, say some experts, is with small
incremental changes that can add up to big results. Here are
a few to consider.
1Cut the size of your primary packaging. Sometimes, a small change to the product’s primary packaging (what
the consumer takes off the shelf) can result in a big reduction in overall supply chain costs.
For example, Blanck and his crew of packaging engineers
at the consulting firm Chainalytics once helped a food
company redesign the packaging for its frozen pizza so
that the box’s length and height were reduced by 1/16th of
an inch and 3/8th of an inch, respectively. “It was almost
imperceptible to the consumer,” he remembers. But that
small decrease allowed the company to use a different size
case, which in turn allowed it to utilize the pallet better.
These changes ultimately resulted in transportation cost
savings of over $500,000 per year.
Yet while small changes to the primary packaging can
save them big money, some consumer goods companies
can be leery of making the cuts. “That’s their advertisement
at the store level,” explains Peter Stirling, executive vice
president of the consulting firm Supply Chain Optimizers.
One way to get around that concern is to reduce the
depth of the box while leaving the height and width intact.
This was the tactic Supply Chain Optimizers pursued with
a client that made cake mixes. There was significant “head
space,” or air, at the top of the primary packaging, but the
company didn’t want to lose that advertising space. So
it changed the depth of the box. “Therefore, the product
comes up higher in box, but the consumer still sees the
exact same image (on the box), and the advertising value of
the primary packaging remains the same,” says Stirling. By
reducing the depth of the primary packaging, the company
was able to increase the number of cake boxes it could put
in a corrugated shipping box, which allowed it to fit more
cases on a pallet. The warehouse and transportation savings
amounted to $100,000, Stirling says.
2Change the count. Sometimes you don’t even need to change the size of the packaging; you just need to
reconfigure it so you can fit more product inside. A health
A quarter of an inch here, a few more
items in a box there, and suddenly you’ve
reaped thousands of dollars in savings.
Here are a few small packaging tweaks
that can produce huge benefits.
BY SUSAN K. LACEFIELD
Six small packaging changes
that can save big money
