and beauty company that Blanck and Chainalytics once
worked with saved a quarter of a million dollars by changing the package to allow products to nest inside it differently, which reduced the package profile. The new package also
resulted in a smaller case, which saved materials and drove
cube efficiencies. “It created a 50-percent increase in product density, so there was more on a pallet,” explains Blanck.
When you increase product density like this, it can create
a kind of ripple effect, according to Blanck. “It’s important
to understand that when you increase density and can get
more on a pallet, it means that you are gaining efficiencies
in warehousing and storage and in transportation, and you
are also reducing handling and labor,” he says.
3 Alter the size of the shipping case. Making small adjust- ments to the secondary packaging (the box or case in
which the product is shipped) can also produce big savings.
For example, by slightly altering the size of a case of product
and how it was unitized on the pallet, Chet Rutledge, director of private branding packaging for Wal-Mart Stores, was
able to add an extra layer of product on the pallet. That
extra layer allowed Wal-Mart to get more product into each
truckload shipment. As a result, the retailer was able to cut
down on the number of shipments of inbound product by
several hundred over the course of a year.
4 Leave a gap. And sometimes the changes to the shipping case don’t even have to affect the box’s overall size.
Walking through the DC one day, Rutledge began to wonder whether he could use less material to create the shipping
cases for Wal-Mart’s private-label cereals. At the time, the
company was shipping its cereal boxes in a “full-coverage”
regular slotted carton created by gluing the flaps together.
Could Wal-Mart get away with cutting the size of the flaps
by an inch? The box would now have a gap in the middle,
but it would still be able to safely transport cereal boxes.
Wal-Mart made the change, and it worked. “That (tweak)
saved about 20 percent on the shipping case material
required, which netted a little over a million dollars in
material savings in a year, and all we had to do was adjust
the glue nozzles on the case erector,” says Rutledge. “We
just moved them by an inch.”
5“Rightsize” your carton lineup—which may mean more, not fewer, options. Sometimes, companies try to save
money by limiting the number of shipping boxes and cases
they use. While that can save money on material costs,
Stirling says this often turns out to be a case of “saving
nickels by spending quarters.”
Many times, this effort to reduce complexity means
that the company is shipping products in boxes that are
too large, according to Stirling. To keep the product from
rattling around in the box and becoming damaged, the
company often has to pay more for filler material, and the
product takes up more room in the warehouse and on the
truck than is strictly necessary. Stirling has been part of
projects where increasing the number of boxes available
from, say, nine to 12 has ended up saving the company
around half a million dollars a year.
6 Buy better-quality corrugate. While using a better corru- gated box for your secondary shipping packaging might
raise your corrugate costs, using a sturdier box might end
up saving you money overall, says Stirling. First off, a bet-
ter-quality corrugated box can provide better protection to
the product, which reduces damage. Second, with a stron-
ger box, you can stack more cases on top of one another,
and thus, get more cases on a pallet. This allows you to save
money on storage and transportation.
BUT DON’T GO TOO FAR!
As you make these tweaks to your packaging, be careful not
to go too far. Keep in mind that the primary purpose of
packaging is to ensure the product arrives at its destination
undamaged, Stirling cautions. The quarter of an inch that
you shave off here or the extra product you squeeze in there
should not lead to a higher incidence of product damage.
How do you avoid making that mistake? Blanck says that
any time you make changes to your packaging materials
(especially if you are using a new material), you need to test
it to make sure it will work in a distribution environment.
He recommends testing the packaging at both the case and
unitized-palletload level to see how it handles compression,
shock, and vibration. Drop tests, for example, will indicate
how well your packaging can prevent product damage.
Rutledge adds that it’s important to think about how
all of the packaging components (the box, the pouch, the
case, the pallet, the shrink wrap) will work together as a
total delivery system. It’s not about minimizing the costs
of the individual components, according to Rutledge; it’s
about optimizing the overall system. “That’s where the real
success opportunity is,” he says. c
SUSAN K. LACEFIELD IS AN EDITOR AT LARGE AT DC VELOCITY.
