Redesign your packaging to cut storage and freight costs

Many companies don't realize suboptimal packaging is hurting their supply chain, conference speaker says

Corinne Kator, Modern Materials Handling -- Logistics Management, 3/24/2008

PHILADELPHIA—If you want to reduce warehousing and transportation costs, redesigning your shipping cartons might be a good place to start.

“Secondary packaging is a basic building block of a supply chain,” says Jack Ampuja, a faculty member at Niagara University who spoke at this week’s Scope East supply chain conference. But too few companies realize how much their choice of shipping cartons can affect freight, handling and storage costs, he says.

Ampuja, who is also a packaging consultant, offers the example of one of his clients, a shipper of frozen vegetables. After rigorous analysis, he says, the shipper reduced its carton length by .25 inches, width by .375 inches and height by 1.125 inches. The results of these minor adjustments were significant:

·        10% savings in corrugated cardboard

·        20% more cases per pallet

·        21% more cases per truckload

·        a total cost reduction of 17%

Most pick-and-pack operations use too few carton sizes, leading them to ship cartons filled with dunnage and air, Ampuja says. Using just a few carton sizes may garner discounts from corrugated suppliers and simplify the jobs of packers, he says, but those savings are rarely enough to offset losses in distribution efficiency.

He offers the example of a client that reevaluated its mix of small cartons and ultimately saved $1.5 million in carton, labor, dunnage and freight costs.

Choosing the right shipping cartons requires a team approach. “Start by getting together all the people who have an oar in the water,” Ampuja says. A meeting to discuss carton design, he suggests, should include representatives from procurement, marketing, manufacturing and warehousing/logistics.