Rethinking Our Packaging Case Study
A BOX IS A BOX IS A BOX … OR IS IT?
4 out-of-the-box lessons learned from rethinking packaging for supply chain.
When you think of packaging, what comes to mind? Box? Carton? Crate?
All those answers are correct, of course. But packaging is more than just the container that holds whatever’s inside.
Why Packaging Matters
Packaging also is an integral and essential part of supply chain. Because it’s the MES way to seek out new and better ways to optimize supply chain, our Pack Team embarked on a quest to do the same for packaging.
Rethinking our packaging has turned out to be a good thing not just for us, but also for our customers.
In fact, by reducing the number of individual cartons and standardizing our packaging, we:
- Increased total units shipped
- Decreased unit shipping costs
- Passed the savings along to our customers
So, how did we do it? The MES Pack Team shares how and why they did what they did with packaging.
Rethinking Packaging: Q&A
Q. Why did the MES Pack Team embark on an optimization project in the first place?
We were looking for a way to save our customers money. If there’s one thing experience has taught us, it’s that reducing shipping costs is essential to saving money for our customers. We also knew from experience that part quantity was key to rethinking packaging, though it did take us some focused effort to think through everything.
Q. How much time did you invest in figuring out how to optimize packaging?
Our team spent several months analyzing packaging, then standardizing it, and finally reconfiguring parts-per-box. We concluded that the more parts we can put into a package, the better the shipping savings. So, instead of using 100 boxes for product, we now use a fraction of that, just 40 boxes.
Q. Did you find it necessary to change box or skid size?
We did. Not only did we change box size, we limited it, too. Then we configured the parts inside the box-crate. While this reduced our packaging options, it opened us up to better deals and money-saving bulk pricing. Instead of ordering 20 boxes, we might order 100 but at a lower per-box price. We also standardized the size and dimension of both pallets and skids, allowing us to pack more units per crate.
Q. It sounds like you had to reconfigure the parts within the box. Why would that be necessary?
You’re right. Our Pack Team did reconfigure the parts inside the individual box. This allowed us to fit more parts into a box and reduce our per-unit shipping costs. Let’s say, for example, that it costs a flat rate of $5,000 to ship a full container of parts. Before, if we shipped 10,000 units our per-unit shipping cost would be $0.50. Now, with our new packaging arrangement, we can bump that 10,000 units up to 15,000 and pay just $0.33 per unit in shipping.
Q. Congratulations, that’s a 34% cost savings! As impressive as that is, walk us through how you came up with the new configuration.
Thanks. We’re very happy with the savings. Even more importantly, it’s a savings we can pass on to our customers. To answer your question, we used an engineering software packaging tool to help us maximize the space inside the box. Reducing the amount of air space allowed us to safely fit more units safely in each box. We liked that, of course, but we really wanted to test it out in real life. So, we ran trials at our warehouse location, Metrics Works. Not surprisingly, we had great success with it so, we asked one of our suppliers to test our new configuration. We’re still going through the testing phase, but so far, so good. Very good, in fact.
Q. Are you at all concerned that your suppliers may not be able to follow MES’ new packaging specs?
Not at all. Increasing the number of units per box-crate is a top priority for us. For our supplier test, we created visuals of the configuration, layer by layer. Then we transferred the visuals to large poster boards. Our supplier keeps these posters in their packing area and uses them as a reference when training packing team or conducting quality audits to ensure that products are packed within our specifications.
Q. Let’s go back to the engineering software package you mentioned. What kind of investment was needed to use it?
We did make a small investment in new software to help us better configure parts. The payoff, however, has been worth it. Not only did the software help us identify which parts to reconfigure, it also based our new pattern on ranking, A-level parts, faster moving parts, and larger parts. One of our engineers ran several different scenarios to gave us different calculations. We also configured the parts ourselves, too. Our team literally put parts in and took them out to see how many would safely fit without causing the packed box to be too heavy. We had to consider both pallet and customer-directed weight restrictions when finding our sweet spot. Then we calculated the savings using a formula based on our costs, including flat-rate and units-per-crate.
Optimizing Supply Chain Packing: Lightbulb Moments
Now that you’ve heard about our approach, you may be curious why it works so well. Here’s a recap of the lessons we learned when rethinking supply chain packaging.
- Be open to changing the status quo. It would be easy to keep doing things the way we’ve always done them. We, however, are not of the “if it ain’t broke, don’t fix it” mindset. Easy isn’t what makes for best-in-class supply chain. What does is this: continual reflection and innovation. Around here we like to self-audit everything at least annually and sometimes more. We’ve found that we have nothing to lose and everything to gain by examining new trends or educating ourselves about different ways of doing something we’re already good at. Sometimes we do keep things status quo. But that’s only after we’ve confirmed it as a best practice.
- There’s more than one way to skin the proverbial cat. Maybe this isn’t the best way to say it, but we think you know what we mean. During our reconfiguration process, there wasn’t just one, single way to package a box; there were many. We investigated each one, ranking them according to size, weight, and shipping cost. While we didn’t end up choosing all the options, we’re now armed with information should we need to reconfigure packaging again or for another customer.
- Software doesn’t hold all the answers. Our team did invest in software to help us reconfigure the pattern for packing parts in the box. We trusted it, but we also verified it with hands-on, doing-it-ourselves parts fitting. We love software. We even create it. But there’s no substitute for what our teams bring to the table.
- People need time and training to adjust to change. While change can be good, it also can be hard. Helping our team and suppliers make the transition will be key to long-term success. In addition to clearly defining our specifications and providing training aids, we’ve also anticipated that we’ll go through an adjustment period. Once we begin using our new configuration regularly, we may get some feedback that leads to us tweaking things a bit. That’s okay. We’re open to feedback. And our teams and suppliers also are open to feedback in return. After all, we committed to the same goal: saving money for our customers.
To learn more about best-in-class, cost-saving supply chain packaging, talk to our sales team today.
