Cost Savings Through Packaging Damage Remediation

Packaging that doesn’t withstand its distribution environment can lead to staggering costs for a brand. The good news is that you can not only eliminate those sources of cost, but also improve quality and achieve bottom-line cost savings through packaging damage remediation.

Costs incurred because of packaging damage can add up quickly. There are the up-front costs, including the cost of the damaged product and the cost of return shipping, but also a handful of costs that are less obvious. These include items like reworking salvageable product, production schedule disruptions to replace non-salvageable product, re-shipping the order and difficult-to-calculate costs like lost business and damage to brand reputation.

Thoughtfully completing the remediation process can lead to a number of desirable outcomes. A primary goal of this process is to reduce or eliminate warranty and replacement product expenses. The process may also reveal opportunities to optimize wasted space within the packaging and wasted space when the product is stored or shipped in bulk (e.g. on a pallet). It may provide an opportunity to reduce the impact of inefficient choices in packaging design or packaging materials. New packaging design also provides an opportunity to distribute the new designs for competitive bidding by packaging suppliers, which frequently allows a brand reduce costs.

Once you understand the costs of insufficient packaging and the benefits of thoughtfully redesigning packaging to fit a product’s needs, you’re ready to understand the steps required to address these packaging challenges.

Step 1: Identify the Problem

Determining the root cause of the problem can be challenging, but the rest of the process depends on an accurate understanding of when and how product damage occurs. In rare situations, this root cause may be easy to identify. For the majority of situations, it takes some work to pinpoint the causes that lead to packaging failure. It begins with conducting a forensic analysis of the product, its packaging and its distribution environment to gain a better understanding of the product’s packaging needs and the problems you’ll need to solve to make sure the packaging meets those needs. This step involves careful examination of how the product fits in the current packaging, how the current packaging performs during storage and shipping and why it fails to adequately protect the product.

Determining the cause of the damage will require analysis of each stage of the product’s distribution cycle, from the moment it leaves the production line to the moment it reaches the consumer or end user. You need to understand how densely the product is packed when stored in distribution centers and during shipping. For e-commerce products, you must also consider the conditions the package faces during last-mile delivery.

Step 2: Design Engineering

Once you understand your root cause and the conditions a package faces throughout it’s distribution cycle, you can begin redesigning the packaging. Reviewing the 2D and 3D files used in the design of the original packaging provides a head start for the designer. This baseline packaging data provides a starting point from which they can improve upon previous packaging to eliminate its issues. Otherwise, the designer may need to reverse engineer specifications from the current design by breaking down sample packaging.

With this baseline in place, new designs can be compared against the previous packaging specs to confirm the new packaging will solve the issue. Design is an iterative process, and it may take several cycles through designing and the ensuing prototyping and testing steps before a design passes and the necessary stakeholders approve.

Step 3: Develop Prototypes

Once an approved design is in place, it’s time to create prototypes that can be used for testing. Generally, it is a best practice to have the current packaging provider create the new prototype design. When that is not an option, the best qualified supplier should be able to produce the prototype.

The prototype state is also a good opportunity to solicit proposals from several qualified vendors to compare prototype designs and material costs. This is an important time to consider different options and identify opportunities for cost savings.

Step 4: Fit/Check/Approve

With prototypes in hand, it is important to compare their physical characteristics against the design specifications for accuracy. After reviewing the fit, it’s time to check that the product fits within the packaging and evaluate protection characteristics to ensure they match the intent of the new packaging design.

Remember, this is an iterative process, and it may require a few passes through these design and testing cycles until a prototype passes and can be approved for lab testing.

Step 5: Package Design Testing

Package design testing can begin once an approved prototype emerges from the previous steps. Before the product and prototype packaging can undergo testing, it is important to reach a consensus on the testing criteria the lab will use. Discoveries made during root cause analysis can help guide pass fail criteria, as you will know when and how the previous packaging typically failed. 

In addition to establishing pass/fail criteria, you must use your understanding of the product’s distribution environment to determine which testing specifications are appropriate. Different tests may be appropriate for packaging that will travel less than load (LTL) – meaning less than a full truckload, via rail, via air, as a single parcel, etc. Once you know exactly what kind of testing the packaging requires and what the pass-fail criteria will be, the product and package should be sent to an accredited packaging lab.

Keep in mind, this step is part of the iterative portion of this process. The packaging may fail its testing and require modifications before going back to the lab for additional testing.

Step 6: Test Result Analysis

After the packaging design passes its tests, the key stakeholders need to review the package design, cost elements and the testing results before agreeing on a final design. This step is critical because several departments within your organization, often with different priorities, need to buy into changes from the previous packaging. A cost benefit analysis is an important part of this stage because it is important to demonstrate not only that the new packaging addresses the damage issues of the previous packaging, but also to show the cost advantages and disadvantages of the new package design.

In many cases, experienced packaging professionals will be able to find opportunities for bottom-line cost savings on packaging materials and you will be able to demonstrate cost benefits that extend beyond eliminating the costs of damaged product.

Step 7: Design Approval

Armed with successful test results and a cost benefit analysis, your organization’s decision makers will be well positioned to approve the new packaging design. It is important to document all approvals as proof that various groups within the organization reviewed and signed off. If future problems arise with the new packaging, this documentation not only creates a record of who signed off on the design, but also helps determine who should be involved if the packaging needs to undergo additional revisions.

Step 8: Documentation

Because the process can be iterative, it is important to revisit design documents to confirm they include all modifications made to the packaging since the original design drawings were approved. It is also important to document process steps so that the product will be packaged correctly every time, even across different packaging locations and personnel groups. These specifications are a great way to keep a record of all packaging components, their relationship to the overall packaging schematic and any labor required to successfully package the product.

While the individual steps of the packaging damage remediation process are fairly straightforward, all the small, individual decisions made along the way can make this a complicated task. An experienced packaging professional can ensure all those small decisions remain organized and add up positive changes that not only improve quality, but also take advantage of opportunities for cost savings.

Done well, this process can virtually eliminate the costs of damaged product, return logistics, product rework and potential damage to brand reputation, and careful review can also reveal opportunities to produce better packaging at lower costs.

If you’re experiencing quality issues with your packaging and would like to identify a solution that remediates those problem and lowers costs, get in touch. We have experts in packaging damage remediation and cost savings that help you identify and implement long-term solutions to your packaging challenges.