Packages damaged during shipping can be a major source of preventable costs for a brand. By some estimates, as much as 11% of unit loads arrive at a distribution center with some level of damage. Other estimates say that damaged packages have increased by 19.1% due to the spike in e-commerce demand during the COVID-19 pandemic. Considering that manufacturers spend more than $150 billion on product packaging each year, all that damage can really add up, meaning identifying sources of packaging damage is more important than ever.
While expenses like repair, warranty and shipping costs may be the most obvious, packaging and products that take damage during shipping can harm a brand’s reputation with its consumers and lead to hidden costs like lost market share. To address this preventable source of costs head-on, it’s helpful to know more about root cause of that damage, including when, where and how it occurs as products move through the supply chain.
The Power of GPS Trackers
GPS tracking technology provides detailed, real-time visibility into the conditions packaging and products face throughout the supply chain. Small and relatively affordable GPS trackers can wirelessly report data that helps brands make informed decisions about a variety of critical issues, including where and when packaging incurs damage. This data includes location, temperature, humidity and – perhaps most importantly – acceleration, all reported accurately and in real time.
This insight provides valuable clues that make identifying the sources of packaging damage as simple as reviewing a spreadsheet of output from the trackers. For temperature-sensitive products, temperature data from the sensors provides insight into when and where a temperature excursion occurs, which can help determine if it was caused by an equipment failure or if there’s need for to revise packaging to provide better insulation against ambient temperatures.
When damage is reported, it provides packaging professionals with the ability to see where and when an anomalous event, such as rapid spike in acceleration, occurs. Knowing if the event that caused the damage happened during transit or within a warehouse or distribution center helps determine if the issue is the packaging itself or the way forklift drivers and other handlers are treating the package. If the damage occurs in a warehouse environment, the timestamp will allow management to determine which shift was responsible and train employees on how to handle the product better, reducing the amount of damage that will occur in the future.
GPS Trackers in Action: A Case Study
Adept Group conducted an audit on a client’s packaging costs and identified an opportunity to reduce damage and save on costs by converting one-use wood pallets into more durable, reusable pallets through minor design modifications. To prove the durability and cost saving potential of the modified pallets, Adept conducted a pilot program to establish how many uses the client could get from each before wear and tear made them unusable. Each of the modified pallets used in the pilot was equipped with a GPS tracker to provide real-time visibility into the conditions the pallets faced during shipment.
The trackers provided data on transit times and dwell times at each location throughout the supply chain. They also provided visibility into impacts (brief spikes in acceleration) and other related events that can lead to damage. The prototype pallets were marked to clearly distinguish them from regular pallets and to link them to the identification number of its GPS tracker in case they get separated.
To meet the cost-savings goals for the project, each pallet would need to hold up for a minimum of three transit cycles, with six cycles considered optimal. Four key pieces of data were monitored closely for each pallet – location by date/time, temperature, humidity and acceleration. If a pallet incurred damage that limited its use to fewer than the expected number of transit cycles, the engineer who ran the project needed to know what caused the damage and where and when it occurred.
During the pilot, five pallets incurred impacts/acceleration events that were outside the expected range. The tracker recorded the magnitude, location and time for each of these impacts, making identifying the sources of packaging damage easy. These pallets were inspected to confirm the damage from the events, finding results that ranged from splits in the wood to boards with large chunks missing. The results of the pilot were an enhanced pallet design that could hold up to the expected range of stresses and identification of the locations and shift times that caused damage outside the normal range, which allowed those forklift operators to be trained in how to handle the reusable pallets without causing unnecessary damage. When the modified pallet design was expanded from the pilot program to the client’s entire shipping operation, it saved them more than $350,000 annually.
This case study focused on one specific use for GPS trackers to monitor pallets, but similar applications can be used to monitor conditions throughout the supply chain and distribution environment for packaging ranging from unitized loads to single parcel e-commerce deliveries. Knowing more about the specific conditions a package experiences during shipping provides an opportunity to make changes to the package design and modes of transportation to reduce costly damages.
If you’re noticing a large number of damaged packages that impact your bottom line, get in touch. The Adept team can provide a range of solutions, from a simple packaging audit to a robust, cost-effective GPS tracking program to help you eliminate costly packaging and product damage.