Beat Up Cardboard Box

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.

value optimization

Cost Savings Beyond Sourcing: Corrugated Packaging

In order to optimize packaging-related cost savings, using a holistic approach to evaluate processes, waste, sourcing, and design throughout the entire packaging system is necessary. In most cases, when companies discuss their approach to cost savings related to packaging, it addresses only one element of packaging, such as reducing packaging material.

Optimizing packaging and supply chain costs involves partnering with design and supply chain experts, as well as material suppliers to identify and develop the best quality solution. It involves leveraging experts in logistics, sourcing, packaging design, process efficiency, distribution costs, etc. to identify what’s working well and what can be improved upon.

Adept Packaging’s Value Design Model

In Adept Group’s Value Design Model to Margin Improvement, we leverage our global supplier network to evaluate and identify the best supplier for the challenge at hand, resulting in the lowest total landed cost for our clients’ packaging designs. Through a thorough understanding of the client’s supply chain, needs and limitations, we identify the optimal solution.

After understanding our clients’ needs, our cost savings experts identify areas for margin improvement and then we select the supplier that can offer the highest quality solution.

Corrugated Savings

For example, for corrugated packaging, we’ve partnered with TRG, a supplier with unique machinery, a design ethos that matches ours, and insight into the entire corrugated supply chain. On projects we’ve worked on with TRG, we average:

  • 15-20% material reduction
  • 25-30% throughput increases
  • Up to 80% labor and set up reductions
  • Time and waste reduction to increase total supply chain effectiveness

Avenues to Corrugated Cost Reduction

Depending on the material, component, product and supply chain needs, cost savings can come in the form of:

  • Lightweighting
  • Optimizing use of material
  • Design optimization and automation
  • Design and supplier equipment utilization
  • Pallet optimization and quality improvement
  • Labor and setup reductions
  • Eliminating additional components
  • Update printing methods using the latest technology

Material Reduction through Design Innovation

Through the use of specialized converting equipment, we are able to create corrugated designs that reduce the number of components in the packaging. These unique conditions allow for design innovation for both online and offline execution without sacrificing packaging quality or performance.

Labor Reduction Throughput and Set-up Efficiencies

Combining innovative design concepts with uniquely capable supplier equipment, we are able to develop quick set up designs and revolutionary case automation possibilities. These designs reduce material waste, as well as allow for staffing reallocation due to reduced time needed to set up packaging, both in the warehouse and in-store.

Time and waste reduction to increase total supply chain
effectiveness

In addition to increasing efficiency through packaging design, material reduction allows for maximum pallet efficiency through more product per pallet. The reduction of packaging components leads to less inventory management and increase warehouse space.

By starting with the packaging concept, this process allows for efficiency improvements throughout the entire supply chain, as well as innovation that not only saves cost, but differentiates products in store.

Cost Savings Beyond Sourcing Learning Share

If you’re interested in learning more about cost savings beyond sourcing, check out our December 2019 Learning Share presented by Adept Value Optimization President, Jared Spencer, and TRG Director of Design & Value Engineering, Jeff Jolley. They discuss details and case studies of how our approach has helped some of the most iconic Food, Beverage and CPG companies achieve their cost savings goals.

packaging cost reduction

A Holistic Approach to Cost Savings for the Packaging Industry

Margin improvement for packaging requires a methodology that identifies and evaluates all the sources of cost within the packaging process to reduce waste, optimize for efficiency and add value. Adept Packaging’s Value Design Model Analyzes spend throughout your packaging program, from concept to commercialization. This methodology provides a holistic view of cost savings opportunities, while identifying and correcting inefficiencies.

Evaluate Your Package Design

When designing a new package or remediating an existing design, there are many factors to consider to reduce cost. With new and innovative concepts being engineered every day, rethinking the material, components, and design of your packaging can significantly reduce cost.

When you engage a consultancy like Adept Packaging, companies gain access to incredibly diverse teams of packaging subject matter experts with a multitude of materials, components, processes, and technologies. Experience enables our team to identify the attributes of your preferred packaging design and offer suggestions to improve, amend, and adapt for cost savings.

Know the Drivers Impacting Packaging

Another consideration when designing packaging is e-commerce market growth. Among other drivers in the packaging world, packaging for e-commerce demands attention. Considering the complexity introduced by the additional touchpoints throughout the distribution environment, packaging needs to be robust enough to protect the product and brand integrity. With experts in e-commerce and sustainability, our team can help to reduce the costs associated with damage and product loss.

Analyze Your Procurement Strategies

In addition to packaging design, analyzing your packaging procurement strategies is an important focus area for margin improvement. Often companies use the same supplier for years without evaluating other options. Taking the time to do an analysis of, not only your suppliers but your purchasing schedule will give your procurement team a more transparent view of possible avenues to cost savings.

Through our extensive experience and visibility into the packaging industry, Adept Packaging has developed a thorough benchmark of the capabilities, advantages, and drawbacks of packaging suppliers, original equipment manufacturers (OEM’s), contract packagers and other adjacent companies within the packaging industry. Being supplier and material agnostic, allows us to help you identify the best solution to fit your pricing, quantity and quality needs. 

This process helps in identifying & utilizing new packaging technologies, accelerating project schedules, expediting sample/prototype deliveries, lowering package pricing and enhancing overall technical packaging support to provide you the lowest total landed cost.

Examine Operations Optimization

Often, operations are an area that can be optimized significantly as well. Companies often overlook the maintenance of overall equipment effectiveness; only evaluating it when production volume dips significantly or they’re experiencing an uptick in failures.

Leveraging our operational equipment experts and best in class process efficiency tools, companies have been able to identify areas of improvement in OEE of up to 20%. From line and plant efficiencies to production and process effectiveness, our team will analyze your operations and make suggestions to improve overall productivity and reduce cost. 

Increase Efficiency in Your Supply Chain

Analyzing distribution costs and shipping efficiencies in your supply chain can be another area of margin improvement. From finding more efficient ways to package products for shipment, to examining shipping patterns, there are many different factors that can be reevaluated to reduce cost throughout the supply chain.

Our supply chain gurus have experience working with the most complex regulations, in the most demanding distribution environments in the packaging industry. With an aim to reduce risk, ensure compliance, and safeguard distribution qualification, our team will identify and mitigate any quality issues throughout your distribution environment. 

Value Design Model for Packaging Margin Improvement

Our subject matter experts deploy our Value Design Model to deliver margin improvement and to identify a comprehensive view of process inefficiencies, redundancies, supplier network gaps, material expenditures and areas for improvement within your packaging and logistics departments. 

Utilizing our vast network of SMEs, as well as our extensive supplier network, Adept Packaging provides our clients with immediate process improvements, design specifications, and testing recommendations, as well as other recommendations for margin improvement.

The Adept Packaging Value Design Model, featured in the graphic below, serves as a guide for driving value across your packaging supply chain.

Contact us to help you reduce cost, increase margins and add quality to your packaging supply chain today.

Production line in pharmaceutical company

Cutting Packaging Costs: What Life Sciences Can Learn From Consumer Packaged Goods

Reducing costs of goods has long been a high priority in sectors of the consumer packaged goods (CPG) market, but there’s a lot the Life Sciences industry might be able to glean from the initiatives being enacted for cost savings in other industries. As such, David Foster, President of Adept Packaging put together a recently published article covering the different areas Life Sciences may be able to cut cost that they aren’t necessarily considering right now. Such areas include:

  • Components and Material Tactics
  • Printing
  • Material
  • Production
  • Strategic Cost Savings
  • Increasing Efficiency and Reducing Damage
  • Consolidation and Standardization
  • Design for Efficiency
  • Strategy Implementation
  • Packaging Ownership

While the need to reduce packaging costs in life sciences may never be as heavy a factor as it is in the CPG industry, the need to cut costs is always relevant and will continue to increase.  Increased generic drugs, consumer pressure on pricing, and the need to satisfy shareholders will drive a focus on packaging cost control.  As seen with other drivers, learning from first movers and applying those lessons is an easier way to meet these new objectives.  So why not examine the strategies used by CPG and see if they can be applied to help meet the pharmaceutical industry’s evolving goals and objectives?

Click here to read the full article.