Right-Sizing, Right-Weighting and Other Cost-Reduction Optimisations
The realities of COVID-19 have presented many new challenges to organisations and their international shipping operations.
The realities of COVID-19 have presented many new challenges to organisations and their international shipping operations. As companies reevaluate their overall strategies, they’ll need new methods to optimise costs throughout their supply chains, which could uncover opportunities for packaging optimisations.
Optimising packaging can lead to immediate savings in transportation costs through increasing product density per truck or sea container. Cost reduction methods such as right-sizing and right-weighting can help organisations slash costs and improve profitability.
“Instead of looking for nickel-and-dime savings on box prices, an optimised packaging program will generate greater savings,” says Johan Månsson, BillerudKorsnäs International Sales Manager. “Especially now, with increased freight tariffs as another COVID-19 consequence.”
Learn more about cost-reduction methods in packaging and how they can save your organisation money.
What Are Right-Sizing and Right-Weighting?
Right-sizing and right-weighting are two key processes to cut costs in packaging. Right-sizing ensures the optimal size of packaging for the product and supply chain, while protecting the product. Right-weighting optimises the materials used in the packaging so the product is still protected while reducing overall weight. Both processes offer cost reduction, but there are other benefits.
“Both right-sizing and right-weighting reduces packaging material, which impacts sustainability,” says Lani Ernst, BillerudKorsnäs Global Account Manager. She notes as an example the strength and leadership that Amazon and its Frustration Free Packaging program has taken in its mission to reduce packaging material while providing optimal customer experience.
Why You Should Consider Right-Sizing and Right-Weighting
Right-sizing and right-weighting packaging can reduce packaging costs throughout the entire supply chain, which also means reduced transportation costs, increased space in distribution centers and reduced product damage. The cost benefits of right-sizing and right-weighting provide a ripple effect through organisations, with benefits that affect everything from supply chains to the end user.
Specifically, making changes to packaging sizes and weights can help:
- Increase customer satisfaction. Packages that are too large for their product can frustrate customers with extra paper, packing peanuts or bubble wrap. Properly packaging your item highlights your commitment to customer experience and environmental sustainability.
- Minimise carbon footprint. Sizing a package correctly eliminates excess material in production and waste. It also reduces extra space the package takes up during shipping, and as a result reduces the shipment’s carbon footprint.
- Offer better protection. Large packages have more space to fill and create more chance that a product will shift and damage inside a box. A right-sized package protects the product while using the least amount of materials.
- Reduce shipping costs. Dimensional weight measures the space a package occupies in relation to its actual weight. The higher the weight of your package, the more expensive it will be to ship via air freight. Using lighter weight materials will lower your dimensional weight and save you money on air shipments.
Why Now Is the Time to Make Cost-Cutting Decisions
As businesses begin to reopen in the wake of COVID-19, they are facing new circumstances. In a survey of business owners, 60% indicated they anticipate their revenue will decline in the next six months.
For businesses trying to survive COVID-19, cutting costs is an effective strategy. Many organisations are looking to defer bill payments, cut payroll, seek less costly options or cut expenses.
One key way to save money is by optimising packaging, says Mark Maxwell, BillerudKorsnäs Global Accounts Manager.
“Optimising packaging can be a smooth process when planned well with an organisation like BillerudKorsnäs,” Maxwell says. “The savings we provide might free up cash flow for companies coming out of COVID-19, which can be used for product development or other areas.”
How a Packaging Review Can Help Your Business
A packaging review or audit conducted by BillerudKorsnäs is a two-step process. Our audit provides the following functions:
- Review product packaging to identify areas of improvement
- Review customer supply chains through a physical visit to distribution center(s) to see how the product flows inbound to outbound.
To conduct this review, organisations will need to provide basic information such as annual product volumes, the number of products per case and the number of cases per truck or container. Companies don’t have to worry that their proprietary information will make its way out into the wild when an audit is performed. Maxwell says BillerudKorsnäs always signs a non-disclosure agreement with a customer before performing an audit.
“After the audit, we’ll be honest with the customer and advise whether or not we can help,” Maxwell says. “If we find potential savings, the timing of implementing those changes depends on the complexity of the project.
“Simple shipping cartons can be implemented with savings realised in a few months. Retail packaging projects could take longer due to development of new structural designs, artwork and depletion of current suppliers inventory,” he says.
If your organisation is ready, contact us to request a packaging review. This audit will be a multidimensional examination of your packaging and supply chain to discover cost-saving opportunities.
Find out more about five critical steps in the strategic packaging development process with our eBook, “From Concepts To Reality.”