Our new approach to packaging in logistics
What comes to your mind when you think about packaging? Box? Cardboard? Chest?
All these answers are, of course, correct. However, in logistics, packaging is more than just a container into which someone has packed an item.
Why packaging matters so much in supply chain management
Packaging is an integral and necessary part of the supply chain. At MES, we constantly strive to optimize logistics processes. In this spirit, our packaging team took up the challenge of creating a packaging tailored to our needs and the needs of our customers.
By reducing the number of individual cartons in each shipment and standardizing our packaging:
- the number of parts shipped in one shipment has increased,
- the unit cost of shipping has decreased,
- our new solutions brought big savings for our customers.
How did we improve delivery parameters thanks to packaging?
We were looking for a way to save customer funds. Experience has taught us that the optimal organization of delivery packaging allows you to reduce shipping costs, and this is essential for our customers to be fully satisfied.
Our team spent several months analyzing the packaging, then standardizing it and finally reconfiguring the parts in the packaging. We came to the conclusion that the more parts we can put in a package, the more savings will be achieved on a one-time shipment. We used to use 100 boxes to ship the same quantity of parts, today we’ve lowered that number to 40.
Thanks to the reconfiguration of the arrangement of parts inside individual shipping packages, we were able to fit more elements in the box and reduce shipping costs per unit.
Short calculation: We have a shipping of a full container of parts, that costs a flat rate of $ 5,000. Before optimization, if we shipped 10,000 packages, our shipping cost per package was $ 0.50. Now, thanks to the new procedures, we can increase that number from 10,000 to 15,000 and only pay $ 0.33 per item when shipping.
Suppliers operate in accordance with our guidelines, so there is no risk that the products may be poorly packed or damaged. Mechanical components are packaged according to our new part placement specifications.
Packaging optimization in the supply chain. What conclusions have we drawn?
Here is a quick summary and the lessons we have learned from the reorganization of packaging in the supply chain.
1. You must always be open to change. We don’t adhere to the “if something isn’t broken, don’t fix it” rule.
2. During the reconfiguration process, there was not only one way to repack the box. There were many of them. We took care of each of them, arranged them according to size, weight and shipping costs, and chose the optimal solutions from the point of view of savings.
3. Our team invested in software that helped us reconfigure the part packaging pattern. In this case, the software worked very well, but we also verified it by packaging the parts ourselves.
4. People need time and training to adapt to change. The changes can be good, but in most cases they are hard to accept. Helping our team and suppliers to transition to the new system will be key to long-term success. In addition to developing new specifications and providing training aids, we also take into account that we will all be going through a period where we need to learn new procedures.
Are you looking for a way to optimize the cost of supplying mechanical components for production? Contact us. Packaging optimization combined with EURO METRICS ‘expertise in supply chain management can bring you tangible benefits and solve your logistics problems. Talk to our sales team today!