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When considering any packaging design, the following factors should be considered:
Handling Cycle (to pack, to load, to ship, to unload, to unpack) Damage Risk (scratch, dent, G-force, vibration, drop, environment) Protection Need (low, moderate, high) A change to Handling can decrease or increase Damage Risk.* A change to Protection Need can decrease or increase packaging cost.* *(risk & protection less of concern when original design was over-kill) CURRENT BOX PAPER GRADE
NEXT HIGHER BOX PAPER GRADE
SUMMARY The Customer perceives a 25% box savings using current paper grade when actual savings is only 10% after Cost-of-Use. This comparison does not include other cost factors such as using extra tape, shipping damage claims, and lost customer satisfaction. This scenario is common with companies where Purchasing is unaware of the consequence of their procurements, whether from distance between locations or internal non-communication (e.g. shipping tosses defect boxes, tells nobody). Is your Waste Budget ready for 2017? Obviously, losing money isn’t the ideal business plan. Yet profit will be lost nonetheless on ‘waste’ in 2017.
Increasing ‘sales’ and ‘profit’ are integral to any business forecast, but ‘waste reduction’ rarely gets that same attention. Waste is an operational expense impacting ‘profit’ like sales, but in a negative direction. The Packaging Process Cost Factors (material, labor, handling, shipping) can be linked to multiple areas in every business operation. It’s more than just the ‘price’ of consumables, it’s the total ‘cost-of-use’ impacting a company’s bottom line. In lieu of enduring waste, make your new year happier by discovering unseen operational savings with the help of a professional packaging consultant! Nothing bags, boxes, tapes, labels, and ships itself without some human involvement. Wherever there is packaging, there’s labor associated with it. Even automated packaging machinery needs to be fed something by someone to function as designed.
There are a myriad of packaging solutions possible for the same application with each having its own labor requirement. In any business, labor is a factor that affects both operational cost and productivity. Here’s an example of wasted labor and diminished productivity using a common packaging material. In one factory, we discovered (2) workers tearing 12x12 sheets of bubble from rolls and stacking them inside boxes for later use. This great inefficiency and needless labor cost could be eliminated by using pre-cut bubble sheets instead. Bubble manufacturers have machinery to produce both rolls and sheets. Labor-free packaging does not exist. Solely focusing on packaging cost without considering its associated labor and productivity impact is missing the bigger picture. The packaging cost-of-use should always be fully measured 'before' its procurement. These days, packaging reps are mostly catalog sellers than solution providers. Gaining the advice of an expert packaging consultant remains your best ROI value for cost-cutting, enhanced productivity, and overall workflow improvement. Shopping for lower pricing on consumables is how most companies strive to fulfill a yearly cost-reduction mandate. Given how prices increase but rarely decrease, these yearly saving mandates are difficult to maintain. When price-cutting finally reaches its lowest termination point, companies are then left with seeking other ways to reduce their operational costs.
Material usage reduction (e.g. Lean Manufacturing) efforts aren’t forefront because that requires a greater collective involvement than just price shopping. Adopting a Lean Manufacturing program would require a budgeted allocation of ongoing training and management oversight at additional cost. FACT: 'Packaging' affects all workflow areas of any goods-related business because nothing arrives or is internally handled or shipped uncontained. FACT: Some type of 'Process' is being utilized in each workflow area of every business operation. The 'Packaging Process' is inherently integral throughout every operation making and/or selling physical goods. Gaining an operation workflow analysis from a professional packaging consultant usually leads to a savings discovery well beyond the lowest price termination point of consumables. Packaging audits are provided by suppliers in their SELLING strategy to capture new sales. These FREE audits mandate that all item usage and pricing details be handed over (on a silver platter) for the supplier to beat. If pricing can’t be beat, nothing is gained for anyone. On the other hand, there’s no item selling agenda with an independent packaging consultation.
SUPPLIER PROVIDED AUDIT
INDEPENDENT CONSULTATION
SUMMARY A packaging audit uses accounting history to compare yesterday with today. A packaging consultation focuses on how ‘today’ can be better improved upon tomorrow. An audit targets ‘pricing’ only. A consultation measures ‘cost-of-use’. New efficiency and productivity improvements often result from a consultation, but cost-improvement ideas beyond price are rarely (if ever) realized from an audit. A road sign with the word FREE on it will cause many to pull over. Most agree that we usually ‘get what we pay for’, yet our desire for getting ‘something for nothing’ still obscures the clarity of that certainty.
Whenever we’re not being charged for a service, we’re actually being sold something. A box supplier will gladly talk to (consult) you about using boxes because that’s what they sell and they’ll never recommend anything otherwise. We were once asked to help a client automate their time-consuming box set up process. They’d already budgeted for their anticipated machine purchase. In the first 20 minutes, we realized they actually shouldn’t be using boxes. With (1) product per box, they were loading (100) per pallet. By eliminating the box, that pallet load went from (100) to (600). Changing their packaging process eliminated the box, improved productivity, and increased pallet count (lower ship cost/unit). No FREE packaging consultation would have provided this much improvement and thousands in savings. A “FREE” service has no measurable value unless something is being sold by it and then that ‘value’ is only going to the seller. It's important to remember that all FREE packaging consultations are sales-driven with any benefit to you always being secondary. Corrugated paper standards in use today are a mixture of the old and the new. To keep things simple, we’ll use the terms ‘Mullen’ for the old and ‘ECT’ for the new. The Mullen standard focuses on sidewall surface strength (horizontal penetration) while ECT (Edge Crush Test) is based on edge compression resistance (vertical crush).
So which packaging standard is most important and often used? The key is to know which standard best fits each packaging application. Corrugated paper is produced and available for both the Mullen and ECT box standards and both are widely in use. The bigger question might be…why are two standards still in use today? Cost-reduction was the motive for creating a new standard and box penetration resistance became its sacrificial lamb. What effect did this material savings have on shipping damage claims? That all depends on what’s being boxed and how it’s being shipped. Packaging sales reps will often offer ECT based savings as an easy (lazy) way to capture more business. Changing boxes from the Mullen to the ECT standard could provide some material cost savings, but it might also result in creating more damage claims and unsatisfied customers. It’s not always cheaper or better to change from the Mullen to ECT standard and a non-biased analysis should assist in that selection. This is truly a task better left to a packaging consultant than guesswork or trial and error. It’s commonly understood that chipboard (folding) cartons are mainly used to sell things and that corrugated (cardboard) boxes are mainly used to ship things.
It’s rare to see ‘chipboard’ material being used as a shipper, yet not unusual to find ‘corrugated’ being used for retail cartons (unseen by the untrained eye). The machinery used to convert chipboard and corrugated materials are similar in nature but different in technology (high vs. low tech) which directly impacts their operational cost. Some other differences include their tolerance standards, material price breaks, and industry lead times. It’s an easy decision when choosing corrugated boxes for shippers, but not always so easy when selecting the best material for retail box needs. A myriad of questions must 1st be asked and answered. Yet some of these questions may never be asked by sales reps having an agenda of selling you their products. Gaining the expert advice of a packaging consultant having no skin in that game ensures your decision in selecting the best packaging materials will be informed and a wise one. The only time sales reps attempt to provide any savings is when they're bidding for your business. After they have your business, expecting current supplier reps to seek and provide you with any new savings is the same as expecting them to purposely and willfully lose money on your behalf from lost sales.
Given this, Buyers must periodically solicit bid requests in an effort to lower their current pricing, but that savings potential greatly diminishes as the lowest price termination point is eventually realized. Further price-cutting attempts then become just an exercise in futility. When item pricing can't go any lower and your local "packaging expert" suppliers won't offer any new savings improvement, where do you go for new innovative packaging cost-saving ideas? The AZ Packaging Consult Group remains your best option for finding new ways to reduce operational packaging costs. Unlike your packaging suppliers, we're bias-free and unrestricted in the saving solutions we'll recommend. Hello and welcome to our 1st blog entry!
AZ Packaging Consult Group is the culmination of decades selling experience in the packaging industry. We discovered early on that the main focus of practically all packaging purchases is primarily ‘commodity’ and not ‘process’ driven. The plethora of packaging materials available can easily overwhelm both distributor reps and end-user customers alike in their search for the best solution. Recognizing the greater importance of ‘process’ over ‘commodity’, our packaging solutions approach has steadily improved and been honed to the cutting edge method we use today. AZ Packaging Consult Group offers its process-driven analysis solutions approach without commodity interest or bias. In other words, we won't only recommend the packaging items or machinery that we sell...because we don't sell any! |
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This blog author has a myriad history of successful packaging solutions in process and materials from the manufacturing to distribution channels. Archives
April 2021
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