Using Packaging to Increase Profits: A Packaging and Logistics Case Study

When was the last time you performed a serious review of your industrial or retail packaging design?   Did you know that packaging, when designed correctly can help control cost throughout numerous departments within your company? Using Packaging to Increase Profits: A Packaging and Logistics Case Study

When we look back at the underlying issue that has affected a majority of some of our biggest clients, many times it boils down to one issue: Packaging design.

We’ve seen it time and time again: Too much packaging, too little packaging, damage in transit and redundant handling!! To trim cost, many buyers even send out bid packs seeking the lowest packaging cost. If they’re lucky, and there’s no cost increases on the horizon, they might seek out a whopping 3% cost reduction over their current vendor, only to later find that the new vendor either underbid it, or worse, misses the delivery late or prices out inferior materials.

Remember the old saying “Pick Two??” Do you want Quality, Price or Service?

More often than not, we have found the key to true cost savings can better be achieved by reviewing your packaging’s design. New designs and materials can sometimes bring opportunities to directly reduce cost, but real savings is found elsewhere. When packaging is designed correctly, it should deliver tangible benefits to several departments within your organization. Well-designed packaging should provide:

 

  • Reduced labor cost in production and assembly.
  • Minimized number of components to manage in inventory/storage.
  • Increase sales with “customer compliant’ designs.
  • Cost saving for purchasing.
  • “End user” disposal and environmental impact and more.
  • Reduce or eliminate damage or claims due to damage in transit.
  • Ability to increase your company’s Environmental score card.

Even if you wind up paying a dime more per package, you may find that in reality, you saved a quarter per unit through increased productivity.

In addition, packaging redesign can even help to improve your company’s environmental score card! Being able to incorporate eco-friendly materials into your packaging can help open new sales opportunities with major retailers and even European trade.

We know how difficult it can be to formulate and execute a plan that brings the right results.  That’s why we recommend that you first select the right business partner.   Scientific research suggests that if you approach a corrugated manufacturer with a question, 10 out of 10 times you’ll get a corrugated answer!

To find true solutions, it’s important that you find an independent source that is well-educated in a wide-variety of packaging materials. Not all packaging companies are created equal either, so we recommend that you pre-interview your business partners very carefully. In every project that Eden takes on, we collect and develop a long list of details in order to create a plan that will deliver exceptional results.

With a long family history from within the cargo industry, combined with over 31 years in packaging, Eden Outsource has the capacity to help most any organization to streamline their operations.

The following is a case study on a DVR manufacturing company that Eden worked closely with. The results speak for themselves!

 Packaging and Logistics Case Study:

 A large communications company was using a non-recyclable polyether foam insert to protect their DVR units during the shipment process. These DVR units were dropped shipped straight to individual homes via UPS and at times, FedEX, and, most times if there was a dog sitting in the front yard, most packs were just tossed over the fence!!

The original old ether design consisted of bulky, space consuming non eco-friendly foam, which is also known to cause respiratory problems in the production process.

Due to the foam being a non-eco-friendly material, the homeowner’s only option was to dispose of the bulky foam through their local waste collection, all of which ended up in landfills.

After consulting with the Eden Outsource team, a packaging redesign overhaul began by selecting post consumer recycled foam material not only provided the protection necessary to survive a toss over the fence, but could also be disposed of in the recycling can!

Eden’s new foam design consumed 30% less warehouse space, and provided a direct 30% reduction in packaging costs. In addition, our new eco friendly foam weighed two pounds less than its predecessor. This weight reduction trimmed shipping costs by two pounds per shipment.
Based on their volumes at the time, they achieved a documented saving of over $380,000 annually!! Over the following 5 years, $ 1.9M when straight back to the bottom line, with no added effort! Man, that’s a lot of dog toys!

No matter how you look at it, packaging is, and remains a very important commodity to every manufacturer. And if your company is struggling to maintain profits, we highly recommend taking a moment to research this area with your team and specialists who really understands packaging….like the folks at Eden!

Contact the team at Eden Outsource to see what we can do for your organization.
A specialist can easily be found at 949.455.0005.