Month: August 2020

Inventory means all the materials (may be raw or finished parts/components, in process or finished products, castings and consumable tools, electrodes etc.) recorded on the ledgers/books of the organization and kept in its stocks (in the store or warehouses) for some period of time.

So inventory is an essential part of an organization. Every enterprise/business or manufacturer concern however big or small has to maintain some inventory.

Functions

From the definition of inventory, it is clear that it is related to stock of raw materials, semi-finished and finished products/items maintained by the enterprise/business/organization.

The following points will explain the concept and functions of inventory:

(i) Inventories Serve as Cushions:

Against shocks due to demand/supply fluctuations, it separates different manufacturing operations from one another and makes them independent so that each operation can be performed economically.

For example, an organization has to deal with several consumers and vendors and due to their unpredictable behaviour there are always fluctuations in demand or supply of goods which disturbs the schedule of the enterprise.

Inventories absorb these fluctuations and help in maintaining undisturbed production i.e., we decouple the manufacturing activities from the consumer and vendor successfully by cushions of stocks.

Furthermore purchasing/order of raw material can be carried out independently of the finished products distribution and both of these activities can be made low cost operations say by ordering raw material and distributing products in one big lot than in small batches. Thus it leads to better utilization men and machines besides economy.

(ii) Inventory, a Necessary Evil for Any Enterprise:

Inventories require valuable space, capital and other overheads for maintaining it. The invested capital remains idle till the stocks are not consumed. On the other hand, smooth working of the organization is not possible without inventory so it is a necessity. Further it has been observed that costs of not having inventory (stock out conditions) are usually greater than costs of having them. Thus inventory is a necessary evil.

(iii) Inventory Provides Production Economies:

Purchase in desired quantities nullifies the effects of change in prices or supply. Stocks bring economy so purchase of various inputs due to discounts on bulk purchase.

(iv) Maintenance of Smooth and Efficient Production Flow:

Maintains smooth and efficient production flow thus keeps a process continually operating.

(v) Creation of Motivational Effect in Decision Making:

Creates motivational effect in decision and policy making e.g. a person may be tempted to purchase more if inventories are displayed in bulk.

Importance

The following points give the importance of inventory to an organization:

(i) Good consumer service can be provided and maintained in the organization.

(ii) Enables smooth and efficient production flow of goods/items.

(iii) Provides protection against uncertainties regarding demand and supply of materials and output.

(iv) Various production activities can be independently and economically performed,

(v) Ensure better utilization of men, machines and materials.

(vi) With bulk purchases quantity discounts can be availed.

“Mission” is a set of customer service goals to be achieved by the system within the specific market/product context. A successful achievement of defined mission involves a large input from various activity centres of the firm. Hence the logistics costing should be able to identify the total costs of meeting a desired mission. This is referred as Mission Based Costing.

Essentially Mission Based Costing seeks to identity unique costs that are generated as a result of

Specific logistics activities aimed to achieve certain objectives in a specific customer/market. There is no point in incurring additional costs if the additional benefits do not justify the same.

Functional Inputs to Logistical Management

There are four stages in implementing an effective Mission Based Costing.

• Define the customer service segment This is required as all customers do not have the same service requirements
• Identify factors that produce variations in the cost of service: for example – reducing the frequency of delivery .will reduce the costs.
• Identify the specifies specific resources used to support customer segments.
• Attribute activity cost by customer type or segment.

Material handling may be considered a specialized activity for modern manufacturing units. From the time, the input material or raw materials enter the industrial unit and go out of the unit in the form of finished products, these are handled at all stages in between, no matter, on the shop floor or in the stores.

It has been estimated that the average material handling cost is roughly 30 to 60% of the cost of production. This is so since majority of production time is consumed in handling materials before, during and after the manufacture. However, this cost can be reduced by proper selection, operation, maintenance and layout of material handling devices but cannot be totally eliminated.

“Material handling” refers to the movement of materials from the store room to the machine and from one machine to the next machine or work station during the process of manufacture.

The material handling problem must be analysed thoroughly at the time planning of various machines and tools needed before erection of factory building.

While designing new plants, materials handling is a prime consideration and several existing plants can be modified by the utilization of modem material handling devices. The cost of production is decreased by the use of these devices since these devices increase output, improve the quality and speed up the deliveries.

Functions of Material Handling:

Following are the important functions of material handling:

(i) To select machines/equipment and plant layout to eliminate or minimize material handling requirements, i.e., to select most efficient, safe and appropriate material handling equipment, which can fulfil material handling requirement at minimum cost.

(ii) To minimize the material handling cost by way of:

(a) Minimization of movement of semi-finished items during the production process.

(b) Planning movement of optimum necessary pieces in one unit.

(c) Minimization of distance moved.

(d) Increasing speed of material handling operation through mechanization.

(e) By elimination/minimization of back tracking and duplicate handling.

(f) By utilization of gravity for material handling.

To employ mechanical aids instead of manual labour to accelerate material movements.

Objectives of Material Handing:

The common hand shovel and the baskets were the only material handling tools, until some years ago, but now due to increasing demand for sophisticated handling equipment, material handling system has been revolutionized all over the world.

The main objective of the efficient materials handling is to decrease the costs. Materials handling equipment does not come under the production machinery but is an auxiliary equipment which can improve the flow of materials which in turn shall reduce the stoppages in production machines and thus increases their production.

In brief followings are the objectives of material handling:

(1) Costs Reduction by:

(i) Decreasing inventory level.

(ii) Utilising space to better advantage.

(iii) Increasing productivity.

(2) Waste Reduction by:

(i) Eliminating damage to material during handling.

(ii) Being flexible to meet specific handling requirements of different nature.

(iii) Making proper control over stock during in and out handling.

(3) Improve Productivity by:

(i) Increasing productivity per man-hour.

(ii) Increase in machine efficiency through reduction of machine down time.

(iii) Smoothing out workflow.

(iv) Improving production control.

(4) Improve Working Conditions by:

(i) Providing safe working conditions.

(ii) Reducing worker’s fatigue.

(iii) Improving personal comfort.

(iv) Upgrading employees/workers to productive work.

(5) Improve Distribution by:

(i) Decreasing damage to products during handling and shipping.

(ii) Improving routing.

(iii) Improving location of storage facilities.

(iv) Increasing the efficiency of shipping and receiving.

Advantages of Scientific Material Handling:

1. Cost Reduction by:

(a) Decreasing the inventory costs.

(b) Utilizing the space to better extent.

(c) Increasing the overall production of the system.

2. Waste Reduction:

(a) Maintaining proper control over in and out of stock handling.

(b) Eliminating damage to material during the handling process.

(c) Providing flexibility to meet the specific handling requirements of all materials.

3. In creased productive capacity:

(a) Improving productivity per man-hour.

(b) Improving the efficiency of machines by reducing the machine down time.

(c) Smoothing out workflow in the plant.

(d) Improving the production control.

4. Improved working conditions:

(a) Improving the personal comfort.

(b) Reducing fatigue of workers.

(c) Proving safer working conditions.

(d) Upgrading employees for productive work.

5. Improved distribution:

(a) Improved routing.

(b) Improve location of storage facilities.

(c) Improving the efficiency of shipping and receiving.

(d) Reduction in damages of products during handling.

Ultimately, freight costs are all about space: the more you can fit into shipping cases, the more efficient your transportation costs. The right packaging materials help reduce shipping costs, whether you’re shipping from your fulfillment center by the truckload, rail, ocean, or air freight.

While weight plays a role in transportation costs, it’s often a secondary consideration to space constraints. Shipping companies determine costs by calculating the dimensional weight of a pallet or truckload. Dimensional weight refers to the relationship between a package’s weight and the amount of room it takes up. A large package with a weight of seventy pounds will cost more to ship than a more compact package of equivalent weight.

You can reduce shipping costs, then, by minimizing your package design. This can be a problem if your product requires tertiary packaging such as the boxes a third-party logistics fulfillment center may pack the original package in for additional product protection.

Reducing shipping costs requires a close examination of every step in the supply chain. Are your packages the right size for your shipping units? You’ll not only pay higher transportation costs if they’re not but also increase the risk of damage caused during transportation.

The actions of third-party logistics providers must be carefully considered. It only takes one lax fulfillment center to impair your supply chain, either by package mishandling, inaccurate product tracking, or excessive use of tertiary packaging.

At the beginning of the supply chain, consider the type of packaging materials used, how they’re stored, and how containers are constructed. Opting for the lightest, most compact packages possible without risking damage to the contents is a requirement if you’re looking at reducing shipping costs. 

Packaging logistics has become a discipline in and of itself, improving package designs, increasing material choices, and leading to the development of smart packaging. Also, real-time tracking has made it possible to follow a package from packing to delivery, alerting you to exceptions while allowing customers to check delivery progress online at any time.

For companies with multiple fulfillment centers and third-party logistics providers, assembling a supply chain control tower can be invaluable. A control tower oversees all aspects of the supply chain, automatically generating alerts on deliveries and exceptions while using machine learning to improve efficiency and reduce shipping costs.

Smart Packaging

Smart packaging systems use real-time tracking, active packaging sensors, and intelligent packaging to move packages through supply chains, increase consumer engagement, and ensure the freshness of food and other perishable items. Smart technology also helps locate missing items and reduces the risk of theft.

Smart packaging is any form of packaging that offers extra benefits to the consumer, the supplier, or both. Such benefits could include chemical treatments to prolong food freshness, moisture control, or tracking devices.

Smart technology is made possible by the emergence of the Internet of Things (IoT), where items ranging from major appliances to address labels can send and receive information wirelessly. Smart packaging increases consumer engagement by enhancing the ways consumers can interact with packaging.

1. First Things First: Packaging Must Fit the Allotted Space

Packaging must satisfy countless requirements before it ever reaches store shelves. It can’t capture consumer interest if it’s been damaged, or if it fails somewhere between manufacturer and retailer. Packaging designs must first and foremost contain and protect what’s inside. Additionally, it has to fit pallet dimensions and trucks properly. Then, once it reaches retailers, it must fit on their shelves too. Only after these basic considerations are met will other packaging design features matter.

2. E-Commerce Friendliness: Increasingly Important

Packaging overall is shifting toward a more consumer-directed role, and many CPG brands are ramping up their e-commerce practices for their online sales channels. But for many brands, the same consumer packaging designs that work for brick-and-mortar retailers aren’t quite right for e-commerce because products skip retail shelves and go from warehouses straight to consumers. Some find it more logistically practical to have separate SKUs for e-commerce to minimize confusion and open up new packaging options for products sold via e-commerce.

3. Support for Brand Sustainability Goals

Consumers and retailers increasingly prioritize sustainability, and brands are doing so as well. Not only can sustainability initiatives appeal strongly to consumers and retailers, but they can also result in savings to brands as well. For example, retail giant Walmart wants to have 100% recyclable packaging for its private-brand products by the year 2025. Packaging designs that use materials efficiently and responsibly may face an initial investment, but it will pay off in terms of reputation quickly, and savings on materials will accrue over the long term.

4. Frustration-Free Packaging for Consumers

Making product packaging less frustrating for consumers often means using less packaging, and this often aligns well with sustainability initiatives. E-commerce giant Amazon offers incentives for seeking its own Frustration-Free Packaging certification prior to August 1, 2019. They contend that packaging that meets its requirements makes order fulfillment faster, while reducing total packaging and making it easier for consumers to use and recycle. But even without Amazon’s influence, frustration-free packaging makes sense due to simple consumer demand for packaging that’s easy to use.

Brands that are experts on their consumer packaging supply chain are better positioned to meet the needs for consumer-friendly packaging that appeals to consumers from retail shelves or the doorstep in the case of online orders. They’re also in a better position to reduce packaging waste, saving money and supporting sustainability. In short, the packaging supply chain is one of the most important elements in today’s branding strategy, and brands that understand this have the best chance of meeting their goals.

What is considered when trying to optimize packaging?

The process considers the following factors:

• Cost reduction
• Physical parameters
• Packaging materials
• Environmental impact
• Packaging content
• Smart packaging solutions
• Damage and return-cost reduction
• Handling and transportation requirements
• Freight costs and pallet dimensions

The selection of materials handling equipment requires the attaining of proper balance between the production problem, the capabilities of the equipment available, and the human element involved. The ultimate aim is to arrive at the lowest cost per unit of material handled.

Equipment factors to be taken into consideration may well include the following:

Adaptability: the load carrying and movement characteristics of the equipment should fit the materials handling problem.

Flexibilitt: Where possible the equipment should have flexibility to handle more than one material, referring either to class or size.

Load capacity: Equipment selected should have great enough load-carrying characteristics to do the job effectively, yet should not be too large and result in excessive operating costs.

Power: Enough power should be available to do the job.

Speed: Rapidity of movement of material, within the limits of the production process or plant safety, should be considered

Space requirements: The space required to install or operate materials handling equipment is an important factor in its selection.

Supervision required: As applied to equipment selection, this refers to the degree of automaticity designed into the equipment.

Ease of maintenance: Equipment selected should be easily maintained at reasonable cost. Environment: Equipment selected must conform to any environment regulations.

Cost: The consideration of the cost of the equipment is an obvious factor in its selection.

Variable Path equipment

Variable path equipment has no restrictions in the direction of movement although their size is a factor to be given due consideration trucks, forklifts mobile cranes and industrial tractors belong to this category. Forklifts are available in many ranges, they are maneuverable and various attachments are provided to increase their versatility.

Material Handing Types of equipment may be classified into five major categories.

Conveyors

Conveyors are useful for moving material between two fixed workstations, either continuously or intermittently. They are mainly used for continuous or mass production operations indeed, they are suitable for most operations where the flow is more or less steady. Conveyors may be of various types, with rollers, wheels or belts to help move the material along: these may be power-driven or may roll freely. The decision to provide conveyors must be taken with care since they are usually costly to install; moreover, they are less flexible and, where two or more converge, it is necessary to coordinate the speeds at which the two conveyors move.

Industrial trucks

Industrial trucks are more flexible in use than conveyors since they can move between various points and are not permanently fixed in one place. They are, therefore, most suitable for intermittent production and for handling various sizes and shapes of material. There are many types of a truck- petrol-driven, electric, hand-powered, and so on. Their greatest advantage lies in the wide range of attachments available; these increase the truck’s ability to handle various types and shapes of material.

Cranes and hoists

The major advantage of cranes and hoists is that they can move heavy materials through overhead space. However, they can usually serve only a limited area. Here again, there are several types of crane and hoist, and within each type, there are various loading capacities. Cranes and hoists may be used both for intermittent and for continuous production.

Containers

These are either ‘dead’ containers (e.g. Cartons, barrels, skids, pallets) that hold the material to be transported but do not move or ‘live’ containers (e.g. wagons, wheelbarrows or computer self-driven containers). Handling equipments of this kind can both contain and move the material and is usually operated manually.

Robots

Many types of robots exist. They vary in size, and in function and maneuverability. While many robots are used for handling and transporting material, others are used to perform operations such as welding or spray painting. An advantage of robots is that they can perform in a hostile environment such as unhealthy conditions or carry on arduous tasks such as the repetitive movement of heavy materials.

The choice of material-handling equipment among the various possibilities that exist is not easy. In several cases, the same material may be handled by various types of equipments, and the great diversity of equipment and attachments available does not make the problem any easier. In several cases, however, the nature of the material to be handled narrows the choice.

Whether the movement of material and equipment is by rail, sea, air or road, adequate facilities for their free flow to and from the factory must be ensured. The factors which affect progress at the construction stage, and production and dispatches after commission, have been discussed below:

1. Terminal Facilities

Terminal facilities are usually grudgingly provided. One reason for this is that any delay or any in convenience caused to truck operators is not a loss to the project. It is treated as a loss to the carrier. In some cases, this may be true. However, this usual incidence of stoppage or regulation of the production process can be minimized, if not eliminated.

Often extreme stinginess is expressed in planning for these facilities, which include storage space, and loading and unloading arrangements in a suitable area. If the storage space is not adequate or if the traffic is exceptionally heavy, production suffers inevitably. Since transport requirements of each project are different and depend on its location, physical availability of infrastructure, etc, it is not advisable to prescribe one uniform scale of terminal facilities. They must be worked out for an individual project on the basis of its own specific requirements.

Storage, loading and unloading facilities, good quality roads, which are usable throughout the whole year, and suitably, designed yard for railway wagons have to be planned as a part of terminal facilities. It is also essential to pay special attention to the maintenance of loading and unloading equipment, the design, location, length, height and other features of loading and unloading platforms, etc., and the maintenance of circulating area and roads where heavy vehicles ply.

The overall savings in transport rates would more than justify the expenditure incurred on the provision of additional facilities. This costs not been recognized by the planners of individual projects.

For rail movement, not only sufficient number of loading lines, but also sufficient number of marshalling, examination and holding lines must be planned for. These lines must be suitably connected with one another to ensure smooth shunting operations. The configuration of lines (yard designs) is more important than the number of lines in the yard, for the requirements of prime mover (shunting engines) can also be cut down by a suitable design of yard.

2. Vehicles

An important feature of movement of finished products of major projects is the type of vehicle used for movement. The vehicle dimensions, capacity. Type and its special characteristics, if any, have to be examined with the reference to the quality and quantity of goods to be moved. In case of sea transport the size, speed and the type of ship, in case of road movement capacity, moving dimensions and speed of the trucks and in case of rail movement the capacity, type and general availability of wagons must be closely examined.

Planned movement on any section must be taken into account utilisation of the existing sectional capacity, the expected general growth in traffic on the section, and the possible future identifiable streams of new traffic. If movement on a saturated section is inevitable, line capacity of the section must be increased.

3. Prime Movers

The motive power utilized for the internal handling of vehicles and transportation to destinations is another important component of the total movement system. In the case of rail movement, locomotives required for the shunting and marshalling of wagons within the plant must be of such weight, horsepower and performance characteristics as will match the specific tasks of shunting and reception and dispatch of wagons. In case of road movement, suitable design and layout of conveyors and mechanical loaders can reduce the drudgery of manual labour and make pre-dispatch and post-receipt handling operations more efficient.

4. Routes and Sectional Capacity

Another important aspect of transport planning is the routes for streams of traffic, viz., roadways, railways, waterways and airways. The routes or pathways must have adequate capacities. Generally speaking, because of lack of understanding of the transportation subject, executives take it for granted that capacity of routes is unlimited.

A very important but invisible component of movement activity is sectional capacity, which is dependent on permissible sectional speed and other characteristics of a section. In turn, sectional speed depends on the geometrics of the road (track, sea route, road surface, carriage way, gradients and curves, etc.).

Over a section of railways or roadways between two stations A and B, only a limited number of wagons, trucks or vehicles can be pushed through, depending on the availability of terminal facilities to handle these vehicles, the facilities to enable vehicles to move on the section, and availability of sufficient number of vehicles. Unless sufficient capacity is developed on each of the different routes to move the vehicles, the additional number of vehicles provided would not necessarily lead to higher levels of transport availability. On the contrary, movement may become more sluggish.

5. Transit Time

The relative locations of a plant and the customers or suppliers determine largely the transit time for raw materials, spare parts and finished products. Transit time generally never receives adequate attention in the panning of major projects. There is a general impression that, if need be, transit time can be drastically cut at any time by air-lifting a consignment. Apart from the fact that the neglect of transportation planning leads to an overall higher cost of transportation, in practice, reduction in transit time actually achieved may not justify the heavy cost of air transport. Rough estimates of transit time from unreliable sources are generally utilized for planning movements of goods. Although more detailed information sources may be readily available. It is essential therefore, that executives understand clearly the difference between:

• Normal transit time under normal conditions;
• Normal transit time under abnormal conditions;
• Optimal transit time;
• Most optimistic transit time
• Most pessimistic transit time; and
• Desirable transit time.

Because the importance of transit time is not adequately recognized, it is not realistically provided for. Major projects suffer from the heavy delays even before the commencement of construction because of the non-availability of construction equipment and machinery in time. The existing bottlenecks in the fields of transportation are almost always ignored. Construction schedules, inventories, warehousing facilities, order processing or production schedules, etc., are generally planned without the recognition of the inevitable delays that flow from these bottlenecks.

6. Weigh Bridge

Another usually neglected aspect of industrial transportation activity is the factory weigh bridge. Weigh bridges ion factories are generally inaccurate, if not actually out of order. It is seldom appreciated that the losses continuously occurring on this single piece of factory equipment and general inefficiency, which results from its ineffective and inefficient management, can be easily avoided by proper advance planning. Executives ignore the usual traffic jams at factory gates slow down receipts and dispatches, which, in turn, indirectly affect output. The relative advantages of various types of weigh bridges must be properly appreciated by executives, and a weigh bridge which will handle the anticipated volume of traffic expeditiously must be selected.

7. Distribution Pattern

The pattern of movement of the finished produced by road or rail must be planned properly. For example, when the requirements of the number of rail wagons are to be worked out, it is not sufficient to take the average lead or distance for the whole country for calculating fleet requirements. It is also not sufficient to use the figure of the existing average lead of general goods, or even that pertaining to a specific commodity.

However, when it comes to actually transport, because of imprecise pre-planning, the manufacturer wants the commodity carrier to transport goods to anywhere and everywhere in the country. This presents a problem. The manufacturer provides information to the common carrier about the quantity of goods to be marketed. But detailed information must be supplied to the carrier so that the carrier can plan the movement in entirety.

8. Nature of Product

Another aspect, which is often disregarded by project managements as well as common carrier, is the variability arising out of the specialized nature of products to be moved. The generally low level of sophistication in transport planning in the country had made it difficult for the planners to appreciate the fact that transport capacity is influenced by the nature of goods, their packing and other specialized requirements, such as special handling equipment, etc.

Build New Packages to Target Design Deficiencies

Whether you are building a package from the ground up or are expanding on an existing design, take your cues from the best practises within your industry as well as consumer feedback. Is there a way a design could be tweaked to use fewer materials or have lower weight? A bag-in-container might be a good approach for non-solid or semisolid products, but a rigid container could offer net gains for transport and storage space, for example.

Target Packaging Components during Manufacturing

Packaging has its own manufacturing process just like any product. Even if you don’t want to change your packaging design, you should consider looking at how the packaging is made in order to look for possible forms of optimization. Are there any bottlenecks or extraneous steps that can be eliminated? Reducing the steps involved both speeds up production and reduces waste after all. There are various types of technology such as cube molds for plastic packaging that could be looked into for enhancing economy of scale and offering transportation benefits.

Find Efficiencies in Packaging Procurement

Streamlining how your package components are sourced becomes more important the larger your business’s reach becomes. Generally speaking, you will find the most efficient approach to be getting a supplier who has a similar reach as you. This can prevent situations where, for example, you have five or six different suppliers just to keep up with your own operations. Having multiple suppliers can still be turned to your advantage in the form of applying targeted efficiencies to your markets.

Standardize Product Package Designs

One useful way to adjust packaging is to standardize package sizes and/or shapes across multiple products. This lets you streamline manufacturing, reduces changeover times, and offers higher line utilization. You are also at less risk for wastage since any excess packages can be redirected to other products with minimal fuss.

Aim for Sustainability in Your Supply Chain

Going green isn’t just about helping the planet it can also help your bottom line. Energy-efficient production, like using materials with lower manufacturing temperature requirements, or energy-efficient machines can produce very real and tangible savings. Recyclable materials and reusable packaging helps keep your packaging agile and adaptive. Taking sustainable steps can also be used for public relations and help your business earn goodwill from the environmentally-conscious.

Enhance Packaging in Your Supply Chains with Lean Supply Solutions

Lean Supply Solutions is a third-party logistics (3PL) fulfillment company whose operations are based around the Lean Methodology, a proven philosophy focused on eliminating any operations, equipment, or resources that are not capable of adding value to clients’ supply chains. By striving to ensure that the right products are provided to the right customers at the right time, Lean Supply Solutions is able to offer consistent, predictable, and quality results.

Some of the ways package optimization can help a company’s supply chain:

1. Optimize Your Materials

The materials you use for packaging could be holding your supply chain down. If you’re using products that are expensive, wasteful or difficult to use, you’re adding time and money to your supply chain that you can’t afford. While you don’t want to decrease the quality of your product or the perception of your brand, you can typically reduce or change your packaging materials without your customer noticing.

Optimizing your packaging means making smarter decisions about the packaging of the product itself and the shipping materials you use to get the product from Point A to Point B.  See if you can find alternatives, such as using hot-melt instead of tape, that can save you both time and money. Through package optimization, you should look at each and every material you use in the packaging process.

2. Package Optimization Allows for Sustainability

Creating plastic containers or cardboard boxes can have serious consequences on our environment. With so many companies looking for ways they can go green, package optimization can be one of the best ways to promote sustainable business practices.

Companies can look for ways to use less materials and reduce their carbon footprint. Whether you choose to use a thinner plastic or recycled cardboard, there are many different ways to make your package more sustainable. Not only can this help save your company money, but you’ll get bonus points with your customers for being environmentally friendly.

3. Make Transportation Easier

When you’re preparing cargo for shipment, you’re looking at things like size and weight of your boxes of product. Not only does this include the size and weight of the product itself, but also the packaging it is in. If you’re not using optimized packaging, you could be wasting space and weight that could be occupied by more product.

Optimizing your product package allows you to eliminate the unnecessary excess you could be wasting your money on. By reducing the amount or changing the shape and size of the packaging you’re using, you can transport more product saving you both time and money.

4. Finding the Right Package Optimization for You

When looking for the appropriate way to package your items, you need to consider both complexity and efficiency. To reduce complexity, you want to have as many similar packages as possible, but to improve efficiency, you want each item to have its best package. For companies with a wide variety of products, this can be difficult to balance.

Finding the optimal level of complexity and efficiency is crucial. When you find the right balance, you can lower your shipping costs, save space and weight with each shipment. You’ll save money in the long run, too.

Unnecessary costs hurt everyone. From your company to your customer, spending money on wasteful practices means everyone is getting a bad deal. Properly optimizing your packaging can mean you save money and time all throughout the supply chain process putting more money in your company’s pocket.

No matter what industry you’re in, package optimization is important for both your business and the environment. Consider this when determining what kind of packaging you should be using for your company’s products.