Save businesses millions of rupees: optimize packaging cost

Packaging Cost Reduction: Save Crores of rupees.

Every company’s management board, procurement head, Finance head or other responsible department’s heads always look to save crores from packaging used in their company. But, due to lack of proper field expert knowledge they continue to incur extra cost and suppliers continue to enjoy bonus profit. Supplier know where cost can be saved but they will never let company know this fact. Also due to lack of proper expertise by packaging department this cost continue to leak and over many years company loses crores of rupees, which would be avoid and added to balance sheet of company. From my last 15 years of working with national and international customers, I felt to share with everyone how packaging cost can help in generating crores of rupees without compromising product safety. We work with manufacturer’s day in day out to ensure packaging cost reduction and savings through a few quick and easy steps we have assisted companies with average savings such as 40% reduce waste and 12% less packaging cost.

So, what can be done to reduce your packaging costs? Here’s the thirteen simple steps on how to reduce the cost of packaging:

1.            How to reduce packaging costs? Train your responsible employee

This is especially true for those who have a manual packaging process. When the last time was your employees received training on how to properly wrap a box or how to wrap a pallet most effectively? Reducing the amount of packaging remains the fastest way to lower your packaging costs. Untrained personnel could apply too much tape or pallet wrap to each package without even realizing it. A little training with your packaging supplier could help reduce the amount of packaging you use overnight.

2.            Maintain your packaging machinery

Do you have a regular maintenance schedule for your end-of-line packaging machines and when was the last time you checked that your pallet wrapper was stretching at the correct stretch ratio? End-of-line packaging machines can sometimes be neglected, which can cost you dearly.

3.            Audit your current designs and find out how to optimize the cost of packaging

When was the last time you checked why you use the packaging design and components used? Do you need all the components you currently use? Is there a better way to package this product? If you question your current packaging design, this can lead to great potential savings. The packaging market is very dynamic and therefore new materials and systems are regularly launched. By sticking with the status quo, you risk missing out on savings that could be made by switching to a more cost-effective packaging design.

4.            Eliminate unnecessary packaging components to reduce packaging cost

What items can you eliminate from your packaging process? Additional packaging is often added to items to compensate for an underlying problem. This is not a lean or cost-effective solution. By analyzing the process, unnecessary packaging elements in your packaging can be identified.

7.            High efficiency packaging materials for overall packaging cost reduction

When we visit food manufacturers, 9 times out of 10 we find that they buy the cheapest pallet film per kg to keep costs down. While the cheaper products may seem more enticing on paper, in production you could end up using twice as much film to get the desired result, and there is also great operator frustration and production downtime due to breaks. This is when cost wins out over price every time. Trials at a number of large food processing plants have shown that scientifically selecting the film with the highest yield suitable for the application at hand will result in a higher cost per roll, but also result in huge savings in running costs. This is because high yield pallet wrap films contain additives that increase their strength and puncture resistance. Therefore, when using a high yield packaging film, you can apply far less film weight and maintain the same product protection and stability.

9.            Industry benchmarks and specifications

Once you have found the optimal usage and packaging solution, take some time to create written specifications for it. As a result, the savings achieved are maintained and your product image is always maintained. Using benchmarks for items like pallet film weight per pallet, you can quickly check if your savings plan is on the right track.

11.          Regular review

Packaging materials are optimizing constantly.  Make sure you set up review dates to relook at your packaging and process.  This way you will be able to guarantee your costs are never extremely high for your packaging materials

12.          Sell waste

Many companies are not aware that there is good money to be made from packaging waste. If your factory generates a lot of cardboard or plastic waste, you should bale and recycle the waste. It is an investment that pays for itself very quickly and is better for the environment than sending the waste to landfill.

13.          Focus on cost per piece

Essentially it all comes back to one golden rule: look at the cost-in-use over price-per-unit. If you always have this in mind, you are guaranteed to make far greater savings for your company.

 Real life example of packaging cost saving project: