Packaging Re-design
Client: Packaging Re-design
Topic: Reduce packaging complexity and costs
Situation:
Our client:
- Ships a large variety of equipment (5000+ different SKUs) globally. Since this equipment comes in a large selection of sizes and weights, an equally large number of corrugated products and foam inserts were required. In addition, the packaging material procurement was being done through 5 different vendors.
- The low usage of certain types of packaging, the scattered procurement, and the volume of variety drove up the cost of materials, added storage costs, and increased materials management great deal.
Challenges:
The challenges facing us were:
- Reducing the large variety of packaging materials and at the same time ensuring product integrity.
- Driving down a quarterly expense of $350,000, without negatively impacting the cost of shipping through an increase in dimensional weights.
- Obtaining sturdy, dependable packing materials for equipment that was shipped in the same packaging multiple times.
Actions:
The actions Genesis took to address these challenges were:
- Conducting an in-depth analysis of equipment variables and packaging requirements.
- Engaging a number of different packaging vendors and ensuring proper testing was done for product integrity.
Results:
Our actions resulted in:
- A reduction in the number of corrugated sizes to a manageable 15 different varieties.
- The consolidation of packaging requirements into one vendor, eliminating administrative requirements.
- Reduced quarterly expenses to $85,000 (a 75% cost savings).
- Zero claims of damaged equipment during the 2011 transport cycle due to insufficient packaging.
- Keeping dimension-to-weight ratio within an acceptable range that had a positive impact on transport costs.