Shipping costs and packaging are closely connected for manufacturers. The size of the box, the paper strength, the type of filler used and how much filler is needed — all of these elements have the opportunity to add significant shipping costs.
As one of the country’s top suppliers of corrugated packaging, we regularly walk production floors and evaluate the shipping and packaging needs of thousands of manufacturing companies. We’ve seen it all and heard it all, and we’ve distilled that expertise into our proprietary VIP audit process, which we use to identify opportunities to lower costs for our customers — an average savings of $450,000 per audit.
After 20 years of full-time auditing, VIP audit leader John Gross and his team have identified the five main areas where improving packaging efficiency and effectiveness can uncover significant value.
Package size and design have an impact on warehousing costs. Right-sized boxes, with more effective storage, can help clear much-needed space in your stockroom.
When using boxes that are too large, you risk paying unnecessary shipping fees. When merchandise doesn’t fill the box space, more filler is required to protect the integrity of the product and ensure safe delivery. Shippers charge based on dimension and weight, so you might be paying a significant amount in extra charges.
In certain cases, it makes sense to consider an investment in machinery to enhance a manual packing process. The price tag on these investments can give operations managers pause and can be difficult to squeeze into short-term budgets. But after running the numbers, you may find that the investment makes sense and pays for itself in short order.
It’s an area to investigate to see if making changes serves the strategic direction of your business as a whole. Box shape and design are factors that have a significant impact on your overall packaging costs.
When products change or new products are introduced, it’s time to reevaluate your packaging needs. As your business evolves, so should your packaging strategy. What worked well for you three years ago may not be the most cost-efficient practice today.
The three-day VIP audits that PCA performs for our customers examine these and other issues. We regularly see that one of the largest costs is associated with shipping and how items are packed.
The final product of an audit — a full report of findings, specific recommendations and next steps — can reveal any of the above issues and more. The report is presented and discussed in-person with the customer’s operations team before we leave the facility.