Manufacturers have a strong track record of aggressively driving cost reductions from their supply chains. These cost reduction efforts are traditionally driven by Purchasing organizations through negotiated lower pricing with the suppliers. Cost reductions have also been achieved through product design improvements, Lean Manufacturing efforts, and improvements in inventory turns.
Packaging has been largely overlooked by many organizations as an opportunity to deliver cost reductions to the bottom line. These are recurring costs associated with each product shipped to your end customer as well as parts/assemblies shipped inbound to your facilities.
Cascadia Packaging Group strives to help our customers understand this opportunity for cost reductions. Once we have peaked their interest, the next question is “Where do we start?”. Well…. Here is what we have learned:
- Document your annual packaging material spend
- Establish monthly metrics for waste and recycling
- Breakout packaging costs when quoting new business
- Dumpster dive (see our previous blog Dumpster Diving for Opportunities)
- Follow the supply chain
- Question current practices
Hoping that this new perspective is the start of delivering packaging cost to your bottom line.