One of the main problems for every organization that distributes goods is lowering packaging costs. Packaging and distribution of goods account for a significant portion of small and large business spending. Packaging consists of several components, ranging from materials to technologies.
Since the customers end up bearing the expense of packaging, high packaging costs would result in higher prices. Luckily, business owners may cut packaging expenses while keeping their products' quality and brand image.
Here are a few ways that businesses can save money during the packaging process.
The cost of raw materials isn't the sole factor that influences packaging prices. Numerous variables can lead to higher packaging costs.
A few common issues that hike up packaging costs are
For example, if you don’t store packaging material properly, the potential for damage increases.
A poorly constructed warehouse layout may also contribute to this issue. You'll save money by reducing the amount of warehouse space you use and the related costs, like electricity and heat.
Are your packing materials well-organized? Is there a way to make your layout more streamlined and your product packaging go faster?
If you want to boost your current operations, take a good look at your existing product inventory. First, identify items that are used together and group them. Then, separate the packaging items that you don’t use frequently.
Sorting the materials will help simplify and speed up the packaging lines, making them more efficient and boosting productivity. The time it takes for the packaging process is critical to managing costs. That’s because it delays delivery to consumers.
Once you’ve streamlined the packaging line, think about the raw materials you’re using.
Inefficient packaging materials may cost less initially, but product damage will eventually incur much higher costs. Investing in high-quality raw materials from the get-go will help minimize this problem.
Your business will benefit from an automated packaging line in many ways. First, the output will increase because automation improves the efficiency of your packaging operation, allowing you to make more money.
Manual sealing generates a significant amount of waste. A fully automated computer can only use the exact amount of material needed, reducing the carbon footprint.
Assigning repetitive tasks puts the workforce in harm’s way because of the nature of their jobs. Automation lowers the risk of repetitive strain injuries, lowering long absences and compensation claims.
Machinery adds precision, resulting in goods that have perfect packing and production. As a result, you can present the best product to your customers while lowering the risk of injury.
For example, automation can take over mundane tasks like taping and sealing products. That’s critical because a product that has improper sealing is more likely to be damaged or spoiled.
Long sealing times are often due to out-of-date, malfunctioning sealing equipment or a manual packaging line.
Does your equipment shut down all the time, causing your team to lose time? Do your sealing machines glitch, resulting in tape jams that bog down your entire workflow?
That type of environment slows down the staff, creates unnecessary work, and forces your employees to conduct more manual inspections.
Similarly, working with manual labor instead of automation is likely to be time-consuming, inconsistent, and potentially harmful to the workforce.
In such cases, automating the production line is your best chance at saving time, money and protecting your employees.
Taking the time to refine packaging for a product launch saves money over the long term, and optimizing packaging for older items will save you money too.
As new technology and innovations become accessible, opt for changing older designs to save money on materials. For example, a case study by McKinsey and Company on a consumer goods company states that it’s possible to cut packaging costs on a critical product by 10% just by modifying the design to reduce the amount of plastic.
For example, if you’re launching a bottled product, eliminate materials by dropping labels and printing straight on the bottle, as well as changing the shape of the bottle to increase packing density.
Another cost-saving benefit of upgrading packaging is the money you can save on shipping.
Leading up to 2015, companies like UPS and FedEx used weight to calculate shipping costs. Unfortunately, that put them at a loss because businesses used more giant boxes for small products, occupying more space.
UPS and FedEx are now employing dimensional weight pricing. They calculate both the weight and the volume to price your product, and the higher number becomes your cost.
So when you ship small items in big boxes, you're increasing the selling cost.
Keep a close eye on the packaging industry for shifting trends, especially when it comes to changes in your industry. The packaging industry spends money on R&D to create goods that are more robust, lightweight, safe, and environmentally friendly.
All of this adds up to a cost reduction.
More sturdy packages reduce the likelihood of transit losses. Compact packaging reduces the amount of space you take up in carrier trucks. Durable packaging minimizes the danger of spoiling and injury. Environmentally friendly goods also benefit the brand's credibility.
Rather than investing in a large amount of new packaging material, purchase a small quantity to see how it performs under varying conditions.
For example, you might discover materials that are more resistant to transportation harm, lowering the amount of money you lose on returns and replacements.
On the other hand, you don't have many materials to burn through if the materials don't work as intended. An abundance of defective packaging materials in your storage is less than ideal.
Automation, innovation, and constant upgrades are the key to make sure you’re allocating your labor correctly. These tips and tricks will also help you cut labor costs where possible.
If you’re ready to upgrade your packaging line, contact us today for a comprehensive automated solution!
