3 tips to reduce your costs and carbon footprint with packaging strategy

Anyone who works in supply chain management will know how important it is to save money and make packaging more sustainable. However, it can be tricky to decide where to begin and how to make a real difference. Here are three tips that’ll help you get it done.

1. Reduce materials through technical levers. Choosing the right packaging materials is important when you want to save money and reduce your environmental impact. Start by asking a few simple questions to determine if an opportunity exists:
   • Are we using the ideal packaging? Material options abound. Packaging your product correctly can also help you meet performance and sustainability goals.
   • Are we using too much packaging? Organizations often find their package design consists of excess materials. Conducting a packaging “tear down” and evaluation can help you thin out unnecessary packaging. This analysis can lower packaging costs and reduce waste while enhancing the functionality of the primary materials.
   • Are there opportunities to review lighter-weight or other alternative materials, structures or redesigns? As commodity markets change and new suppliers join your organization, think about going back to the basics to find ways to reduce materials by weight, carbon emissions or both. Developments in material and equipment technology can bring a fresh perspective to old ideas.

   While using less packaging material is an obvious sustainability solution, other benefits can bring value to your entire organization. For example, lower transportation costs and less frustration for your end customers, which should increase customer satisfaction levels. Finding the ideal packaging performance balance between packaging costs and damage costs is crucial and fluctuates from organization to organization.

2. Packaging optimization across primary, secondary and tertiary packaging. Once you dial in material use, you can optimize your primary, secondary and tertiary operations. This provides an opportunity to generate additional cost savings and carbon footprint reductions.
   • Primary: Optimize your primary pack design with the endgame in mind. If your product ends up on a shelf, design for that shelf space. Designing your package for its intended shelf space will maximize your shelf presence while making your marketing team happy. Keep your product-to-package ratio in mind as well as opportunities to increase the shipping density of your product.
   • Secondary: Increasing your master carton density can boost efficiency and cost savings. More product per carton equates to more product per pallet and per truck, lowering transportation costs and its toll on the environment. Make sure you design your primary packaging to nest and fill out the master carton to optimize your transportation packaging. For example, flexible packaging options can be great. But if your master shipper has a small number of products, you're losing money and sustainability by not using valuable space.
   • Tertiary and cube efficiency: Pallet and truck usage remains crucial for reducing the costs and greenhouse gas emissions of both full-truckload and less-than-truckload (LTL) shipments. You can minimize LTL shipment costs with pallet load configurations that use unit space (even without a pallet) without slowing handling processes. Doing so will also keep your footprint small. Improving cube space in a trailer makes all the difference when you’re pinching pennies. Remember, two key factors affect truck limitations: weight and space. If you’re not maxing out the weight of your trailer, you better be packing it to the brim.
3. Address product damages in the supply chain. For manufacturers and retailers alike, nothing is worse for profitability than having your product arrive at its destination damaged. It’s throwing money and emission-mitigating efforts away. Damage happens, but you can and need to control it. For starters, package your product for the specific supply chain in which your product needs to travel. To plan accordingly, you need to fully understand where the hazards are. Identify and map out touch points, hazards introduced by handling procedures and transportation methods (where vibration may result in damage). Adjust your supply chain operations to minimize the potential for damage. Use conveying systems whenever possible to minimize manual handling, drops and tip-overs. Planning for these hazards will help you develop packaging systems that’ll withstand these damage-generating areas. Taking a close look at your packaging systems, packing operations and supply chain risks can help you save a nice chunk of money and be more sustainable while you’re at it.

Contact us and learn how NTT DATA Supply Chain Consulting’s Packaging Optimization practice will improve your cost-effectiveness and help achieve your environmental protection goals. Our top supply chain talent, enabled by proven, leading-edge digital assets — tools, methods and content — deliver actionable insights and measurable outcomes to some of today’s largest and most complex supply chains