Whether you operate a small, medium, or large-sized business it can seem like a constant struggle to find ways to reduce costs and increase productivity and efficiency. These are the ingredients that help to make a business successful, and often it requires constant tracking, evaluating, and analyzing to ensure that you’re making the appropriate adjustments at the right time.
Your packaging supply chain is one of those areas that can eat up a fair amount of money and time, thereby affecting the flow of the business. If your operational efficiency isn't up to par, then your business could really be suffering thanks to the current packaging supply chain methods being used. So, how exactly can you go about saving money and time when it comes to the packaging supply chain, and what are the steps a business can take? There are actually adjustments both small and big that may be necessary, as we take a closer look.
Understand What the Company's Current Cost to Serve Is
Before you jump right in and start making changes, it's important you understand what the company's current cost to serve is. The cost to serve is basically how much it costs the company to provide a service or product to the client. Evaluating the costs of your packaging supply chain is something that can be pretty involved, which is why you may want to consider bringing in a professional to do this. You want to ensure that you're gathering the right information and coming up with the correct numbers.
It’s also important you keep tracking that cost to serve even after you make adjustments, to ensure you are getting the results you’re after. It will also help you to identify when problems start to happen in the future, so you can react more quickly and efficiently.
Take a Look at Your Current Supplier
Businesses are quick to look at their own operations for areas that can save money, but in reality, it should begin with the suppliers. Take a look at the supplier you are currently using for your packaging and consider there may be cheaper options. That may mean changing up your supplier, changing up the size of the packaging, the material being used, etc. It certainly doesn’t hurt to take a look at other suppliers and see what they have to offer.
As you are looking into different suppliers, this can also be a good time to discuss if the current way you package your product is really the best option. Sometimes it's more than just a cost-savings that you can achieve by changing up the packaging. It can also cut down the amount of labor required to package the item in the first place.
Can You Save on Brokerage Fees?
Brokerage fees are another area that can add up fast. The more entries you are dealing with, the higher the fees. This is exactly why brokerage fees should be examined closely. Is there a way you could cut down costs in this area? Even if that means limiting the number of entries, putting more items together at once, etc., you can start to realize savings.
Change Up Your Inbound and Outbound Transport
Shipping costs can be adjusted quite a bit simply by switching trucking/transport companies. Shop around, look at various companies that could safely and efficiently move your product around, and evaluate their service. You want to examine things such as the size of the trucks, how quickly they can move product around, their safety record, etc.
Is Your Distribution Center as Efficient as It Can Be?
Distribution centers are where the finished product sits waiting to be sent out to the various customers/clients. In order for a distribution center to be doing its job, it needs to offer just the right amount of space – not too little or too much – allow for optimal organization so the products can be found quickly and accurately and be located in a central area that makes sense in terms of deliveries.
Perhaps you have a very large distribution center that is never at full capacity. Why pay the overhead costs involved when you don’t need that space? On the other side of things, maybe the center is packed so full that it’s making it hard for staff to find the product they need when it is needed. This ends up costing extra time and can lead to errors, which again costs the company money.
Start to Rack Up the Savings
Each of these steps and considerations will help you to take a closer look at the current state of your company’s packaging supply chain. By doing so, you will start to identify areas that can benefit from adjustments and changes to the methods you are using.