With the rapid increase in e-commerce services across various industries, there has been a significant rise in demand for customised and effective packaging that addresses specific needs. While this has resulted in the growth of the packaging industry, nuanced customer demands lead to challenges for companies. Both the nature of the supply chain, as well as that of consumers has steadily shifted, with renewed emphasis on aspects such as design and sustainability.
While the packaging industry is central to the consumer market, it also comes attached with a significant cost component, especially in certain product categories. In this context, it is imperative to understand how to reduce packaging costs. The first way we can do this is by looking at some broad reasons contributing to higher packaging costs.
What Factors Increase Packaging Costs?
- The use of overpriced or ineffective packaging material.
- Consistently low levels of investment in top-of-the-line machinery and automation that act as a hindrance in the long-term.
- A failure to optimise the varied aspects of the packaging process. For example, making packaging payment decisions based on box dimensions rather than product dimensions which lead to unrequired overheads.
- A poorly-trained or underqualified workforce, resulting in delayed processing and turnaround times.
- Superfluous additions to packaging such as notes or flyers, which don’t significantly alter consumer experience but increase overall time and expenditure.
- Ineffective inventory management systems put in place which often hinder productivity and cash flow.
- Expensive delivery costs, while not directly correlated, have a causal effect on the price of packaging.
While cognizant of the pitfalls discussed above, DCGpac has developed mechanisms and ideas to reduce packaging costs in the long-term. These are elaborated upon below.
Four Fundamental Packaging Cost Savings Ideas
Packaging plays a dual role in ensuring security of the product while retaining attractiveness, and companies spend a significant amount on packaging materials. However, when aiming to maintain quality while increasing savings, there are a variety of alternative package designs which save money, provide secure protection and are more environmentally sustainable. The fundamental pillars upon which such a cost-saving plan can be developed are –
1. Investing in R&D
The packaging industry is constantly evolving, and it is essential to invest in research around the latest innovations and alternatives that are being developed. An added monetary and time input in the present can save years worth of money by ensuring an increase in quality and utilisation of effective cost-cutting technologies. This also ensures appropriate allocation of labour and materials in the long-term
2. Prioritising inventory management and organisation
Companies across the industry invest in a wide array of materials, and it is essential to analyse their respective utility while building an inventory of the same. For example, in the juice packaging industry, tetra packs have steadily replaced plastics and glass due to their lighter weight and durable nature, allowing for savings in transport costs.
Building an inventory populated with such materials high in quality, sustainability and utility will help improve standards and increase business in the long-run. Furthermore, centralising the organisation of these materials and grouping them based on type and frequency of usage will help streamline processes.
3. Improving Packaging Processes
Aside from the fundamental aspects relating to the cost and quality of raw materials, improving the overall packaging process lends towards quality standardisation and improved time management. To ensure this happens, it is important for packaging companies to adopt a long-term vision and invest in training their workforce, as well as consistently repairing and upgrading their machinery.
Furthermore, adopting automated packaging solutions designed to speed up the packaging process helps increase the performance efficiency across tasks while reducing costs. This also allows labour to be reallocated to other relevant aspects of functioning.
4. Customised Packaging Solutions
Package size and material should be customisable according to the specific needs of a product and the consumer, and companies should not adopt a one-size-fits-all approach. This helps avoid utilising extra material and also works towards robustness of packaging to withstand mishaps during transport. Furthermore, adopting techniques such as digital printing and eliminating labels and flyers will help cut costs over time.
There are a variety of other cost-saving packaging ideas centred around transport costs, process optimisation, investment and ensuring processes continue to evolve along with global standards. Considering the constant growth in demand for packaging, the industry needs to develop and implement cost-effective and high-quality solutions. This is particularly relevant considering the steady transition of global commerce towards the virtual space, and companies must optimise their packaging expenditure to retain their cutting-edge in the digital age.