Case study: Honda reduces costs by 10% with inventory rationalisation

Honda, a significant manufacturing presence in Swindon for many years, approached GWP Packaging to help them streamline their door panel packaging. The overly complicated inventory was leading to increased administration, excessive forklift activity, and limiting cost-saving opportunities.

The resulting design and consultation process enabled GWP to significantly reduce the number of different corrugated boxes Honda uses, resulting in substantial benefits and cost savings for them.

As part of its programme of continual improvement, known internally as “New Honda Circles”, Honda challenged employees in different areas of the business with identifying opportunities for positive change.

One such committee identified that packaging for front and rear door panels for three models used similar corrugated (cardboard) boxes – each with different inserts – for protection.

This setup led to several challenges. Firstly, Honda was missing out on economies of scale by ordering lower volumes of each pack. The company had the burden of increased admin, ordering and stock checking. There was also an increase in forklift activity at their manufacturing plant, where they retrieved different packaging before delivering it to the assembly lines.

Honda approached GWP Packaging to help solve these challenges.

Our design team, led by Mike Poynter, worked closely with the team at Honda to first analyse the existing packaging inventory, assessing dimensions, volumes, materials and construction used.

A detailed rationalisation process allowed Mike and his team to identify similarities and differences, before designing two boxes that could replace the existing six. Universal inserts ensured that the new corrugated packaging provided the same or improved protection compared with previous packs. This process involved close dialogue and collaboration between Mike and the pre-pack and warehouse teams at Honda throughout.

Following the creation of the new packs, GWP supplied pre-production samples for drop testing and transit trials. These identified a requirement for hand holes to aid handling, which our design team added to the final design.

Upon successful completion of the trials, GWP manufactured the new cardboard transit packaging at our production facility in Cricklade, Wiltshire.

The new designs provided several quantifiable benefits to Honda.

Firstly, Honda’s packaging inventory for door panels was reduced by two-thirds, going from six boxes to two. This reduced inventory made it considerably easier to manage, with fewer administrative, ordering, and storage requirements.

Secondly, the new packs reduced forklift activity by over 60%, achieved by eliminating the need for additional journeys to retrieve the different packaging lines.

Thirdly, the project allowed Honda to benefit from economies of scale. The price per 1,000 units was reduced by over £500, representing a 10% decrease.

Finally, the transit tests of the new boxes also resulted in a marginal improvement in protection for the door panels during shipping.

Jeremy Alsop, part of the engineering team at Honda, commented on the project:

When we approached GWP to help us with a project to improve and rationalise our door panel packaging, I was very pleased with the response. It was really helpful that we could visit the designers on-site to discuss the designs, make any changes, and receive samples the same day, which we could then test. The new packs have worked well in tests and provide benefits not only to us but also to our end customers. All in all, a win–win situation!

GWP Packaging Sales Director David Mason also gave a presentation on the project to senior staff from across Europe at Honda’s facility in Swindon.

GWP’s design-led approach to Honda’s challenge achieved both the original goal of streamlining the door panel packaging and provided additional benefits, such as cost savings and reduced administration.

If you would like our team of packaging experts to assist with any challenges you’re facing with your corrugated or transit packaging, please don’t hesitate to get in touch.