Case study: Warwick Fabric reduces costs by 10% through a stock holding agreement

Warwick Fabrics is a well-known international supplier of high-quality, exclusive furnishing fabrics for both domestic and commercial interiors.

Trading since the 1960s, the business is known for its durable upholstery, classic and contemporary designs, and a wide range of plain and patterned options. Their ranges are sold through shops and independent interior designers across the UK and internationally, whilst they also work closely with many furniture manufacturers.

Whilst there were no specific or immediate challenges with their packaging, Warwick Fabrics felt that there was still significant scope for improvement.

The business frequently ordered low volumes of large 0203-style boxes for shipping its fabrics both nationally and internationally (as far as South Africa). These boxes would often make multiple trips through their supply chain.

The design of their boxes, however, meant that the company was using excessive tape to seal them. Besides this, purchasing in small volumes also left them wondering whether it was cost-effective (though, with no storage space for additional packaging stock, they were unsure they could resolve this regardless).

However, after speaking with GWP, Warwick Fabric realised that several key areas could benefit from a fresh approach.

Initially, GWP Packaging Sales Manager Jason Edgeworth and, later in the project, Design Manager Mike Poynter worked closely with the team at Warwick Fabrics to gain an understanding of their business and operations.

Identifying the excessive use of tape, Mike designed a variation on the 0426-style box that, crucially, featured locking tabs. Besides making the boxes easier and quicker to assemble, this dramatically reduced tape use. GWP’s designers also assessed material use to ensure that the new packaging would provide the required protection for the fabrics during local and international shipping.

Alongside the design change, though, GWP proposed that Warwick Fabrics take advantage of a “just in time” service. Also known as vendor-managed inventory, this agreement would see GWP manufacture higher volumes of Warwich Fabrics’ packaging inventory and store it in our warehouse. Warwick Fabrics could then order what they needed via an online portal, benefiting from smaller deliveries whilst still taking advantage of economies of scale.

Upon approval of pre-production samples, GWP then manufactured Warwick Fabrics packaging at our Cricklade production facility.

There were two key benefits that Warwick Fabrics saw from GWP’s approach.

Firstly, the switch from the 0203 box design to an 0426 style resulted in a significant reduction in the amount of plastic tape the business uses. Estimates put this at as many as 1000 rolls per year. Besides the associated cost savings of this – around £2000 annually – by no longer requiring excessive tape to seal the boxes, the business has also improved the sustainability of its operations.

Secondly, and arguably more significantly, by transitioning to a “stock and serve” supply agreement, Warwick Fabrics have reduced its overall packaging spend by approximately 10%.

These savings were the result of simple economies of scale. By manufacturing in higher volumes and storing the balance of stock for smaller call-offs, GWP now manufacture Warwick Fabrics’ transit packaging much more cost-effectively than the small runs provided by their previous supplier.

Jack Bryan, Warehouse Manager at Warwick Fabrics, commented:

Switching to the just-in-time agreement with GWP has been a step change in our packaging. Instead of having to request smaller runs of packaging to meet our ever-changing demands, we can now call off exactly what we need froma  larger stock holding. This is not only easier – the online portal works really well – but is also considerably more cost-effective for us. Coupled with the new design being significantly easier to assemble, the difference that GWP made has been fantastic.

Often, the hidden costs of your packaging are the most important to address. By manufacturing frequent, shorter runs, Warwick Fabrics’ previous supplier could never realise the economies of scale that could help reduce the business’s costs. But GWP’s approach, along with a redesign that improved assembly times, helped Warwick Fabrics achieve these benefits.

If you’d like to discuss how a vendor-managed inventory could benefit your business, please get in touch with our team today.