Minimise space and costs
Reduce the expensive warehousing and storage costs associated with your packaging
Warehouse space is surprisingly expensive. In fact, most storage results in increased business costs, including management, lighting (and possibly heating), ongoing maintenance, and more. It is also space you could use to develop other areas of your business.
These costs (and opportunities) pose the question of how you can reduce your required warehouse space (or at least use it more efficiently).
And for many businesses, this leads to how to reduce storage for packaging.
Depending on the nature of your business, how extensive your inventory of boxes is, and even the type of material used, your packaging can be one of the most space-intensive storage requirements.
But several tactics can help you to – in some cases vastly – reduce your packaging storage requirements.
This guide looks at five of the most effective yet little know strategies for doing so.
Problems of excessive packaging storage requirements
But why should you care about how much storage your packaging takes up? Well, there are potentially several negative impacts on your business.
Storage space is not usually cheap. Ongoing maintenance, utility bills, business rates and rent or leasing costs can add up to a high monetary cost to your business.
And this is before taking into account the staff costs involved with managing this storage.
However, there are a number of other ways in which storing excessive amounts of packaging can impact your business.
For example, holding stock of a large packaging inventory makes it much more difficult to retrieve the correct packaging as and when required, harming your efficiency. This issue could be as innocuous as taking longer to get the necessary items to your packing bays or as severe as errors resulting in item damage during transit.
Regarding damage, items kept in a warehouse for a prolonged period are more likely to suffer accidental damage. But even if they are stored safely, your corrugated packaging could still get dirty, dusty or damp (depending on the nature of your warehouse and how frequently you use all of your packaging lines).
Other issues include increased effort involved with stock checking, forecasting, and even the potential to run out of specific packaging types as monitoring them all becomes more difficult.
And finally, there is the “opportunity cost” to your business.
What else could you use the space for? You could potentially expand your manufacturing space to enhance output, hold larger volumes of finished goods to better meet peaks in demand, or even improve your premises’ overall safety and efficiency.
Five ways to reduce storage for packaging
When one or more of these problems starts to seriously affect productivity or business growth, there is the opportunity to implement one of several methods of reducing storage requirements.
And whilst a number of the tactics highlighted in this article can apply to various aspects of the items you hold in stock, they are particularly applicable to your packaging.
So, the five ways to reduce storage for your packaging are as follows:
- Rationalise your packaging inventory.
- Reduce the amount of void fill you use.
- Investigate possible material changes.
- Take advantage of a just-in-time (JIT) supply service.
- Use advanced forecasting methods.
The remainder of this guide briefly overviews these tactics and how you can apply them to your business.
Rationalise your packaging inventory
The first way to reduce storage for packaging is to rationalise your inventory.
But what does this mean?
Well, a design-focused packaging manufacturer can analyse the entire range of boxes you use and reduce the total number.
An experienced designer can combine packaging with low usage into a single or reduced number of boxes, all of which can accommodate multiple different products (potentially using inserts or other fittings to ensure performance isn’t affected).
Rationalisation takes into account the 80 / 20 rule, in that for many businesses, 20 per cent of their packaging inventory accounts for 80 per cent of the packaging they ship. However, slow-moving lines need to be stored as well, even if they are only replenished once or twice per year.
With a faster-moving yet smaller packaging inventory, it is possible to replenish more frequently whilst using less storage space. By eliminating the slower-moving packaging, it frees up this storage space.
Other benefits include economies of scale when purchasing (getting your business a better price), having less cash tied up in slow-moving stock, and making management and inventory checking much more straightforward.
Void fill packaging
Reduce the amount of packaging void fill you use
When considering reducing the storage space required for packaging, it is crucial to look beyond the range of boxes and cartons you use.
Surprisingly, void fill such as foams, pellets or bubble wrap can take up a disproportionate amount of space in your warehouse.
But this is essential, you may argue. Without this, products are much more likely to be damaged in transit.
And whilst this is true, the question should be whether your use of void fill is optimised (i.e. you are using as little as possible) or whether you are using it to compensate for not suitably tailoring your outer cartons to your products.
Using custom-sized packaging explicitly designed to the correct size and specification to protect your items during shipping helps achieve this without sacrificing its primary function – protecting your items from damage.
It also has the added benefit of improving the end users’ experience – who is responsible for adequately recycling or disposing of all the excess packaging you send to them. Plus, custom-sized packaging can reduce transit costs through more efficient use of space.
Investigate possible material changes
It may seem like an insignificant saving, but the type – and ultimately thickness – of the material your packaging uses can impact the storage space you require.
As an extreme example, you may use double wall boxes as you believe you need this additional strength to protect your items in transit. However, theoretical and physical testing can reveal if this material is required. In many cases, it is not.
Whilst the material saving is not frequently this extreme, even swapping standard board grades can save a significant amount of space when stacked in your warehouse.
But that’s not all.
You typically see a reduction in delivery costs as the transit is more efficient (i.e. you take delivery of more boxes in a single load). Thinner or lighter-weight materials usually cost less themselves. And they boost your environmental credentials through more efficient use of resources.
An important caveat is that testing the new material is essential. It is no use making the savings if the performance of your packaging suffers and you end up with increased levels of damage, returns and disgruntled customers.
If in doubt, speak with an experienced packaging designer.
Use improved forecasting
Whilst this can be tricky to implement if you do not have the facts and figures readily available, improving your forecasting of usage can help to reduce storage requirements.
In fact, struggling to forecast accurately can be one of the signs that you should consider a fully vendor-managed inventory.
The aim is to ensure that you have varying amounts of packaging in stock at different points to meet demand as required.
Take advantage of a just-in-time service
Saving the most effective method of reducing packaging storage requirements until last, using a Just in Time (JIT) or fully managed packaging inventory service can hugely impact your warehouse.
Effectively, this service has your packaging supplier hold an agreed level of stock at their warehousing or storage facility, which you can then call off in much smaller volumes to use as and when you actually need it (hence just in time).
Your packaging partner then uses flexible manufacturing schedules to maintain the agreed amount of stock.
But what are the benefits of this?
Well, for starters, this can vastly reduce your warehouse requirements. Using this method, one GWP customer freed up more than 12,000 square feet of warehouse space.
You can also benefit from much shorter lead times as packaging is held in stock, meaning you can be much more agile and responsive to your business’ demand fluctuations.
Moreover, a service level agreement (SLA) can help you achieve economies of scale (reducing costs) whilst receiving smaller, more frequent orders on a just-in-time basis.
And finally, as your packaging supplier has detailed access to your ongoing usage patterns, it allows them to forecast for you in the future and advise on further efficiency gains.
Achieving a reduction in packaging storage requirements
Whilst not all of these tactics may apply to your business or packaging supply, implementing one or two can significantly reduce your packaging storage requirements.
These strategies can, in turn, lead to considerable cost savings, efficiency improvements and flexibility within your business.
If you would like further advice and information on how GWP can help reduce packaging storage requirements at your business, please do not hesitate to get in touch.