5 ways to reduce storage for packaging.

Warehouse space is surprisingly expensive. In fact most storage results in costs to your business, including management, lighting (and possibly heating), ongoing maintenance and so on. And at best, it is space that could be used for developing other areas of your business.

This poses the question of how you can reduce your required warehouse space (or at least use it more efficiently).

And for many businesses, this then leads on to how to reduce storage for packaging.

This is because, depending on the nature and type of your business, how big your inventory of boxes is, and even down as far as the type of material you are using, your packaging can be one of the most space intensive storage requirements.

But there are a number of tactics that can help you to – in some cases vastly – reduce your packaging storage requirements.

This guide takes a look at 5 of the most effective yet little know strategies, for doing so.

But why you should you care about how much storage your packaging takes up? Well, there are potentially a number of negative impacts on your business.

As mentioned above, storage space is not usually cheap. Ongoing maintenance, utility bills, business rates and of course rent or leasing costs can all add up to a significant 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, a large packaging inventory held in stock makes it much more difficult to retrieve the correct packaging as an when required, harming your efficiency. This could be as innocuous as taking longer to get the required items to your packing stations, or as serious as errors that could result in items being damaged in transit.

Talking of 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 potentially get dirty, dusty or damp (depending on the nature of your warehouse and how frequently all of your packaging lines are used).

Other issues include increased effort involved with stock checking, forecasting, and even the potential for running out of specific types of packaging as monitoring them all becomes more difficult

And finally, there is the “opportunity cost” to your business.

What else could the space be used for? You could potentially expand your manufacturing space to improve output, you could hold greater stock of finished goods to meet peaks in demand better, or just improve the overall safety and efficiency of your premises.

At the point where one or more of these problems starts to seriously affect productivity or business growth, there is the opportunity to implement one of a number of methods of reducing storage requirements.

And whilst a number of the tactics highlighted below can apply to various aspects of the items you hold in stock, they are particularly applicable to your packaging.

So, the 5 ways to reduce storage for your packaging are as follows:

Rationalise your packaging inventory
Reduce the amount of void fill used
Investigate possible material changes
Take advantage of a Just in Time (JIT) supply service
Use advanced forecasting methods

The remainder of this guide gives a brief overview of each of these tactics, and how they can be applied to your business.

The first way to reduce storage for packaging is to rationalise your inventory.

But what does this mean?

Well, a design focused packaging manufacturer will be able to analyse the entire range of boxes you use, and reduce the total number.

This is usually achieved through combining boxes with low usage into a single or reduced number of boxes, all of which can accommodate multiple different products (potentially using inserts / cradles etc. to ensure performance isn’t affected).

This take into account the 80 / 20 rule, in that for many businesses 20 percent of their packaging inventory accounts for 80 percent of the packaging they ship. But all of the 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 also using less storage space. By eliminating the slower moving packaging, it frees up this storage space.

There are other benefits too however, including economies of scale when purchasing (getting your business a better price), having less cash tied up in slow moving stock, and making management and stock checking much easier.

When considering reducing the storage space required for packaging, it is important to look beyond the range of boxes and cartons you use.

Often, the 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 questions should be whether your use of void fill is optimised (i.e. you are using as little as possible), or are you using it to compensate for outer cartons that are not suitably tailored to your products?

Using custom sized packaging that is designed specifically to the correct size and specification to protect your items during shipping will help to achieve this, without sacrificing its primary function – protecting your items.

Even substituting items such foam pellets for foam end caps or corrugated cardboard inserts (both of which can be designed to fold flat) will allow for significant space savings.

It also has the added benefit of improving the end users experience – who is the person responsible for adequately recycling or disposing of all the excess packaging you are sending to them. Plus, custom sized packaging can reduce transit costs through more efficient use of space.

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 be using 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 actually 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.

Delivery costs will be reduced as the transit will be more efficient (i.e. more boxes delivered 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 to include here is that the testing of 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.

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 differing points to meet demand as required.

In simple terms this could be building up stocks to meet certain events – such as Black Friday or the Christmas period – whilst running lower stocks during quieter periods.

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 have a huge impact on your warehouse.

Effectively, this service will see 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 will then use flexible manufacturing schedules to ensure that the agreed of amount of stock is maintained.

The benefits of this?

Well, for starters this can vastly reduce your warehouse requirements. In fact, one GWP customer managed to free up more than 12,000 square feet of warehouse space using this method.

You can also benefit from much shorter lead times as packaging is actually held in stock, meaning you can be much more agile and responsive to your own business’ fluctuations in demand.

What’s more, a Service Level Agreement can help you achieve economies of scale (reducing costs) whilst still 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.

Whilst all of these tactics may not be applicable to your business and / or packaging supply, even implementing one or two can often have a significant impact in reducing your packaging storage requirements.

This 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 you to reduce packaging storage requirements at your business, then please do not hesitate to get in touch.