Reducing business expenses is something that owners must be constantly working towards and evaluating. In our previous posts, we’ve looked at a few ways this could be accomplished, including picking the right forklift for your needs, whether to rent or buy forklifts, and how to choose a door that’s best for your warehouse. Today we’re going to take a look at how costs can be reduced by reevaluating how your business handles packaging.
The Department of Defense and the Defense Logistics Agency (DLA) recently expressed a desire to lower their packaging budget. DLA Distribution created a team consisting of packaging and packaging policy experts, base supply, contracting and finance to look at how costs could be reduced and packing supplies could be standardized across the board. The team examined the processes associated with inventory management and how this could be standardized as well.
The team had overwhelming success in reducing their expenses. While the DLA set a goal of reducing their budget by $3.9 million, the team enjoyed enjoyed great success and was able to reduce this much further, totaling $34 million in savings. $3 million of these savings stemmed from pallets, which were the first aspect examined by the team. The team reduced the number of different types of pallets that needed to be ordered each month by standardizing packing processes, reducing the price per pallet by about $12 each. They standardized other packing materials as well, reducing the number of different envelope types from 17 to three and the number of different box types from over 250 to 115.
In spite of all the money saved, they did not sacrifice productivity or safety in the process. The evaluation did not impact specialized supplies or hazardous materials. The team is continuing to look at other areas, like gloves and tri-walls.
While you may not be able to afford the same quality of personnel the DLA does, you can still evaluate your packaging materials and processes to streamline them and save money.