Packaging redesign cuts transshipment damage costs by $200,000
11 September 2022
This leading pharmacy automation and robotic manufacturer was troubled by damage consistently occurring during transhipment to its products. Not only was it costing them in the order of $200,000 a year, it was occurring on overseas logistics legs — making it simply an impossible situation.
With, their existing vendor unresponsive, the manufacturer turned to Larson Packaging Company (LPC) for help.
LPC’s packaging experts found the situation was even worse.
The packaging design was not only ineffective but cumbersome. Packing and shipping was slow (and consequently expensive).
Further, the packaging vendor was oversupplying — and the result was unnecessary expense and warehouse clutter.
The upside was the potential for significant streamlining.
First, LPC’s packaging experts worked with the manufacturer to redesign the export crates with higher performance foam cushioning system for maximum in-transit protection against damage.
At the same time, LPC logistics staff created a synchronized inventory tracking with the manufacturer and their 3PL to streamline packaging inventory. The aim was to ensure there was enough inventory to ship that day, but never too much.
Production would be synchronized to meet the manufacturer’s ongoing demand and LPC customer service would update the requirement daily.
The result was $50,000 reduction in held inventory without incurring any late shipments whatsoever. And the improved packaging design saved $200,000 in product damage over the course of a year.
A switch to a toolless crate design slashed the time required to pack the product from well over 30 minutes to just 3 minutes.
And there’s been an equally dramatic reduction in the amount of warehouse floor space required for packaging.
Plus the manufacturer operates the entire program with less than 1 FTE, which has allowed them to redeploy key staff to their core business.