Implementing a New Packaging Solution, Chainalytics Provides Razor Manufacturer Savings and Sustainability Improvements
Packaging, while easy to overlook, has a profound impact across the entire supply chain, for it touches almost every aspect of the organization. As consumers move through the aisles of various retail sites, many will never consider how packaging affects cost, handling, shipping, and more. Even the smallest of changes can save a manufacturer thousands of dollars per year while simultaneously reducing negative environmental effects.
Seeking to increase overall supply chain efficiency with a new package design, a major shaving razor manufacturer partnered with Chainalytics for its expertise in packaging assessment, design and value chain engineering. The organization hoped to achieve a reduction in costs as well as their overall carbon footprint, all while improving operational processes.
The project solution involved multiple changes to the existing primary and secondary packaging designs. For the primary packaging, the Chainalytics team identified two major areas where optimization could occur. First, they created an optimized product nesting pattern, reducing the overall thickness of the packaging without affecting the marketing graphics and display opportunities required for retail placement. Second, the team eliminated an unnecessary thermoform insert that allowed for a reduction in overall material usage.
For the secondary packaging used to ship and store the product, the team evaluated the current design and methodology to identify opportunities for change. They discovered by changing the stocking cartons and case, they would create an additional materials reduction while improving overall space utilization. This allowed for more product to be stacked and shipped in a single truckload, which substantially cut transportation costs.
Through the Chainalytics partnership, the desired results of the project were accomplished with additional benefits. For starters, the new secondary packaging design created increased pallet loads, allowing for cases per pallet to jump from 21 to 39 (an 85% increase!). This also enabled an LTL freight class change from Class 150 to Class 100, creating a transportation cost reduction. Next, the larger pallet density and improved storage numbers increased the shelf count at retail sights, maximizing the amount of product on the shelf, while minimizing the chances of stock outages. Furthermore, the increased inventory and stock levels allowed the manufacturer to recover and regain key customer accounts crucial for product distribution and consumer availability.
While the project created significant financial gains, it also had a major impact on reducing the manufacturers overall environment effects. After implementing the solution, the Chainalytics team identified several positive benefits associated with the client’s sustainability initiatives. First, the reduction in material amounted to a reduction of 1.6M square feet in paperboard as well as a 30% increase in pallet density, resulting in a 23,000 square foot storage volume improvement.
Additionally, the new packaging solution provided a 24% decrease in annual truckloads, totaling a reduction of over 2500 gallons of diesel needed to move the product. This also required less handling by over 1500 touches and eliminated 28 tons of CO2 emissions. The total measurable annualized cost savings equal $216K, and the environmental benefits are ongoing. The partnership with Chainalytics’ Packaging team demonstrates numerous ways an organization can achieve their goals while ensuring consumers continue to receive quality product at the lowest cost.
For more information on how Chainalytics can help with all your packaging challenges, please contact us at Packaging@Chainalytics.com.