It's easy enough to shrug off: what could a little extra cardboard, some packing peanuts or excess shrink wrap really cost? A few cents? The truth is that excess packaging, as with most wasteful spending of any scale on the supply chain, has a significant ripple effect that you're already feeling in your budget, whether you realize it or not.
Beyond the actual, physical cost of materials, which multiplies ad infinitum as your shipments do, there's more to consider. Excess packaging bundles the cost of obtaining the materials, the cost of their repeated application, the cost to the environment, and the cost of waste disposal. These four hidden costs can vastly outweigh that theoretically affordable material cost, damaging your overall operational efficiency in the process.
No company ever goes into packaging design intending to burn capital. In some cases, it's a hasty initial design decision that's never revisited, and in others, it's a "boiled by degrees" situation over time. The root of the issue often begins, innocently enough, in a contract with good intentions. You want your products to arrive intact, your supply chain partner doesn't want to damage them, so you incentivize that scenario.
Unfortunately, without proper terms to protect against excessive material and freight cost, you're effectively shifting the cost of the problem rather than solving it.
If there are no penalties in place for excess packaging, it's only logical your partner would choose to–or stray over time towards–that route.
Opportunities to operate lean rarely come bearing well-lit signs. The next time you have a shipment due in work materials, product components, even finished products, look for these red flags:
An abundance of caution is never unwelcome when transporting and receiving shipments, but how does one tell the difference between excess and prudent padding? One of the best ways is to put it to a real-life test: send both the suspected overpacked item and the same item in pared-down packaging through your carrier of choice. Examine both and determine if the added layers helped or simply tread water alongside the leaner packaging option.
With so many variables in any given supply chain, this is the most reliable way to test your packaging to determine if you can afford to scale back. Chances are, you'll be pleasantly surprised at the results. After all, your supply chain partner may be concerned about breakage, but the hefty financial liability carried by some 3PLs is a much more reliable–pardon the pun–cushion against disaster. If you're looking for a logistics provider that will provide your company with as much careful protection as your packages, be sure to read our Selecting and Managing a 3PL eBook, which offers the tips and tricks you'll need to form a lasting, beneficial partnership.