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Over Packaging: Are You Paying to Ship Boxes of Air?

Sep 19, 2019

The convenience of two-day shipping from online retailers like Amazon has created a boom in online purchasing. Over the last two years, online retail has surged by more than 30%. In this new quick-to-order-quick-to-receive environment, warehouse supply chain efficiencies can suffer. One way this happens is through over packaging, using boxes that are larger than needed or by failing to optimize shipments via product consolidation.

The risks of not optimizing your warehouse packaging and box sizes include financial and environmental impacts. Shipping merchandise in larger-than-necessary boxes means higher shipping costs. With smaller and more optimized packaging, warehouses will have a lower cost per unit, savings which could be passed onto the customer. Selecting the right sized boxes can also reduce the amount of cushioning and void fill needed, further lowering costs. 

Larger boxes can also result in more damaged products. If your warehouse doesn’t use enough cushioning or void fill to accommodate for the extra space in large boxes, products could be damaged during shipping. Damaged products result in higher shipping costs (to account for products being returned) as well as frustrated customers and potentially a tarnished brand reputation for retailers.

According to Fast Company, 165 billion packages are shipped in the US each year, with the cardboard used roughly equating to more than 1 billion trees. The environment also takes a toll from all that excess packaging. A majority of that cardboard gets recycled and reused, but not all of it. Not optimizing your packaging leads to more cars and trucks on the road to deliver packages, which adds more congestion to our cities, as well as an increase in packaging waste, pollutants to our air, and cardboard to our landfills.

Improving Item and Box Size Accuracy
There can be multiple reasons why you’re using shipping packages that are much larger than they should be. Some of the issues could relate to your WMS integration. You have to understand your current WMS and determine if you can implement a solution to cartonize or pack inventory. Then you can evaluate the accuracy of your item master data; without this there will be issues with trying to cartonize inventory efficiently.

Consider the following:

Does your Item master have the correct weight and dimensions for all valid unit of measures?
There are different options of recording your weight and dimensions for eaches, inner pack, case, layer, and pallet, to name a few. The accuracy of your item’s unit of measure (UoM) data is crucial in regards to cartonization.

Do you have containers, boxes, tubes, or envelopes available for all items?
Is your WMS configured to handle these different container sizes based on dimensions, volume, and weight? Are there predefined preferences to use specific box sizes due to factors that may include costs or historical data to name a few?

Does your WMS have the ability to perform packing processes or cartonize orders?
4SIGHT can review your current WMS’s ability to cartonize by order or by enhanced logic using dimensions/weight/volume. If your current WMS does not support this functionality, 4SIGHT can help integrate and deploy a cartonizing/packing solution.

Warehouse Design Plays a Part
In addition to your WMS, the current design of your warehouse may not be fit to handle the evolving e-commerce landscape.

The rise of e-commerce has forced many warehouses to re-invent themselves. They have gone from traditional brick & mortar retail businesses to trying to compete in the emerging e-commerce world. These changes have created the need to change the flow of product throughout the warehouse. Warehouses have gone from predominantly shipping bulk cases to stores to now shipping small cartons or jiffy mailers/envelopes to individual customers.

Drive roller conveyors with center-to-center widths are not always conducive to small, lightweight packages. In this case, belted conveyors may be a better option. Sorters are another limiting factor within the warehouse. Sorters designed to handle large containers can’t always accommodate envelopes or small packages, which are often the most optimal packaging for small parcel shipments. 

Software can also impact your ability to optimize shipments. Some software packages are often difficult to switch from a pallet-fill or truckload-fill optimization to a fill-carton optimization. Changing the process from cubiscanning the cases to breaking the cases open and scanning each unit can be challenging from both a space on dock perspective as well as the cumbersome task of updating the WMS UoM configuration.

Outbound processes can also be a factor.  Many companies look at multi-touch (pick/sorting) operations as a negative, so they choose to pick directly to the shipping carton. This can be a good solution if the item master translates well into a cartonization platform, and the box selection is efficient. However, if you are experiencing issues with the cartonization/box selection algorithm, you may need to look into whether the fill percentage based on item types or box size is correct, if the item master dimensions are correct/complete, and whether all critical dimensions are being considered.

4SIGHT Can Help
4SIGHT’s experienced team of supply chain experts can help evaluate your current cubing algorithm and make the necessary adjustments, or analyze and explore technology solutions unique to your distribution and fulfillment operations.

Aside from evaluation, 4SIGHT can also help with the design or re-design of your warehouse and/or your current or new system. We can analyze your system and operational processes and provide recommendations for additional technologies, equipment changes, or process updates.

Inefficient packaging impacts consumers, shippers, and the environment. Warehouses that optimize packaging by consolidating shipments and using the correct box sizes can reduce costs, lessen their environmental impact, and better meet customer expectations for less waste. They can also help their retailer customers boost their brand in the process.

Contact us to get started.

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