First, consider the current situation at many companies:
• Packaging Engineering is separated from Product Design, Testing and Supply Chain, resulting in everyone attempting to optimize their piece of the puzzle at the expense of achieving the lowest possible overall cost, even if some costs increase. The silo effect of departmentalization invariably increases costs if management isn't made aware of tradeoffs. For instance, has supply chain ever considered the cost implications of inappropriate lab tests that needlessly lead to larger packages for protection? Has supply chain considered the cost implications of Marketing wanting a certain shape/geometry of the product that lessens loading density? Has R&D balanced the cost of components with the extra cost needed for protecting poorly designed components?
• Product Design is not analyzed for financial impact on all aspects of logistics, such as shipping, storage, handling, packaging cycle times, product assembly cycle times, damages, worker ergonomics, and re-work.
Packnomics = The art of thinking outside the box to achieve lowest landed cost.
• Kevin Howard initiated the concept of "Design from the Outside In" when he first noticed double-stacked dishwasher boxes left a large void space at the top of trailers, yet there wasn't quite enough space to place one more layer into the trucks. He then discovered that both built-in and portable dishwashers used the same sized boxes, even though the portable products were 3" taller. He then found out his predecessor thought it would reduce box costs if all products used the same sized box, even though the larger product made up only 10% of all products. There was no financial cost impact study done, being only focused on material costs, and yet, even for material costs it didn't make any sense. Reducing the box height by 3" for 90% of all dishwashers allowed a 50% improvement in shipping density, saving $2 million/year for transport, plus a small amount for material savings.
This was the first of many projects to use standard truck, ocean container and airplane sizing to drive package and product sizing. Why? Because shipping charges far outstrip packaging material costs, usually by 5 to 10 times, so densifying products for their longest journey is job #1.
• Part Design – minimize packaging, maximize density and handling ergonomics by introducing functional design to parts beyond their product function. Sheet metal and injection molded plastic parts are rarely examined for their supply chain cost implications. The component designer is rarely aware of how their parts will be packaged and shipped. If they require partitioned boxes to help protect and separate parts, this not only increases packaging costs, but may also imply fragile features are sticking out. Kevin has worked on numerous components to help make them far less costly for shipping and handling, and more rugged, by showing designers how to make parts self stacking, self nesting, self presenting and self protecting, all while improving density.
• Product Design – Most companies focus on product functionality when designing new products. On top of that, they like to make the product look nice. These are obviously important for success in the market place, but most companies have missed the cost implications, beyond direct material costs, of how shape, size and fragility add needless costs...Design for Distribution is an additional requirement placed upon the organization to assure the lowest landed cost for a product with certain functionality. How robust should the final, bare product, be? If not robust enough, then lots of protective packaging will be required. If too robust, then money is wasted. If shape and size haven't been assessed correctly, then an avalanche of needless costs are induced, including packaging, pallets, storage, material handling, damages, and shipping charges, all because density wasn't maximized.
• Test methods and intensity levels – Improper laboratory tests assure either over-packaging, thus increasing costs needlessly, or under-packaging, thus resulting in field damages. Packnomics has repeatedly demonstrated how to test better, leading directly to lower damages and packaging-related costs.
• Packaging design and materials – Proven techniques to use less cushion materials than design books and suppliers normally indicate. Did you know that cushion curves can lead to using twice as much foam cushioning as you really need?
• Material handling methods – Companies can influence the material handling methods used, and thus the amount of damage incurred, by modifying the form factor of their packaging. Great success has been achieved repeatedly by eliminating or minimizing packaging in order to better unitize products, resulting in lower material costs and damage rates simultaneously.
• Supply Chain design and mapping – Large companies often don’t realize the chain of events their products typically pass through, nor the consistent failures that occur. Field data rarely captures the realities, yet without this knowledge, it’s not possible to solve the unknown problems, let alone the known ones. Kevin Howard is well known for his studies of supply chains and defining how and why products damage while in transit. Comparing failing products vs. non-failing products in the same supply chains often leads to answers, but this can only be done with direct observation.
• Zero-based costing for packaging tools and parts – Separating out all of the costs that make up a final price can lead to cost reductions.
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