Standardise packaging, optimise processes, create synergies
Do you know how many different types of packaging are used in your company? One of our customers, a highly diversified industrial group, is currently experiencing the synergy potential that can be achieved by harmonising packaging...
The company is an industrial group with eight divisions and 150 sites, including automotive, pharmaceutical and chemical. Each division has various plants in Europe – and they all regularly require large quantities of packaging. Until now, there has never been a central purchasing department for this: each site obtained its packaging from local suppliers. The packaging was usually designed and printed individually for each customer; specifications or overarching standards were not established. One reason for this was the very different local conditions, for example in warehouse logistics. As a result, an estimated 1,000 to 3,000 different types of packaging were in use throughout the company – no one knew exactly how many. There were a total of around 40 suppliers for all locations, including members of our ‘Blue Box Partners’ alliance, which supplied three locations in Germany and Spain.
Rising costs bring the issue of packaging to the fore
The coronavirus pandemic in particular prompted the industrial giant to take a closer look at the issue of packaging diversity, as costs were rising sharply due to the shortage of materials, among other things. A two-person team began to analyse the variety of packaging options and advise the sites on this topic. On this occasion, those responsible also recognised the strong dependence of the sites on their local suppliers. In addition, another "construction site" required new solutions: The company used less environmentally friendly materials for its packaging in addition to Wellpappe, but has to fulfil high requirements in terms of sustainability.
High synergy potential recognised
All of this resulted in enormous optimisation potential, which the European alliance of Blue Box Partnersof which we are a founding member, began by analysing the European markets. Initially, BBP's packaging developers and sales managers advised the buyers and packaging specialists at the customer's individual plants on the design, palletising, handling, printing and conception of packaging. At the company's annual Packaging Council, a BBP team presented specific packaging optimisations and demonstrated the enormous potential that lies in harmonising packaging across all sites - and thus dispelled the customer's last reservations. At a Wellpappe training course at our Klingele Academy, we then jointly analysed packaging processes and developed alternative proposals to existing packaging concepts. These initial steps turned into a major project that will run over a period of three to five years. The aim is to compare and ultimately harmonise the packaging in the respective divisions. It started with the Automotive Division and is now also being worked on in the Chemicals Division.
BBP: Packaging partner for Europe
Our BBP alliance offers decisive advantages when working with companies that are present in many locations: Firstly, it is represented in almost all relevant European markets; customers therefore benefit from direct personal contact and at the same time a European structure and presence in line with the motto "Act local - think global". In addition, the importance of integrating paper production was particularly evident at a time when paper was in short supply on the market. In view of all these factors, BBP is now the company's packaging partner for Europe - and no longer "just" a supplier to a few locations.
Focus on total cost of ownership
The collaboration with the industrial giant has already had a significant impact in a short space of time. Among other things, the establishment of packaging standards and specifications has led to significant savings potential. However, the major leverage effect only comes from a joint view of the entire internal and external costs and processes - and therefore the total cost of ownership. This is made up of a large number of influencing factors: It starts with details such as the design of material-saving packaging that is adapted to the product size and does not end with the saving of process costs if, for example, fewer pallets are required due to modified packaging. Simply selecting a different type of corrugation can significantly reduce the space required on the pallet and therefore the logistics costs - and the environment also benefits: replacing the 7 mm BC corrugation with the EE corrugation (3.6 mm) for one product meant that the packaging only had to be retrieved once a week instead of three times a week. The cross-location optimisation process is time-consuming, but it is worth it. Our BBP experts estimate savings of around eight to ten per cent on sales costs and an additional five to eight per cent through efficiency gains in the internal process.
Cooperation creates added value
The close networking between BBP and the company, as well as the individual locations, has not only resulted in concrete savings potential but also a high learning effect. Working together as equals also ensures a high level of acceptance of the joint work - because it generates real added value, even beyond the pure cost savings. One of the plans for 2023 is to set up a joint database in which all relevant packaging documents will be collected. This means that the knowledge generated is not lost and is accessible to all those responsible. Are you a company with many (international) locations, but packaging has been a blind spot for you until now? Then you should take a closer look - preferably together with us. It's worth the effort, and not just financially. We also have a wealth of expertise in optimising your logistics processes and your eco-balance. Put us to the test! We look forward to it.
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