U.S. Labor Costs are On the Rise
In May 2018, the U.S. unemployment rate dropped to 3.9%. Add to this a healthy economic outlook and it’s easy to understand why labor costs are on the rise. Although many factors impact the total cost of packaging, labor can be one of the costlier components.
Analyzing your labor costs at each step of the packaging process from production through order fulfilment can reveal opportunities for cost savings. By streamlining and optimizing your packaging and associated activities, you can recapture some of those lost dollars and improve your product margin.
Here are 5 ways to reduce labor costs with packaging:
Evaluate Your Box Style
Use the right tool for the right job. Although a Regular Slotted Container (RSC) might be the go-to shipper solution (doesn’t everyone use this style?), there are enhanced box styles that deliver different benefits.
The main benefit of a basic RSC box is its dependable functionality and low cost per unit. This is the quintessential box that we all know and love. However, the RSC box requires time to assemble, as well as tape or glue on both the top and bottom to secure the closure.
To reduce assembly time, consider a snap lock bottom RSC box. When assembled, this box’s bottom automatically snaps together to form a secure closure. The benefits are twofold:
- Reduced assembly time = reduced labor costs
- Reduced supplies use = reduced materials costs
Switching to an enhanced solution like this may result in a higher cost per unit for your packaging. However, this increase in price is offset (and frequently exceeded) by your labor cost savings and boosted productivity in your packaging line.
Evaluate Your Packaging Design
Sometimes standard box styles are not enough. A custom packaging design can greatly impact the time it takes to assemble your pack and insert your product – for better or worse. Partnering with a design professional who can properly evaluate your current packaging and develop a custom solution that optimizes assembly without sacrificing product protection can be a major labor-saver.
Recently, The BoxMaker worked with one of our clients in Bellingham, WA to redesign their existing box, reducing packing time per box by 5 minutes. Although the new design cost slightly more, the savings on labor reduced costs by $1.66 per box, which more than compensated for the increased packaging cost and delivered a significant benefit to the bottom line for this business.
A great design also simplifies the use of material and additional packaging components used to keep your product safe or displayed properly within your shipping box. Decreasing your material footprint and reducing your use of void fill, bubble cushion, tape, and other packaging items lowers the overall cost of your box. Right-sized packaging reduces your shipping costs, too!
Speed Up Repetitive Tasks with Jigs or Fixtures
In environments where your production team repeats the same actions day-in and day-out, assisting their movements with a jig or fixture can increase productivity and reduce the risk of job-related injury or fatigue.
Enlist Automation Where Appropriate
Automated packaging machinery can perform a variety of tasks. Machines exist that that seal cartons, apply strapping, wrap pallets for shipment and more. Purchasing automated machinery is an expensive investment, but when done wisely, pays for itself. This frees up your workforce to accomplish more complex tasks and help grow your business.
Consider Outsourcing Assembly & Fulfillment Tasks
Particularly for growing brands, managing the labor costs of in-house product packaging assembly and order fulfillment can be a significant burden. If your labor needs flux from week to week, the ability to scale up or down as needed is also of great benefit.
By outsourcing your assembly and fulfillment tasks to your packaging partner or a trusted 3rd party you can avoid carrying the labor cost and everything that goes with it. This is a great way to control your labor and business costs.
By taking stock of your current use of labor associated with packaging and assessing for opportunities to simplify, you can reduce labor costs and total packaging spend.
For help identifying ways to control costs and improve margin, contact The BoxMaker’s Packaging Advisors today.