The warehouse is often simply viewed as a place to store finished goods, raw materials, and supplies. However, leading consumer brands understand that it is much more than that. Warehouse real estate is typically limited, highly valuable, and not to mention costly. Space utilization can make or break the supply chain process, and brands that deliver a tangible product to their consumers must carefully consider warehouse capacity and projected usage rates before deciding how much packaging to order.
When comparing packaging that is printed conventionally to digitally printed packaging, it’s essential to understand how warehousing plays a role in deciding which product is right for your storage situation.
What’s the Story with Storing Flexo?
Traditionally, buyers are tasked with purchasing packaging at the lowest per-unit price. As a result, the tendency is to consider warehousing as another department’s concern if the unit price is the main focus. With conventional print methods, such as flexo, this buying strategy often means a higher minimum order quantity (MOQ). High MOQs balance out the significant initiation and production costs, including tooling and machine setup. A lower price per unit is possible since these expenses are distributed over a very high volume.
Despite its lower cost-per-unit, it’s essential to understand the amount of warehouse storage that large order volumes require. Large order volumes correspond to high inventory levels. Many buyers neglect to factor warehousing and inventory management into the total cost of procurement, along with the amount of warehousing space that is needed, especially if the product doesn’t perform as expected.
Given the nature of shortened product lifecycles, having large volumes of packaging in storage risks obsolescence. Brands are introducing new products and removing them out of the marketplace faster than ever before. Packaging can become obsolete even before the product reaches retail shelves. Excess unused packaging ties up working capital, occupies valuable warehouse space, and will likely end up in the recycle or landfill as wasted cash.
Digitally printed box (left) vs. Flexo printed box (right)
When faced with a warehouse capacity issue, the first solution that might come to mind for brands is to lease additional space offsite. But proceed with caution — this quick fix typically adds more cost than just the lease. Having multiple warehouses can also affect supply chain efficiencies while requiring additional personnel and resources to manage.
Making the Space Case for Digitally Printed Packaging
In the past, buying packaging at the lowest price per unit was the preferred strategy for many brands — even if it meant a commitment to high MOQs. However, with the latest digital print and finishing innovations for packaging, buyers can now shift their mindset to support a more responsive supply chain and maximize warehouse real estate.
Without the need for print plates, digital print eliminates or dramatically reduces initiation and setup costs associated with conventional print, lowering the barrier to entry, especially for low to mid-size order volumes. While cost-per-unit may be higher at large volumes compared to conventional print, per-unit cost is more consistent throughout the entire print run. Instead of having to forecast an entire year of a new product, digital printing enables brands to order the exact amount of packaging they need and on a more frequent basis. Order volumes can now align more closely with real-time sales data, rather than demand forecasts.
The print-on-demand nature of digital allows for just-in-time replenishment and significantly reduces the amount of packaging sitting in storage, along with the cost and labor associated with inventory management. In this way, digitally printed packaging maximizes available space, reduces the risk of excess inventory, and requires less initial out-of-pocket costs. These advantages are critical for growing brands when space and cost-savings constitute a significant concern.
Optimize Your Warehouse Space with a Pacific Northwest Packaging Advisor
The future of the packaging supply chain is digital. By utilizing digitally printed and finished packaging, brands can increase efficiencies, lower operational costs, and make the most of their valuable warehouse space by ordering based on product lifecycle rather than the lowest per-unit cost.
To learn more about how digital print can help maximize your warehouse, schedule a consultation with a dedicated Packaging Advisor. We can help you comprehensively plan your next digitally printed packaging project to enhance your supply chain process. Get started by requesting a quote today.