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How to Manage Rising Costs in a Changing Business Landscape

October 12, 2017

The Rising Costs of Doing Business

There’s no question that one thing you can count on today is that the cost of doing business will continue to rise. From healthcare to utilities, labor and more, it’s in the best interest of every company to ensure they are operating as efficiently as possible to help offset these increasing costs.

Within the packaging industry, 2017 has seen increases across the board for raw materials. This, in turn, drives up the cost of goods, making your packaging purchase more expensive. In addition to these price increases, the costs associated with labor and freight can be enough to drive anyone mad. For any size of business, these variables combined can create significant impact.


What Can Be Done to Manage Rising Costs?

Luckily, there are proactive measures that brands can take to control these costs as much as possible, or offset a rising cost in one area of business by reducing the cost in another. In these cases, packaging design and supply chain management can have a major impact on controlling your costs.


Increase Efficiencies with Effective Design

The right packaging design can help a company cope with labor, freight, and raw material costs.

Regarding labor costs, if your packaging is cumbersome or complex it could be the cause of increased time spent in assembly, which equals more dollars spent on labor. With a streamlined design, manpower is kept at a minimum and labor costs are controlled. Recently, The BoxMaker worked with one of our clients in Bellingham to re-design 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.

Structural Design Desk

Freight costs can also be controlled through effective packaging design. By reducing your packaging to a smaller DIM weight, you can achieve significant cost savings. For one BoxMaker client, our award-winning design team was recently able to trim freight costs by almost $10 per box by reducing the dimensions of the box to achieve a smaller dimensional weight - equaling huge savings!

When it comes to raw materials, updating your packaging design to do more with less can reduce your material volume without sacrificing product protection. With the rise in eCommerce, consumers are already demanding improvements such as frustration-free packaging, which can have meaningful benefits, such as cost savings, for the brand as well.

Companies should take a close look at all their product distribution channels and make efforts to streamline design for each individually (retail, eCommerce, wholesale, and more).


Streamline Your Supply Chain and Go LEAN

Once a brand has achieved what they can by optimizing package design, complementary actions must be taken to streamline their supply chain to maximize cost-controlling benefits. Companies can achieve significant improvement by implementing LEAN practices and working with a packaging supplier who delivers value throughout the supply chain.

Inventory costs can be a significant burden when it comes to the cost of doing business. In addition to the physical space required to house packaging that is not yet ready to be used, companies should evaluate the total cost, which also includes the labor and machinery (think: forklifts) to manage this space and move materials around until they are ready to be utilized or sold. By partnering with a packaging provider who offers warehousing solutions, you can achieve just-in-time inventory management and only keep onsite what you need in the short-term for your orders at hand.


Kombucha Town cans The BoxMaker warehousing Aluminum cans stored at The BoxMaker


Another way to control inventory is to only print what you need rather than ordering packaging in large volumes. Digital print production delivers this capability like never before by enabling businesses to order in quantities as small as 1. Not only does this help a company reduce their obsolete inventory, packaging waste, and warehousing needs, but digitally printed packaging and display also enable brands to scale quickly to meet market demand, easily incorporate limited-run promotions, and start a personalized conversation with the consumer. When it comes to total cost of ownership, leveraging the power of digital print can often have significant value for a brand.


Agility is the Key to the Future

The companies who will benefit the most in today’s changing business landscape are those who are able to achieve agility in as many areas of their operations as possible. The ability to be responsive to the demands of the market and the rising tide of costs will make all the difference to a brand’s bottom line. Packaging suppliers who invest in delivering this capability to their clients will be value-added partners well into the future.


Are you ready to achieve maximum efficiency with your packaging design and supply chain? Contact The BoxMaker to start controlling your business costs today.


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