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Damco unveils packaging optimisation to cut supply chain costs

Jun 3, 2011 Logistics

DAMCO has started offering a packaging optimisation service for cargo shipments, which it says could save customers 10-20 per cent of the total supply chain cost.


"In most companies packaging remains a stepchild even though the potential for cost savings is massive," said Erling Johns Nielsen, global head of supply chain development. "Very few companies focus on the power of packaging to reduce costs.


"Typically they will look into reducing air freight, increase container utilisation, use larger containers or optimise the routing of traffic. But if you really want to save money on transporting goods from A to Z you should start by looking at the initial unit: the box. Ultimately this is what determines the entire set-up of the supply chain," he said.


To provide the packaging optimisation service the logistics firm has teamed up with Supply Chain Optimizers (SCO). "Partnering with Damco has been an excellent fit for us. Not only due to its size and large customer portfolio, but also because of its strong focus on delivering value-added services to customers that eliminate waste and remove cost from their supply chains," said SCO president Jack Ampuja.


Package optimisation, according to the company, often comes down to three practical questions: do current packaging dimensions optimise handling and storage costs? Do cartons have the minimum thickness to guarantee strength? How much air is being transported and paid for in the shipper's supply chain?


It said a simple step such as reducing the height of boxes by two centimetres may mean that another 100 boxes can be fitted into the same container, saving money on the box, transport, warehousing and possibly even on damaged goods.


"We start by taking for instance the 15 or 20 biggest volume products at a time. This way it is manageable for all parties involved. Right now we are working on a project with one of the leading department stores in the US. So far we have managed to save more than US$250,000 (20 per cent of the supply chain cost) and more than 370,000 kilogrammes of CO2 emissions by just looking at 15 different products," added Mr Nielsen.
(Source:http://www.schednet.com)
 

 
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