Beating last year’s income objectives while reducing costs is the crux of the work that you do every day. Doing more with less is the critical challenge that every business manager faces.
While packaging often seems like a simple line item expense at first glance, it actually offers substantial opportunities to increase revenue and decrease expenses.
HELP IS ON THE WAY
At New-Tech Packaging, we refuse to treat packaging like a simple commodity product. We are a technology company, working in a commodity industry. We leverage our strength and technical expertise to provide better materials, better designs, and creative innovation – resulting in packaging solutions that are better, faster, and cheaper.
While our competitors will take a list of all of the items that you’re currently buying, and then quote the same items, we bring a team of technical professionals to address the following 12 strategic cost drivers. We call this process a “Packaging Audit,” and it is the foundation for saving money and increasing value.
12 STRATEGIC COST DRIVERS
The cost of the packaging materials is the most obvious packaging expense. It provides the starting point in
New-Tech’s Packaging Audit process. We seek to
understand your packaging materials and what’s
required of them. By understanding the demands, we can explore ways to reduce material costs: reduce package content, change material used, and right-size the package. We test and validate our assumptions before making recommendations. While material costs are the most obvious packaging expense, they’re not always the most important. Our packaging audit will look through the lens of 11 other
cost drivers to find the lowest total cost.
The cost of getting your product into the package can be as high as the material cost itself. Our packaging audit will explore how you get your product into the packaging and
we’ll help you find ways to streamline, automate, and
improve efficiency — from the packaging line to the
shipping workstation and to your customer’s door.
FedEx and UPS charge for the size of the package, not just its weight. Making the packages as small as possible gives the lowest shipping cost. But what size should your packages be? If you have dozens of box sizes, how do your employees know which size to use? How do you know which box sizes
to change (if any) to lower your freight costs? Optimizing
the size of your packages can provide enormous freight cost savings. Our packaging audit will evaluate the size of your cartons and recommend changes to unlock these potential savings.
When products get damaged in shipping, you end up with unhappy customers. This is expensive for you, because you have to replace the product and the packaging, essentially doubling your cost. In the packaging audit process, New-Tech will get to the cause of the damage and find the lowest cost method to protect your product.
You’re already packaging your product today. The materials, their size, the way they fit together, and the printing and graphics all comprise the design. When New-Tech evaluates your design cost, what we’re really evaluating are inefficiencies that are built into your design. Is it difficult to put together? Is it made with the best materials? Are you missing sales that could be made with better packaging? New-Tech will redesign your packaging when it can significantly reduce your costs or help to improve your revenues.
Captures “what did we fail to do?” What orders were missed? What productive processes could be accomplished if not for inefficiencies and waste? Opportunity Cost captures the expenses of falling short. New-Tech’s audit process identifies these missed opportunities and enables you to strategically fulfill them.
There is increasing social and political pressure to measure the environmental impact of both products and product packaging. While many companies today view environmental impact as a soft cost, the hard dollar impact is seen when packaging bloats product footprints and significantly impacts material, transportation, and warehouse costs. At New-Tech, we realize that being environmentally conscious is consistent with sound packaging economics. We’ll help you identify the environmental costs that are impacting your bottom line.
Packaging costs are the costs of money – both external interest charges and internal costs of capital – that arise from both one time events and regular day-to-day activities. Certainly these finance costs should be considered as part of the total packaging cost. New-Tech will help you identify and reduce your underlying packaging finance costs.
The packaging process can lead to ergonomic costs, seen in repetitive motion injuries and Workman’s Comp claims. These are expensive and can be strangely contagious when workers learn that one of their co-workers has received a monetary settlement and time off. New-Tech will help you identify packaging processes that are putting your business at risk, and then design better processes that eliminate the ergonomic risks while improving your overall packaging throughput.
Sourcing, negotiating, and administrating the purchase of packaging materials – these activities carry a significant cost. New-Tech will help you root out those transaction costs by presenting New-Technologies and ways of managing the transaction that are more effective.
Packaging materials are usually expensed upon receipt, rather than booked as an asset. As a result, packaging inventory immediately impacts profitability in a negative way. Packaging inventory also consumes cash, taking it from the many places where it could otherwise be spent, making it extremely advantageous to defer receipt of inventory for as long as possible. New-Tech’s packaging audit process will evaluate your on-hand packaging supply needs to determine how inventory inefficiencies are impacting your profit and loss reports. In some cases, New-Tech can warehouse your packaging supplies, and deliver them to you same day/
next day, allowing you to defer the expense and boost
your bottom line.
When businesses focus on their core competency, they’re usually more effective and far more profitable. Unless you’re in the packaging industry, packaging is probably not your
core competency. New-Tech will help you identify packaging outsourcing opportunities that will free up your human resources and increase your profits.
LET US SHOW YOU A BETTER WAY.
You’re already packaging your products. You just need to package them better, faster, and cheaper. That’s where New-Tech excels.
Invite us in and allow us to do a packaging analysis in your facility. Our packaging audit process will uncover significant savings and helps to deliver your Better, Faster, Cheaper.