by Elizabeth Hines | Jan 22, 2014 | Blog, Strategy, Supply Chain
This post was originally published on EBN.
Packaging optimization is critical to supply chain optimization. To catch big advantages, change your mindset and make packaging a forethought rather than an afterthought.
In a Packaging World article, Elisha Tropper, president and CEO of Cambridge Seals Security (CSS), describes how packaging is typically thought of by manufacturers:
An afterthought… for most [manufacturers of industrial products] packaging is not a consideration. They are manufacturers; they are not packagers. They make an industrial product, and industrial products are dropped into boxes. But whether a box is an inch bigger or an inch smaller, what does it matter?
The truth is, it matters a lot. If you want to optimize your supply chain you need to optimize your packaging. This means changing your mindset when it comes to packaging — packaging needs to become an early consideration.
There are several components of packaging. For example, the product itself, the box or container in which the product is placed to sell, and the box or container the items are placed in for shipping. Each of these components are opportunities for optimization.
Package (re)design
A May 2013 industry study by Freedonia forecasts that pallet use in the US will grow 2.4 percent annually to 2.6 billion in 2017. The study also reported that demand for new pallets is expected in increased by 3.5 percent annually to 1.3 billion units.
The International Organization for Standardization sets the standards for pallet size; there are currently six pallet standards. The most common size used in the United States is Grocery Manufacturers pallet, which measures 48 inches by 48 inches. The dimensions of a pallet are not always considered with respect to packaging; this is a costly mistake.
Let’s look at an example previously highlighted in Supply Chain Digest. Adalis (now H.B. Fuller Adhesive Coated Solutions) worked with a telecommunications company to redesign their packaging to optimize pallet use. By reducing the size of each unit package by 1.5 inches in one dimension, the company was able to increase the number of units that could fit on the pallet by 150 percent (from 120 to 300 units). The result was a signification reduction packaging (materials) costs and transportation costs.
Product (re)design
Product design or redesign is another way to optimize packaging to optimize your supply chain.
Let’s go back to Elisha Tropper. Tropper was the former owner of a packaging convert and his packaging consultancy, T3 Associates, acquired CSS in 2010. When Tropper took over at CSS he challenged the company to take packaging optimization into consideration at the point of product design. The company took the challenge and redesigned the product. A significant reduction in package size and materials usage resulted. According to Trooper: “A standard pallet of our boxes can hold about 120,000 seals, while that same pallet will hold only about 80,000 of our competitor’s seals.”
Ikea provides another example, which Colin White outlines in his book Strategic Management. When Ikea first began manufacturing its Bang mug, 864 mugs could fit on a pallet. Ikea redesigned the rim of the mug so as to maximize pallet efficiency — Ikea was able to increase the number of mugs per pallet to 1,280. The company decided it could go further. Another redesign increased the number of mugs per pallet to 2,024. As a result of the product redesign, the company reduced shipping costs by 60 percent.
Outside the box
Ikea has taken packaging optimization for supply chain optimization even further and has created a system called OptiLedge, which eliminates pallet use. Retailers using OptiLedge have realized a savings of been $200 to $300 per container.
Major factors for cost savings include a reduction in man hours to off-load (a savings of between 15 to 23 hours or more of labor per container), space savings (one truckload of OptiLedges would be the equivalent of 23 truckloads of traditional pallets), and weight (OptiLedge weighs under two pounds as compared with the 50 to 75 pounds that a traditional pallet weighs). In addition, OptiLedge eliminates underhang and increases fill rates.
Too often, everyone thinks of packing as the thing that gets thrown away. Smart manufacturers, though, will ensure that good money isn’t tossed out with the box or pallet.
by Fronetics | Jan 14, 2014 | Blog, Leadership, Logistics, Strategy, Supply Chain, Talent
Hiring: Why you should try before you buy
Source: http://www.lethbridgemusicaltheatre.ca
I just finished reading a great post on hiring by Matt Mullenweg, founder of Automattic and the creator of open source WordPress software. The post focuses on the company’s “unorthodox hiring system” and how it has enabled Automattic to hire great talent and realize high employee retention rates. Although time consuming, I think Mullenweg and Automattic are on to something.
Before Automattic extends an offer, the candidate must first go through a trial process, on contract. The candidate is given real work and is compensated for doing the work. At the end of the trial process both the company and the candidate have a better picture of each other and if they are a good fit. Or as Mullenweg puts it: “There’s nothing like being in the trenches with someone, working with them day by day. It tells you something you can’t learn from resumes, interviews, or reference checks. At the end of the trial, everyone involved has a great sense of whether they want to work together going forward. And, yes, that means everyone — it’s a mutual tryout. Some people decide we’re not the right fit for them.”
Mullenweg acknowledges the “huge time commitment” of this process. But he points out the benefits and why they have not abandoned the system for an easier one: the process is able to identify great talent that works well within the company’s culture, the process weeds out candidates that are not a good fit before they become a part of the team, and the process had led to consistently high retention rates.
In my experience, too often both companies and candidates are guilty of moving their relationship forward faster they should – and regretting it later. For this reason “auditioning,” as Mullenweg calls it, or “try before you buy” as I think of it, is an hiring strategy that should be embraced more often.
What do you think of this hiring strategy? What are the advantages and disadvantages do you see?
by Fronetics | Jan 14, 2014 | Blog, Leadership, Logistics, Strategy, Supply Chain, Talent
Hiring: Why you should try before you buy
Source: http://www.lethbridgemusicaltheatre.ca
I just finished reading a great post on hiring by Matt Mullenweg, founder of Automattic and the creator of open source WordPress software. The post focuses on the company’s “unorthodox hiring system” and how it has enabled Automattic to hire great talent and realize high employee retention rates. Although time consuming, I think Mullenweg and Automattic are on to something.
Before Automattic extends an offer, the candidate must first go through a trial process, on contract. The candidate is given real work and is compensated for doing the work. At the end of the trial process both the company and the candidate have a better picture of each other and if they are a good fit. Or as Mullenweg puts it: “There’s nothing like being in the trenches with someone, working with them day by day. It tells you something you can’t learn from resumes, interviews, or reference checks. At the end of the trial, everyone involved has a great sense of whether they want to work together going forward. And, yes, that means everyone — it’s a mutual tryout. Some people decide we’re not the right fit for them.”
Mullenweg acknowledges the “huge time commitment” of this process. But he points out the benefits and why they have not abandoned the system for an easier one: the process is able to identify great talent that works well within the company’s culture, the process weeds out candidates that are not a good fit before they become a part of the team, and the process had led to consistently high retention rates.
In my experience, too often both companies and candidates are guilty of moving their relationship forward faster they should – and regretting it later. For this reason “auditioning,” as Mullenweg calls it, or “try before you buy” as I think of it, is an hiring strategy that should be embraced more often.
What do you think of this hiring strategy? What are the advantages and disadvantages do you see?
by Elizabeth Hines | Oct 29, 2013 | Blog, Leadership, Logistics, Strategy
There are a host of issues and risks you need to consider and mitigate when implementing an international reverse logistics process. Here are six things to consider when taking your reverse logistics process international:
1. Laws, rules, and regulations
One of the first issues that you need to understand are the laws within the involved country (or countries) as well as any rules and regulations, such as taxes and tariffs, that focus specifically on border crossing of defective or non-working electronics. Not taking the time to understand the legal system could result in fines and/or costly delays.
2. Costs
Costs are another issue. Labor, transport, and disposal costs, for example, vary vastly from country to country. Accounting for even minor cost fluctuations is essential, and not only for budgeting and cost containment. Shifting cost can upend even the tightest client relationships.
3. Product classifications
Product classifications can vary from country to country. Research how the client country classifies product types. When it comes to defective or nonworking electronics, one country’s commodity can be another country’s contraband. Furthermore, misunderstandings can be expensive. For example, understanding product classifications such as tested-defected or non-tested-defective can mean the difference in being able to resell or recycle in one country to another.
4. Service levels
You must also consider service levels. What are the labor norms? Are they drastically different than those in the United States? How will the labor norms impact the service level agreements you have in place? More than likely you will find that what works well here in the United States will need to be amended elsewhere.
5. Culture
Another important thing to consider is culture. One cannot begin working in another country without taking the time to learn about and understand the culture. Although it may be tempting, don’t try and change the culture. Real success comes when you work with/within the culture.
6. How things work
Finally, take the time to fully understand what it means to work in the specific country. For example, does the country shut down around the Christmas holiday? What impact will that have on meeting deadlines? How far will you need to plan ahead?
