As Fulfillment Complexity Mounts, a Little Air Goes a Long Way
This week’s guest blogger is John Wolf, Vice President Sector Marketing at Sealed Air.
Customers sure are hard to please. Not only do they want things delivered faster and cheaper, they also want a greater variety: More products, more variations on existing products, more accessories and add-ons. More, more, more.
A study by Motorola found that by 2018, 54% of warehouses planned to increase order volumes and the number of inventory SKUs.
With every new SKU comes additional complexity. Where will it be stored? How should it be packed? How much will it cost to ship?
Many companies employ a force of full-time packaging engineers to design and implement packaging strategies that are intended to minimize damage and keep shipping costs under control. However, the ability to ensure consistency and mitigate risk across the product spectrum is reduced by high levels of labor turnover. Having the perfect packaging process is moot if the person doing the packing isn’t going to be there tomorrow.
Bringing in new hires requires a constant investment in training, and businesses have to accept that during the first few weeks or months, those untrained new hires are going to be more prone to overpacking (and sending boxes out the door at a higher shipping cost) or underpacking (and increasing the risk of damage).
More individual SKUs can also trigger companies to stock up on excess packaging materials to address the eccentricities of a single product. Having more packaging to choose from can tack on costly seconds to the time it takes to get an order out the door, and compounds the labor training and compliance challenges already present in many operations.
All those new products and all those additional packaging supplies also take up a hefty amount of square footage inside inventory fulfillment facilities, which are growing more valuable and more scarce by the day with warehouse availability rates at 15-year lows and demand outpacing supply 2 to 1.
Not enough space, not enough labor, too many packaging options, too many product SKUs – what can businesses do to get a little bit of breathing room?
Most companies start the process by trying to streamline the packaging options (simplifying carton mix, trying to find a one-size-fits-all box) and adding labor resources to cover the churn of turnover rates and keep production levels steady.
What most don’t realize is that one-size-fits-all boxes are an enormous source of excess waste (too much void-fill material), increased damage (not enough protection for the item inside), and a drain on productivity (each box can take up to 60 seconds on average to assemble, fill, and seal).
What businesses need instead are multi-use products such as Sealed Air’s NewAir I.B.® Flex™ or Fill-Air Rocket™ that are simple to use and can tackle everything from void fill to heavy-duty cushioning as well as reduce packaging SKUs.
Compact footprint packaging solutions that are shipped flat, stored flat, and inflated on demand don’t require rows and rows of inventory shelving to store or take up floor space in the packing area.
Inflatable packaging materials, which reduce the size of packages without sacrificing protection and flex to fit and shield an infinite variety of orders, can:
- Reduce warehouse storage space by as much as 75%
- Reduce the amount of material needed in each box by 50% without increasing the risk of damage
A little air goes a long way toward opening up valuable warehouse space and helping operations leaders breathe a sigh of relief that they can keep labor processes efficient and easy to execute, no matter how many new SKUs have to be managed.
Recent study shows that 66% of warehouses plan to expand technology investments by 2018: https://www.tradegecko.com/blog/recent-study-shows-66-warehouses-plan-expand-technology-investments-2018
Too many malls – Not enough warehouses: What does this mean for retail: https://sealedair.com/blog/too-many-malls-not-enough-warehouses-what-does-mean-retailers
John Wolf is Sealed Air‘s Global Vice President of Marketing.