Warehouse - United Kingdom Warehousing Association

40 Cover StoryReducing costs andprotecting your profitMacfarlane Packaging’s in-house dedicated 3PL packaging experts are responsible for creating packagingsolutions that address every aspect of the Supply Chain to meet the customer’s individual needs,while focussing on taking out costPackaging can feature quite far down onmany business agendas and is often thoughtof as a low-value commodity rather than abespoke service designed to add value, enhancecustomer experience, increase efficiency and,above all, reduce costs.There is a lot more to packaging than justcardboard boxes and packing tape. Althoughtransit packaging plays a vital role in protectinggoods to ensure that they arrive in good condition,packaging is evolving into an influential sector thatcan not only protect your profits, but increase savingsacross your Supply Chain. It is becomingever more important to step back and calculatethe total cost of your packing operation and considerwhat your packaging needs really are.Rachel Fellows, 3PL Director at MacfarlanePackaging, the UK’s largest packaging distributor,says: “At Macfarlane Packaging, we recognise themain drivers for logistics providers. Our in-housededicated 3PL packaging experts are responsiblefor creating packaging solutions that addressevery aspect of the Supply Chain to meet the customer’sindividual needs, while focussing on takingout cost. Our packaging projects incorporatethe reduction of working capital, better utilisationof warehouse space and maximising work forceefficiency by increasing throughput and output.Our approach certainly isn’t just the supply of cartonsand tape!”According to Fellows, this can only be achievedthrough a proactive approach by spending timeon the shop floor of a customer’s packing operationand working closely with pickers, packers,logistics and transport teams to review the SupplyChain. This evaluation even extends to vendorsdelivering into 3PL sites and the product despatchprocess. However, this is not a one-off evaluation.It is an on-going process, which requires reactingto and anticipating the ever changing needs ofcustomers, alongside developments in packagingdesigns and systems.Recent industry surveys identified one of thebiggest challenges within the Logistics and SupplyChain sector is the need to control costs. As we allknow, this is becoming more difficult with risingfuel prices impacting on transport costs and theincreasing price of raw materials pushing up thecost per unit. It is clear that the whole SupplyChain is being pushed to the limit, to not only protectexisting profits, but also increase profits wherepossible through extensive cost saving measures.Although fuel and raw material price rises are outwith the control of the 3PL provider and a sign ofvolatile economies, it is difficult to pass higherprices onto the consumer. So, there is only oneoption- cost cutting.Many companies are already reducing theirfixed costs by restructuring, but operations shouldnot underestimate the importance of packagingwithin their Supply Chain. Macfarlane Packagingunderstand the specialist needs of the 3PL sectorand recognise that in this market it is not enoughto merely cut the price of an item. MacfarlanePackaging utilises their warehouse space aroundthe UK through stockholding agreements to counteractspace limitations and storage costs that customersare experiencing. This can help to combatvolatile price increases as stock can be purchasedmonths in advance and called off when necessary.Thereby minimising the amount of increases experiencedon any one SKU.Overpackaging is also an issue thatMacfarlane Packaging aims to resolve, particularlywithin the E-fulfilment sector, by designing innovativepackaging solutions to minimise the amountof transit packaging without compromising onprotection. Reducing packaging not only lowersFebruary 2012www.ukwa.org.uk