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Cost reduction model from Packology spears packaging savings

By Lindsey Partos , 16-Apr-2009

Cost reduction in the packaging-driven supply chain is at the core of a savings model designed by UK packaging consultants Packology.

SAVE, a shortcut for Strategic Analysis and Value Engineering, hones in on unit cost savings achievable in the supply chain with results to date averaging about 27 per cent in savings.

"It's about standing back, and looking hard at what you buy and how you buy it," said Packology managing director Robert Herridge.

Confronted by a tougher economic climate, interest by manufacturers, including confectioners, is blossoming for constructive steps they can take to shave costs in packaging.

"Everyone is seeking to reduce costs, and we're working with numerous companies to drive down spending in packaging," Herridge told ConfectioneryNews.com.

He points out that "often the manufacturers are focussing on their product, not the box or the actual transit packaging".

And underlining the fine balance between cost savings and product image, where a firm actually identifies the point to stop taking the cost out is "a common sense approach".

"We could just put the product in a cheap box, but for the image, there is no real purpose," comments Herridge.

Cost savings span 22 to 33 per cent

Applied to large, medium and small businesses, work carried out by Packology suggests the potential for savings can run into double-digit figures.

"For example, we recently achieved a 27 per cent drop in spending for a £500m firm," said the Packology managing director.

He added they have yet to work with a company where cost-savings were not achievable, "anything from 22 per cent to 33 per cent savings", he added.

Prior to launching Packology in 2006, Herridge worked across a range of blue-chip cosmetics and drinks businesses in a number of roles ranging from packaging supply chain management to packaging development.

In 2007, co-managing director Doug Johnston joined the firm, bringing his experience in carton, labelling and corrugated sectors into the mix.

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