Streamlining packaging strategies makes for a ship-shape distribution experience.
When you’re a national additives manufacturer*, you ship a lot of product. Efficiency and cost-effectiveness is a must, as is ensuring that shipments are sent in a timely manner.
But when your staff members are already stretched to their maximum, partnering with a packaging distributor that can build an innovative, process-oriented packaging strategy based on your company’s current needs and future goals is key. Shipping, after all, is not a one-size-fits-all business. Box materials, tape, postage—they are all often-overlooked components of packaging and can result in the shipper incurring extra expenditures.
Millcraft, a 96-year-old independent distributor of paper and packaging, worked with the additives manufacturer to understand all of the costs—and inefficiencies—that factored into the company’s shipping process. From there, a true partnership was born.
The national additives manufacturer had been using multiple vendors to handle its corrugated shipping supply needs. Because some of the materials vendors had difficulty keeping up with demand—occasionally prompting trickle-down plant closures for the customer—partnering with reliable corrugated packaging vendors was vitally important to the manufacturer.
Additionally, the manufacturer was handling inventory management tasks (such as the ordering and storing of corrugated packaging materials) in-house, which required time, careful monitoring, and another layer of labor resources.
The manufacturer concluded that consolidating packaging vendors would be the best approach to managing such an important aspect of its business. That way, it would have fewer points of vendor contact and could redirect its manpower toward its core business competencies.
The additives manufacturer has a robust business and an extensive product line. Managing its own corrugated packaging inventory was taking time away from employees who didn’t have time to spare. In fact, sometimes staff members would get so busy with core tasks that packaging inventory would dip to critical levels that would go unnoticed until it was too late. Product buyers were not notified of possible shipping interruptions in a timely manner, and shipping materials were not on hand when needed.
Further, the corrugated packaging materials took up valuable space on the manufacturer’s warehouse floor and became susceptible to damage and mishandling. Sourcing from multiple vendors meant multiple ordering schedules, multiple deliveries, and multiple contacts.
Millcraft was able to offer the additives manufacturer an inventory management program that removes the manufacturer from day-to-day inventory operations but still allows it to have complete authority over its packaging decisions. Through this program, Millcraft ensures that the manufacturer has a 30- to 90-day supply of corrugated inventory on hand, using the minimum/maximum threshold rule to keep inventory replenished. This means that when Millcraft-monitored inventory levels dip to the manufacturer’s minimum, Millcraft orders enough to return the levels to the manufacturer’s preferred maximum.
The program also features a singular point of contact, an expert who takes care of all corrugated packaging matters. The program manager tracks buying habits and reports to the manufacturer’s purchasing department when there are opportunities for additional savings through vendor sourcing or size changes.
With the new inventory management program in place, the additives manufacturer can now redirect its manpower to core competencies, assured that its corrugated packaging materials are being monitored and properly allocated.
In addition, process simplification is a huge win. And because Millcraft is able to supply various products to the manufacturer with one delivery and one invoice, efficiency reigns.
Where once the client had to order from three separate vendors, schedule three deliveries, cut three POs, unload three trucks, and issue three checks, now they only need to handle one.
Indeed, Millcraft’s process-oriented inventory management approach—versus a simply transactional approach—led to a greater understanding of the client’s needs and challenges. The result? A program that can grow with the customer, allowing for a cleaned-up cash flow, fewer layers of manpower resources, and tremendous opportunities for continued savings.
By Liberty Kontranowski
*In this case study, Millcraft’s client’s name has been removed due to the sensitive nature of its business.