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Optimization and Sustainability—A Winning Combination

By: Pat Smorch
Posted: March 3, 2010, from the March 2010 issue of GCI Magazine.

People have been developing better, smarter ways to improve efficiencies and save time and money in the supply chain for as long as goods and products have been bought and sold. It seems there are always more inventive ways to improve efficiencies. The most significant breakthroughs in supply chain optimization came with the advent of advanced computing technology and have evolved dramatically in the past 25 years. And now, executives can break down every level of the manufacturing, processing and transportation of goods to find ways to reduce supply chain costs, improve margins, lower inventories, increase manufacturing throughput and increase their overall return on investment (ROI). Sustainability issues have also recently been introduced into the mix, adding another wrinkle to an already complicated list of measurable concerns.

Just as optimizing the supply chain is about saving money, so is creating more sustainable processes. As much as eco-friendly practices send a positive corporate message, they can also improve efficiency and profitability.

Examples of the synergies between cost savings, process efficiency and sustainable practices are everywhere. From improved package designs that save on gas or refrigeration costs to advanced corporate programs that play on their energy efficient green building designs or commitments to using wind energy and other green alternatives for large percentages of operating costs, sustainability can help a business from top to bottom, helping grow new business, save costs and retain market share with increasingly sustainability-conscious consumers.

Packaging systems optimization programs were developed with just these synergies in mind. At the heart of one such program is the intention to provide companies with new ways to streamline operations and reduce total systems costs. The program hones in on efficiency and waste reduction throughout the supply chain and maps out sustainable fixes that improve the bottom line. Everything from material optimization and package design to material handling and distribution are analyzed.

Less is More

Companies are on a constant hunt to build more with less, but some of the biggest advancements in recent years have come from developing ways for companies to do more with the material they already have. From developing new package designs and reengineering old ones to creating the same package shapes with less material, this trend can be seen in virtually every consumer packaged good company. Creating new shapes in juice bottles that save material but don’t sacrifice filling volume is just one example. The new milk container available in Sam’s Club that is square-shaped and caseless is another example. Even label makers are getting into the game. Eastman Chemical’s newest shrink labels can be made with 20% less material than traditional labels of the past. Part of Georgia-Pacific’s contribution to this area of study is creating corrugated boxes that have reduced fiber content, saving material costs and reducing package weight while maintaining strength and support.

Increase Serving Size; Increase Sales