Packaging is beginning to affect a greater portion of a company's global operations, according to Tom Blanck, principal and practice leader in the Packaging Optimization Practice of Chainalytics. Improvements in that area "have the opportunity to ripple throughout the supply chain," he says. "They help lower transportation costs, maximize the utilization of a warehouse, affect pallet loads and cut down on labor." Blanck says the rising cost of transportation has caused companies to become more aware of the possibilities of achieving savings through better packaging.

The key is to minimize the amount of air in a package. "The best way to reduce your transportation bill is not to ship something," says Gary Girotti, vice president of Chainalytics' Transportation Practice. For that reason, savings from packaging innovations are usually credited to a company's transportation group. "We work to make sure that [the issue of] overall savings is corporately addressed, so that a company can understand that it's a good thing for all."

Often there's tension within the organization as package designers struggle to achieve the right balance between efficiency and aesthetics. The latter is a subjective skill, while the supply-chain function requires a more "hard-core" approach, Girotti says. But waste is more than an issue of direct costs. Increasingly, companies are factoring in the need for sustainability and environmental responsibility. "Packaging needs to be more green," says Blanck. "Sometimes that drives packaging costs up." Companies need a system that can optimize the entire process, based on all relevant criteria.

Security is another key concern. Often a maker of electronics or other types of consumer goods will encase the item in hard-to-open packaging. But that approach can entail an excessive use of materials, with resulting higher transportation costs. (One possible solution is radio frequency identification technology, which allows for closer monitoring of high-value products.) The same dilemma occurs when packaging is geared toward minimizing damage to goods in transit. The tendency is to over-protect items, with an incomplete understanding of what kind of damage is likely to occur in various modes of transport. Girotti says companies need to understand what they are shipping, and how the product is moving.

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