The client, one of the global leaders in glass container packaging wants to optimise packaging and engineering spares and stores costs at its US operations. Although the top line for the US operations has shown growth, the company’s higher operating cost is hampering the profitability of the company.
UC Strategy analysed and operationalised opportunities to reduce the packaging cost through measures like:
- Alternate sourcing – Conducted diligence and identified two new vendors for key packaging material
- Standardisation of Packaging Dimension – Reduced 62 carton SKU (20%), resulting in order aggregation
- Optimising Packaging Material Specification
- Standardised all chipboard partitions from 0.03 to 0.024
- Replaced vat lined material to plain chipboard material
- Standardised all corrugated partitions to 150C material and all trays to 125B material
- Replaced new pallets with re-manufactured pallets
- Reduced material consumption – Altered packaging design for trays and top cap
- UC Strategy identified cost optimisation opportunities for engineering spares and stores items through sourcing from India.
The client realised annual savings of USD 1.1 million on a total packaging material purchase of USD 6million and an estimated savings of USD 0.2 million on a total engineering spares and stores item purchase of USD 2.17 million.