Retailer reimagines packaging and improves handling standards
When an organization determines its packaging strategy, it considers what materials and designs will best protect its products. It also considers how products will be processed and handled throughout the supply chain.
To improve productivity and mitigate product damage, a home goods retailer engaged NTT DATA’s packaging optimization team. NTT DATA helped the retailer create packaging design standards, adjust operational procedures and educate its global vendors.
Business Needs
The retailer experienced three years of rapid growth, and its distribution centers were relocated to accommodate the higher volumes. The operations team relied on an automated conveyor system to speed sorting for outbound distribution and product categories, but the functional requirements to move through the system weren’t well defined. The high rate of manual sorting impacted secondary labor costs.
Outcomes
- Increases value across supply chain
- Lowers overall supply chain costs
- Improves efficiencies in day-to-day operations
The retailer increased value across its supply chain and improved efficiencies in its day-to-day operations while lowering overall supply chain costs.
Solution
NTT DATA conducted site visits to identify the cause of cost increases. After an assessment, the team realized a large part of the problem stemmed from a weak vendor compliance program with minimal emphasis on packaging and item categorization. The NTT DATA team worked with the retailer’s internal stakeholders to identify and define categories that required classification as “non-conveyable” for the distribution centers. These products require additional handling due to size, fragility or packaging material types.
To streamline inbound operations, NTT DATA created standards, identified non-compliant products and packaging and trained frontline staff to handle non-conveyable products. These adjustments allowed the organization to hold suppliers accountable for adherence to the new packaging standards. Product appendices helped departments identify strength requirements, use International Safe Transit Association (ISTA) testing guidelines and reallocate inbound items within the distribution center.
The new packaging guidelines included strength requirements, product protection factors, preliminary testing methods and process outlines to make sure suppliers understood how to minimize damage while increasing distribution efficiency. After the implementation, the retailer reduced secondary labor costs by more than 15%, increased value across its supply chain, improved efficiencies in its day-to-day operations and lowered overall supply chain costs.
About the case study
A leading home goods provider reduced costs and improves efficiencies with new packaging standards and guidelines.