Missing storage space, increasing raw material expenses, high transportation costs, and environmental concerns. Those are four factors that are difficult to differentiate from the global trading market of today.
In Aabenraa, Denmark, ABENA’s production facility has just finished a successful pallet optimization project. Now, economic and environmental benefits are gained by optimizing product packaging.
In fact, last year, the same amount of products were shipped in 80 fewer containers for one of ABENA’s customers. That saved the customer 4% in the landed cost price.
The challenge: Changing market conditions
Increasing commodity prices and transportation costs combined with a rising demand to mitigate climate change have caused uncertainty for companies that rely on a free flow of goods across the globe.
Many companies depend on innovations and improvements in raw materials, supply, and logistics to lower costs, optimize storage space use, and reduce greenhouse gas emissions from transportation.
Last year, ABENA initiated a project to advance product material combinations and optimize the number of products, parcels, and pallets that are shipped for customers. As part of the project scope, 400 item numbers were assessed.
The solution: Rethinking the supply chain
Simultaneously with introducing a new packaging design, the production of ABENA’s incontinence products was optimized to fit more products into each bag. As a result, more products could fit into a parcel and more parcels could be packed on each pallet.
This means that
- fewer pallets are stored at ABENA’s warehouse, providing more space.
- fewer trucks on the roads as more products could be transported at the same time, saving CO2 emissions.
- cargo ships can carry more products in the same amount of containers, saving CO2 emissions.
- customers need less storage capacity to store the same number of products.
- customers can send fewer trucks on the road to their end-customers, saving CO2 emissions.
- end-customers need less storage space to store the products.
The results: Positive difference in costs and environment
As a result of the pallet optimization project, the annual total transportation costs and environmental impact caused by transportation are reduced. One customer received the same amount of products and the same product mix, now in 80 fewer containers.
- The amount of products in a container is on average improved by 9.97% (based on 40 product items for one customer).
- The amount of products in a container is improved by up to 50% on some item numbers.
- One customer saved 4% on landed costs with the same product mix.
