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Leveraging Logistics to Cut Supply Chain Clutter

One area where design and supply chain touch is logistics. Design of both product and packaging directly impacts the packing, shipping, and return handling of both components and end-products along the supply chain. “Almost everyone recognizes there is a big value stream related to packaging and solid business reasons for paying attention,” said Benjamin Büscher, managing director at Avnet Logistics GmbH.

By maximizing space utilization in shipping cartons, distributors and OEMs can reduce the use of boxes. Avnet, for example, has reduced the number of carton sizes it uses from as many as 30 to only 11. “Based on dimensions and weight of the products we are packing, we try to optimize the cartonization of those products and ship less filling material to the customer,” said Büscher.

(Source: Avnet)

(Source: Avnet)

Once boxed, the products also have to be optimized on the shipping palettes and, when possible, multiple shipments to the same address are combined to enhance savings further, he said. “There's a fine line between optimizing shipments to the most efficient and green end and, on the other hand, meeting the need to use packaging that meets the needs for traceability, carton quality and the goal of having the customer receive it properly,” he added. “It can take trial and error to find the greenest, cheapest, and highest-quality way.”

For larger customers, using returnable containers is an option. For some OEMs, this approach maximizes their systems. However, it creates work in tracking and storing the containers, so it's generally a better alternative for large customers.

Avnet collaborates with major suppliers to improve upon its packaging and logistics continuously. “This continuous dialog about optimization is the best way to define and test new approaches,” Büscher said. “There is plenty of room for cross-business collaboration, end-to-end, from supplier, to distributor, to OEMs.”

— Hailey Lynne McKeefry, Editor in Chief, EBN Circle me on Google+ Follow me on Twitter Visit my LinkedIn page Friend me on Facebook

This article originally appeared in the Avnet Velocity e-magazine, The Sustainability Balancing Act.

2 comments on “Leveraging Logistics to Cut Supply Chain Clutter

  1. SP
    June 21, 2014

    Returnable cartons is a very good option from enviornment point of view and from cost reduction perspective.Normally when the shipment is received there are lots of cartons material and packaging material, if that can be returned and reused it is just great for both the parties.

  2. Hailey Lynne McKeefry
    June 23, 2014

    @SP, resusable and returnable cartons and pallettes both have their place. However, losticially it's complex which means that often distributors offer it as an option only to big key customers. I find myself wondering what smaller organizatoins can do.

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