You can learn something new every day if you pay attention to the little things. In the case of shipping, logistics, and warehouse management, these small details could translate into big savings and major environmentally friendly efficiencies.
I realize I may be preaching to the choir with this topic, but I thought a conversation that started in another post last week about the advantages of “cubing optimization” was worth continuing. At the very least, I found it intriguing enough to want to pass along to the broader EBN community and request some brain-swapping commentary so I can learn more.
Cubing optimization, as far as I can tell (there is not as much information or as many case study examples out there as I initially expected), is a logistics approach involving automating the way boxes, packages, cargo, and pallets are measured and weighed. While the weight of a package — and mode of transportation — affects shipping prices, the package's dimensions (height, length, and width) also factor into the cost. As many of you know, there is often a noticeable price difference between the weight price and the dimensional price, and those differences feed straight up to the operating budget.
Besides giving companies additional insight into total landed costs calculations, logistics departments can use cubing's dimensional data to strategically evaluate shipping and transportation options, improve efforts to maximize truck or boat container loads, and assess full-load shipments vs. gasoline use. A host of other possible uses and benefits are outlined in a report from DC Velocity titled “10 ways to boost DC performance with cubing/weighing systems.”
I'm under the impression that some of this automated measurement software may already be embedded in warehouse management systems or that cubing system device manufacturers (such as Quantronix Inc.) provide software that can be integrated with WMS, ERP, or other business intelligence interfaces. Either way, what I find interesting is the significant impact accurate dimensional data could have on a company's spending, materials management strategy, and carbon footprint.
Short of having many high-tech examples to draw from (here are a couple from the grocery and publishing industries), I'll mention what EBN follower, Dave Sasson, shared in response to a post about green supply chain trends. There, I mentioned one of the key trends Gartner sees in an industry-wide push to better manage costs and green initiatives in the wake of sharp increases in oil, fuel, electricity, and gas prices. (See: 9 Key Trends in Green Supply Chain.)
Sasson shared the following improvements his company has witnessed as a result of using cubing optimization software, particularly in terms of fuel use:
- For the first 5 months on implementation [in 2007], compared to the same period in 2006, the results were 18,100 fewer trucks on the road. This added up to 909,000 fewer miles driven with 151,015 fewer gallons of diesel fuel consumed and a reduction of 3.4 million pounds of carbon dioxide. The cost savings were in the millions of dollars and continue to be a major positive impact to the business, not only in profits, but on their carbon footprint.
Wow! Bells went off in my head after reading this. First, if companies had a very precise way of knowing exactly how dimensions of packages influenced overall material management cost, they could refine their shipping practices, optimize load scenarios, and reduce spending. Going further (and maybe this is a leap), if this data were integrated with other important systems being used within the design, supply chain, and even marketing teams, companies could make more informed decisions early on in the product development stage; they could analyze alternative packaging possibilities, reconfigure postponement strategies, and maybe even become a greener supply chain partner via smarter shipment tracking and truer pricing data.
If you're interested in seeing how this works, here are a couple of videos. I'm not endorsing any of the products cited here, but offer them up as educational references.
I'm looking forward to hearing how the EBN community weighs in on this (pun intended). My gut tells me it's likely an understated part of the logistic process, but a practice that may warrant a second look. Is your company cubing? What have you learned? How are you using your shipping and cubing information to be a greener supply chain partner?