As part of the decision taken by Rawlplug in 2011 to overhaul its approach to packaging, we sought to address the way we procure, store and transport the packaging used for Rawlplug products.
Type and number of packaging models
Prior to the audit of Rawlplug’s packaging operations in 2011, the company was using a high number of packaging models and types across its different brands. This lack of standardisation across the group resulted in inefficiencies in logistics operations (i.e. difficulty in achieving optimal utilisation of pallets and transport loads), inability to extract maximum value from suppliers and missed opportunities to create a stronger brand.
One of the first – and most visible – actions to emerge from this audit was a dramatic reduction in the number of types and models of packaging used across the Rawlplug group of companies.
Prior to the audit in 2009, across the Rawlplug group of companies and its brands, a total of 152 different types of packaging (individual product packages, multiple-unit packaging, etc.) were being used. Today, this number has been reduced to 71 in 2015. This increases standardisation across Rawlplug’s different brands, enhances the overall visual identity, and allows packaging and logistics operations to be performed more efficiently.
Collaboration with partners
One of the main decisions made was to consolidate the number of packaging suppliers and strengthen our relationship with a select few vendors.
One of the key actions in this area was to create arrangements with suppliers whereby 80% of packaging orders are already complete and are simply awaiting request from Rawlplug’s (or one of its subsidiary companies’) Procurement Planning or Procurement departments. This resulted in the following benefits:
- Fewer orders and less money spent on packaging. For example, between 2013 and 2014, Rawlplug and its subsidiaries were able to reduce the volume of packaging ordered by approximately one-third and the total value of orders by around one-fifth.
- Fewer orders but higher values on individual orders improves buying position and results in more-efficient use of the machinery used in packaging production.
- This reduction in order volumes, number of orders and value of orders results in fewer invoices, improved cash flow and fewer resources devoted to order and vendor management.
- Rawlplug is able to call upon packaging as and when required, meaning shorter lead times between request and delivery, and reduced reliance on Rawlplug’s storage capabilities. This affords Rawlplug greater flexibility and enables the company to maximise its resources (e.g. financial liquidity and warehouse capacity) at any given time. As an example, previously Rawlplug held a stock of six weeks worth of packaging requirements. As a result of the change in process, this was brought down to two weeks’ worth of packaging requirements (i.e. to cover existing orders). This meant a reduction in stock of around 520 pallets’ worth of packaging and space.
- Lower packaging stock levels mean reduced risk of damage and financial loss, and reduced efforts required for monitoring inventory.
Rawlplug has created arrangements with its packaging suppliers whereby they have established warehouse presences close to Rawlplug production facilities. Combined with shorter lead times and the desire to keep lower (but faster-moving) stocks of packaging at Rawlplug facilities, suppliers deliver packaging more frequently but each delivery travels a shorter distance. Overall, this results in a reduction in the volume of CO2 emissions and a reduced impact on the environment.