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Packaging standardization and cost-cutting

Variety might be the spice of life, but it can be a challenge for standardization and cost-cutting.

Packaging can be a brand-builder and a differentiator; in short, a source of competitive advantage. Such prowess does not change the fact that the demand for packaging is derived from the demand for the contained product. That makes packaging an expense and forever subject to cost-cutting. Standardizing on fewer types of packaging is a cost-cutting method, however, its self-suggesting nature can underplay its complexities.

Standardization can pay a variety of dividends. Starting with procurement, there are quantity discounts. Later, on the packaging line, there are fewer needs for equipment changes. Later still, throughout logistics channels, there are efficiencies and cost-savings in transportation, storage, handling, and traceability. There are trade-offs though, for example, increased inventory-carrying costs. Another is slack fill (shipping air). And never to be overlooked is sustainability—for example, when the packaging is oversized.

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