Welcome to week three of, “How to cut costs and maximize profit in the New Year.” Let’s start with a question:  How important is profit to your company?  The ability to keep the doors open depends on your ability to create profit.  Not only is being profitable important, it allows organizations options to produce additional growth.  Investing in new equipment and launching new products is dependent on the ability to create profit.

A quick look back…
To summarize where we have been in this series…in week one, we reviewed ways to design your packaging to increase profits.  In week two, we covered how being sustainable can increase profits.  This week we are going to focus on how planning can either increase or take away profit.

Plan-Plan-Plan
Regardless of what industry you are in, the same goes for all…poor planning will contribute to increased costs.  The better planner you are, the more you can eliminate added costs.  How orders are placed, how packaging is designed, and how much time is allowed to complete projects are all examples of areas planning is important.

Example:

In the year 2013, company ABC plans on launching five new products.  They are similar in size and shape, but do have features that make them different.  The method of packaging will be a clamshell with an insert card. 

Poor planning: Create five different clamshells to custom fit each product.

Good planning:  Create one clamshell that can hold all five different products.  (If needed, create a smaller insert tray to better hold the product in place.)

Result:  The “Good planning” example will have the same packaging for all five parts.  Since the packaging is similar for all five, the quantities will be more, which will allow for better pricing and will result in one part number being used over five parts.  The insert cards will be a common die line which will result in better pricing for printing.  Also, it will reduce the chance for obsolescence packaging costs.

There are several examples similar to the one above that can lead to increased costs due to poor planning.  The goal is to work with suppliers that can identify these areas and help reduce your costs resulting in increased profits.  Sometimes, identifying these areas can be difficult, so it is important to partner with those who have a track record of reducing costs while increasing the value of your packaging.  Create profit in 2013 and do it by being good planners!

For questions or for more information on how you can increase profits in the coming year, contact Brian Pankratz at Mercury Plastics, Inc.  bpankratz@mercuryplasticsinc.com.

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