Cost-saving tips

Fogel, offers six ways to save money on packaging.

1. Planning design and printing in advance gives you time to weigh-up your options and evaluate new suppliers. But also regularly evaluate alternate suppliers. Look for suppliers who will work with you to identify the cost-saving options that the industry is capable of delivering.

2. Once the development process is complete and specifications are agreed, 80% of the costs are embedded. This leaves only 20% to work on any manufacturing problems. The major cost-saving opportunities therefore occur in the design stage, and a good designer will see a way of creating brand extensions or streamlining your costs, through the use of clever and well thought-out design.
3. Continue looking at cost-saving ideas even when you need them the least. A simple modification to your packaging specifications could lead to substantial cost-savings in the long run.
4. Determine your production volumes annually. Unit costs decrease relative to volume. It’s more expensive to order small quantities, so rather order less frequently and let your suppliers carry the stock, invoicing only when it goes into production.
5. Most food products are perishables, and a stagnant inventory doesn’t improve with age. Excess inventory ties up capital. Hidden costs, such as damaged, lost or redundant stock, warehousing, insurance and financing costs, all eat into the bottom line.
6. Insist on having a service level agreement in place. A simple way to measure supplier performance is based on on-time, in-full and error-free deliveries. By regularly monitoring and managing your suppliers you can maximise the benefits of your sourcing strategy, and increase your profitability.
Fogel: Tel +27-21 788-3535;website: