Depending on your industry, inventory can add up to at least 30 percent in your organization’s assets. And packaging makes up a huge portion of this amount. Inventory issues represent waste. As a business owner, you must take a fresh look at your financial approach to measuring and managing packaging inventory and overcome inventory issues, especially deadstock.
Common Reasons Product Packaging Gets Stored and Unused
Excess inventory can get stored for a long time because of the following reasons:
- Ordering too much, too soon. In Ecommerce, products tend to sell fast. In fact, they can sell at the click of the button. Most companies order packaging material in huge quantities to keep up with the pace of demand and prevent any stock-outs. However, you can avoid this overstocking by considering box inventory storage This means working with your box manufacturer that will also offer you storage space for your packaging inventory.
- Decreasing product demand. The demand might fall for some products despite sudden changes in shopping trends. But, companies usually do not have accurate data to forecast product demands. As a result, they tend to stockpile packaging material for products that are not moving fast.
- Packaging design changes. Product design changes are often performed to portray products in a more attractive way. For example, companies might create new packaging designs to align their products with a new marketing campaign. But, this results in the packaging material stock redundant.
How to Optimize Packaging Material Supply
To reduce packaging waste as its roots, companies must consider digital auto-replenishment. This process involves determining the consumption of the packaging inventory, considering the data, and ensuring there is supply available. Monitoring consumption is done in real-time by tracking the stock levels. Aside from reducing the risk of aging inventory and eventual waste, this approach lends transparency into the process and provides companies with visibility on the rate of their obsolete inventory.
The digitization process does not have to be done in-house. There are established companies that offer this service. In fact, these companies can be box manufacturers themselves. By working with one of these companies, you don’t have to worry about filling your warehouse with unused materials or stockpiling packaging materials because they manage your inventory for you. The overhead costs of storing and maintaining the aging packaging tend to add up well. With their services, you can reduce old packaging inventory and make your company greener. Also, you can minimize inventory carrying costs by up to 80%.