Have you noticed that laundry detergent bottles have gotten smaller, and the only type of detergent on store shelves these days is "ultra concentrated"? You can thank logisticians for that, says packaging expert Jack Ampuja of the consulting firm Supply Chain Optimizers. Although the "downsizing" may have started with Wal-Mart's 2005 packaging-reduction initiative, the movement really took off when companies realized how much they were saving on logistics and transportation costs, Ampuja said in a presentation at the recent SCOPE West supply chain conference in Las Vegas.
By taking most of the water out of the detergent, manufacturers were able to reduce the bottle size by nearly half. That cut down on the amount of plastic, of course, but it also greatly reduced the weight and volume of each bottle. Now it takes half the number of truckloads to ship the same number of bottles to retailers. Compared to their predecessors, the new bottles take up significantly less space in a warehouse or DC, and many more can fit on a pallet. The annual savings in transportation and logistics costs for retailers is believed to be in the tens of millions of dollars.
Ampuja expects to see more consumer products manufacturers follow suit and start trimming other types of packaging. Although they'll likely do so for environmental reasons, he says, most of the cost savings will come from transportation and logistics.