BeneShip is the company behind Paccurate, a cartonization engine that's focused on controlling shipping costs. CEO James Malley explains why more companies are using cartonization in 2020.
Automation is perhaps the most popular catch-all technology term. It is, at once, a process improvement paradigm, a sales pamphlet space filler, and mandatory resume decorator. So pervasive is the concept of “automation” in the supply chain technology space, one could be forgiven for mistaking it for a linguistic filler such as “like” or “um.” The problem is not that it’s overused— it’s that Automation for all intents and purposes is just a synonym for technology. After all, what is technology for if not to make the difficult easy? The inefficient, efficient.
So, when we think about streamlining the putting of things in containers to send somewhere, calling it “packing automation” is at best vague, and at worst meaningless. That’s why we use a clumsy word that, while widely accepted in the industry, as of this writing doesn’t exist in any proper dictionaries and causes red squiggly spelling error lines to sprout wherever it is written: Cartonization.
Cartonization has come a long way since the modern supply chain came into being. It was once defined by simple “Rules of Thumb” type lists that attempted to tame the packing process by giving some guidelines to pickers and packers. Think: desperate directives in fading blue ink scrawled on post-it notes throughout the warehouse. If you were lucky, you had a database of these rules that might be accessed before generating pick and pack lists. These days, it refers to complex algorithms and logic engines that take large amounts of data into account before suggesting an optimal way of planning, picking, packing, and shipping an order.
The ability to control shipping costs has long been a focus for supply chain professionals, if not the primary concern. It wasn’t until recently, however, that sophisticated cartonization technology was employed by any but the largest shippers. In a recent interview with Chainalytics packaging and supply chain expert, Kyle Ous, stated: “There is no such thing as free shipping in the eCommerce supply chain. The closer to cubing out your parcel packaging system, the better off you will be from a shipping cost perspective, perhaps now more than ever.”
That’s why, after waves of process innovations have washed over the industry during the past decade, at long last Automation adherents have set their sights on the most basic of fulfillment concerns: the humble box.
When deployed tactically throughout your organization, a quality cartonization engine can and should be able to achieve any or all of the following in your Order to Cash, or Procure to Pay process:
Provide more accurate shipping estimates and visibility
When used up front in the order lifecycle, cartonization algorithms can help give shippers a preview of what their costs will be before an order is even sent to the warehouse. Additionally, providing more accurate shipping estimates can greatly reduce shopping cart abandonment.
Reduce shipping costs
Dimensional weight fees on low-density cartons are often the first things a supply chain manager identifies as both incredibly annoying and likely fixable with better packing. But optimizing packing for cost can take shippers down a rabbit hole of surprising depth and breadth. For example, the cheapest packing configuration for one carrier may not be the same for another. Perhaps worse, even for a single carrier the cheapest way of packing an order may change depending on how far an order is being shipped, due to the way carrier rate tables are structured. The Cover Store, an online retailer of protective covers for outdoor furniture, recently implemented cartonization to accommodate increased demand and account for these rate table quirks in real time. “Realizing these savings manually is frankly impractical,” they recently said. “The algorithms make a big difference.”
Increase warehouse throughput
Even experienced warehouse staff are only human and make mistakes. A well-designed cartonization system can provide comprehensive packing instructions that can help with complex orders or raise the efficiency of new and/or seasonal workers that aren’t yet equipped with tribal knowledge. Lionel, the beloved model train maker founded in 1900, doubles its warehouse staff every year in the fourth quarter to deal with holiday demand. Lionel CIO Rick Gemereth noted, “...besides the reduced shipping and corrugated costs, the packing instructions generated by [our cartonization engine] improved the flow through shipping stations for the temporary help.”
While cartonization is, on its face, not the most exciting strategy toward sustainability, it is one of the most compelling- there is a strong correlation between money saved and positive environmental impact, making it one of the few steps a company can take toward sustainability that doesn’t have a net cost. Instead, shippers can expect reduced shipping spend in addition to lower carbon footprint.
One would think that in 2020, the idea that eCommerce is growing would be old news, or even confusingly mundane. At this point it’s like observing every day, with awe and appreciation, that the sky is blue. It’s worth noting though because the continued and consistent rise of eCom explains why there’s been an explosion of interest in cartonization across all verticals and business sizes in recent years. COVID-19 has only accelerated this interest, as old retail models fail and shippers are forced to adapt and overcome. Cartonization can play an important role in that effort.