This article is part of our series of strategies to reduce packaging costs throughout your supply chain. Want the full set? Download our guide with all 30 strategies.
Throughout your packaging supply chain, there are many potential interruptions that can delay on-time delivery. From material shortages and customs congestion to natural disasters and pandemics, unpredictable disruptions can create costly delays, leaving you scrambling to find a plan B.
If you make a backup plan while your supply chain is healthy, you're more flexible if you need to reallocate production at the last minute. With backup factories and products, a more resilient supply chain could save you weeks of downtime, and thousands of dollars.
Set up backup factories and load balancing
In cloud computing, the term "load balancing" refers to the process of distributing incoming network requests across multiple servers. This process is also key for setting up a supply chain with redundant manufacturing across a distributed network, giving you the power to relocate production quickly, should disruptions arise.
Even in an un-disrupted state, using load balanced manufacturing can help reduce freight costs by sourcing factories as close as possible to your distribution centers.
Let's say you have distribution centers on the east coast and the west coast. One way to load balance your box manufacturing would be to split manufacturing across two factories — one in each region.
One way that the Lumi platform enables load balancing is through consistent, structured specs. It's easy to move a project from factory to factory when pre-production is expedited through consistent data.
With all of your packaging streamlined through specifications in Lumi, it’s simple to quote existing items across multiple factories and bypass supply chain disruptions before they’re detrimental.
Plan alternative packaging
Backup factories can't always steer you away from supply chain disruptions. If your business relies on packaging or materials that can’t be produced affordably within your region or have a very limited set of production locations, you may find yourself in a bind if something disrupts your supply chain.
For example, some companies rely heavily on poly mailers which are produced in Asia at a fraction of the cost as they are in the US. If disruptions occur such as COVID-19, trade wars, or port strikes, it's ideal to have a locally made alternative to fall back on. In this case, paper mailers are a great alternative.
If you're using more specialized materials like mycelium foam or algae ink, there may just be a few factories that produce them, limiting your pool of backup factory options. This is another case for having a backup product in mind, preferably one with wide availability.
Disruptions happen, and distributing your packaging production is a smart way to plan for the unexpected.
