How You Can Save Money With an Industrial Packaging Hub

Posted by John Appel on Wed, Apr 27, 2016


If you’re shipping parts and materials from many different vendors, you know the problem well. Assume you have a project or an install across the country, or maybe even on the other side of the world. You have to ship not only your product, but also a large number of additional parts and materials from the many vendors you work with.

The vendors deliver those parts to your facility, presumably packaged for shipment to the project location. There’s a problem, though. The vendor’s packaging doesn’t meet your high quality standards. Or perhaps some of the parts need to be bundled in the same package when the shipment reaches the final location.

Now your team has to unpackage the parts and materials and repackage them for shipment. You’ve duplicated efforts and wasted time. You’ve also paid the vendor for packaging services that ultimately aren’t being used.

This process is inefficient and wasteful. Yet it’s the very same process that is deployed by many industrial companies all over the world. Often in large-scale industrial projects, one of the biggest challenges is managing the inflow of parts and materials. If you can master that process, you can boost your efficiency, save time, and cut costs.


The industrial packaging hub

HubSome of the world’s largest industrial companies are conquering this common dilemma by using an innovative new solution: the industrial packaging hub. An industrial packaging hub is a strategically placed facility where all of your vendors deliver their materials and products. Those materials and products are then repackaged for delivery to their final destination and shipped from the hub. 

For example, let’s go back to the original scenario, where parts and materials are being shipped across the country, or even around the world. The hub would ideally be located within a one-day drive of most of your vendors. Your vendors could then minimally package their materials and products for delivery to the hub.

When the materials arrive at your hub, the minimal packaging is removed and the products are then packaged to your standards. They’re then warehoused in the hub until you’re ready to ship.


Why use an industrial packaging hub?

There are a few reasons why an industrial packaging hub makes sense. The first, and perhaps most compelling, is cost. When your vendors provide the packaging and then you repackage, you’re paying for a redundant and unnecessary service on the vendor’s end. 

By implementing an industrial packaging hub, you can ask your vendors to reduce their packaging efforts. They only need to package for a short one-day road transport, not a lengthy trip overseas. Only minimal packaging is required.

Hub_ItemYou can use that change in services to negotiate a new price with the vendor. Spread those cost savings across every vendor you work with and you could start to see a substantial impact on margins. In fact, many of the companies that now use this model are seeing enough savings to finance the hub and still significantly reduce costs.

The other major benefit is consistency, especially with regard to packaging. When all of the final packaging is done in the hub, you can be confident that the parts and materials are being packaged to your standards.

After all, it’s your team that’s doing the final packaging, not the vendor’s. Your team is well-trained on your needs and quality standards. Whether you’re using internal team members or an outside packaging partner, the packaging hub team should be able to meet your standards more consistently than an array of dozens or even hundreds of vendors.

If you’re managing industrial projects that require parts and materials from many different vendors, an industrial packaging hub could be an effective solution for you. Consider implementing a packaging hub to improve your quality, boost efficiency, and most importantly, save money.

Download Siemens Case Study

Topics: Industrial Packaging Hub

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