A Dutch bike company, VanMoof, faced a significant problem: a whopping 25% of their bikes arrived damaged at customers’ doorsteps.
In response, VanMoof’s innovative team crafted a genius solution – a packaging makeover that transformed their bike boxes to look like TV boxes. The magic happened when these cleverly disguised packages hit the road. Couriers suddenly treated them with a new level of care, and the result was astonishing: shipping damages dropped by a whopping 80%.
Like VanMoof, many companies have to deal with shipping damage. Whether on the conveyor belt at the production line, at a customer’s doorstep, or anywhere in between. As a result, shipping damages are more frequent than one would think. In fact, over 20% of returns on e-commerce happen because of damaged products. In today’s highly competitive marketplace, where consumer expectations are soaring, businesses must be steadfast in their commitment to deliver products in pristine condition. Damage-free shipping is not a choice, but an imperative for a modern business.
The Importance of Damage-Free Shipping
Safe product transportation offers several crucial benefits for businesses. Firstly, it reduces costs by avoiding product damage, promoting profitability and financial stability. This allows businesses to invest in growth. Products arriving in immaculate condition enhance customer satisfaction, driving repeat business, brand loyalty, positive reviews, and referrals. Perfect deliveries also build a positive brand image, reinforcing trust and professionalism. Moreover, damage free shipping streamlines logistics, ensuring timely deliveries and operational efficiency, creating a positive customer experience, boosting loyalty, sales, and overall success.
The responsibility for damage-free shipping does not rest solely with the logistics department. It begins much earlier in the supply chain, with procurement playing a pivotal role. The choices made in procurement, from selecting suppliers to assessing quality, have a direct impact on whether goods will reach their destination intact.
Strategies for Resilient Shipping
Resilient shipping strategies are essential for maintaining damage-free shipping in your supply chain. These may include:
- Robust Packaging Selection: The first step in preventing damage during shipping is to choose sturdy packaging materials and designs. Procurement teams should work closely with suppliers to choose packaging solutions that provide adequate protection. This may involve selecting materials that are resistant to impact, water, and temperature fluctuations, as well as designing packages that distribute stress and shock effectively.
- Quality Assurance with Technology: Businesses should incorporate stringent quality checks into their procurement strategy. Novel technological solutions are making this easier for organizations. For example, Italian energy supplier Enel has begun conducting quality assurance visits remotely by using smart glasses. This not only serves as an assurance of quality, but widens the pool of potential suppliers for the company.
- Real-Time Monitoring: Leverage modern technology for real-time shipment monitoring. Sensors, GPS, and IoT devices can provide valuable data on the conditions and handling of goods during transit. This information helps in identifying the source of damage and allows for immediate corrective action. Global industry giants such as Volvo have already embraced such technologies. The automobile manufacturer uses IoT supply chain to track its vehicles’ components that come from an intricate web of global suppliers and final vehicle deliveries to its equally global customers.
- Supplier collaboration: Working closely with suppliers to select packaging materials that prioritize product protection is essential. Use IoT to track components from a global network of suppliers and monitor final product deliveries. This technology ensures greater transparency and control over the supply chain, reducing the risk of damage.
Procurement’s Role in Damage Prevention
No matter the technology, building strong partnerships with suppliers remains key to damage prevention. Clear and consistent communication about quality expectations, packaging requirements, and any issues encountered is essential. Collaborative relationships promote mutual understanding and a shared commitment to damage-free shipping.
Procurement teams need to establish and enforce stringent packaging standards that suppliers must adhere to. These standards should align with the company’s damage prevention goals and take into account industry best practices. Compliance should be non-negotiable.
In the quest for damage-free shipping, businesses should also consider the environmental impact of their packaging choices. Sustainable procurement practices, such as using recyclable or biodegradable materials, not only reduce environmental harm but also align with consumers’ growing eco-consciousness.
IKEA is one of the most prominent adopters of sustainable sourcing. The furniture company sources almost half of its wood from sustainable forests. It also applies this philosophy to its cotton requirements, which are fulfilled from organic farms.
Resilient Shipping’s Impact on the Supply Chain
Damage-free shipping enhances supply chain efficiency by reducing disruptions, rework, and waste. This, in turn, leads to cost savings. Market research reports indicate that businesses have lost over six profit margin points solely due to product returns arising from damage in the apply chain. When products flow seamlessly through the supply chain with less need for replacements, repairs, and additional handling, it has a direct impact on the organization’s bottom line.
Furthermore, resilient shipping significantly contributes to improved customer satisfaction and bolsters brand reputation. Satisfied customers become loyal patrons, leading to increased sales and long-term profitability. The intangible value of a strong brand reputation should not be underestimated, as it can set a company apart in a competitive marketplace.
Future Trends and Innovations
As companies continue to optimize their procurement and supply chain, the integration of advanced technologies, such as artificial intelligence and machine learning, to predict and prevent damage is becoming increasingly popular. Predictive analytics are being used to identify potential trouble spots in the supply chain and proactively addressing them. For example, Danish shipping leader Maersk Line uses new age tools to analyze which of its ships are being underutilized, or even wasteful. It then addresses the situation by repositioning containers which saves millions of dollars for the company.
Along with technology, sustainability will continue to be a driving force in the procurement and logistics sectors. Innovations in sustainable packaging materials and designs will not only reduce environmental impact but also improve damage prevention.
Businesses that invest in supply chain resilience will gain a significant competitive advantage. Resilience equips companies to adapt to disruptions and deliver consistent quality, setting them apart in the marketplace.
This article has been authored by Partha Dash, Managing Director, Moglix. All views are personal and do not necessarily reflect those of Logistics Insider.
