Optimisation project resulted in annual seven-digit savings


An optimisation project carried out by THIMM together with Hager Group resulted in annual seven-digit savings.

Hager Group is one of the world's leading providers of systems, solutions and services for electrical installations in buildings. The company carried out a branding initiative where the main objective was to create a clear quoting structure and to reinforce the main Hager brand. Following this restructuring of the brand image, several brands of the group were integrated into the Hager offering.
In parallel the packaging ranges used were to be reviewed in order to examine the efficient use of resources. In short, to improve competitiveness, reduce costs, preserve the environment.

Competent methodology ensures objectives are achieved.

The European-wide project was set up in three stages: packaging analysis, design and implementation.
The objective of the analysis was to identify areas with improvement potential and set priorities for the process. THIMM examined nine sites in Germany, France, Italy and Poland. During this process the team of consultants worked according to a clear, standardised approach. This methodology is crucial to achieving the objective.
As part of the survey employees were interviewed from the customer’s purchasing, marketing, sales, production, warehousing and logistics departments. The experts also conducted around 160 interviews with wholesalers and installers. The opinion of the customer was expressly taken into account because packaging impacts the entire logistics chain and not only influences processes within production, but also upstream/downstream areas – from delivery to the installation of components on the construction site.

Quickly identify and optimise cost drivers

Whether the packaging-relevant processes are profitable is contingent on several central cost drivers such as packaging design and handling, volume and surface usage levels, packaging variety, packaging stocks and quality requirements. During the survey Hager Group received a lot of positive feedback but there were also some areas requiring significant attention. For example, the volume utilisation level of some individual packaging types was below 50 percent. The situation for pallet utilisation was similar.
Therefore, the concept phase was developed on the basis of the survey results. And here it was a question of redefining the packaging processes and the packaging standards with a focus on the standardisation of packaging types, their modular structures, material and volume efficiency as well as procurement optimisation. Overall this meant that one third of the total savings could be generated quickly. In parallel, five sub-projects were started which led to the remaining two-thirds of the savings potential being made within twelve months.

Standards reduce complexity and costs

One of these sub-projects was the gradual alignment of the packaging range of the other plants to the already optimised portfolio. The next phase was the harmonisation of packaging data from all the European plants. This involved developing delivery standards and preparing ranges for invitations to tender. This required the establishment of a uniform data capture process which governs the assignment of packaging dimensions and properties, as well as costing information for the defined item numbers. This has resulted in less complexity, reduced purchasing prices and lower costs in the context of the brand relaunch. At the same time this optimised the data basis for the next steps of the project.
A further important step forward was the redesign of a cross-plant, integrated development process for packaging. The development of clear packaging design standards is just as much a focus as the creation of the technical pre-requisites for the creation of packaging specifications. An additional cornerstone here was the definition of processes for packaging tests.

Paving the way for efficient processes

For Hager Group packaging is paving the way for an efficient process both in the plants themselves and with the wholesalers and installers who work with the products. It is also a significant procurement item for the company. Paper-based packaging materials accounted for about 95 percent of the volume.
In the project all packaging types were optimised from commercial and ecological perspectives with the new packaging material now consisting 100 percent of recycled cardboard, achieving a 20 percent reduction in the requirement for cardboard packaging. For example, through the optimised plan-format, the award-winning packaging design (see pictures) saved 300,000 square metres of corrugated cardboard every year. The printed area was also reduced from 60 to ten percent. Furthermore, the brand image is clearer and more self-confident than before.
Another lasting beneficiary after the successful packaging optimisation at Hager Group was the environment.