Scalize CEO talks digital action against transport costs and optimizing value chain efficiency

25 Aug 2023 --- The impact of product transportation on the environment and economy has largely been overlooked until today, according to Robert Hughes, CEO at Scalize. When optimizing packaging, the industry has been focusing on improving recyclability and using recycled content to achieve circularity. 

With digital tools like Scalize, it is possible to identify opportunities and how they can support existing brand and retail project activities and their environmental sustainability targets. Brands and retailers can now calculate and implement a reduction in scope 3 emissions from transport via Scalize – a software as a service (SaaS) web application.

Packaging Insights sits down with Hughes to evaluate the challenges for packaging optimization, how Scalize can help customers overcome these and how optimization demands might change in the future.

What can you tell about Scalize? 
Hughes: Scalize supports packaging development decisions and improves existing product assortments, focusing on reducing the number of pallets in logistics, saving 10-20% of emissions and costs from transport. 

Brands and retailers can automate the analysis and optimization of their packaging to identify and report small adjustments that R&D can implement with their stakeholders. Our aim is to help identify more holistic optimization for sustainability and cost, as the cost savings from transport can be of equal value to that of other activities such as material reduction. This helps the business case for improved circularity when investing in switching to post-consumer recycled material and making packaging more recyclable.Packaging optimization on Scalize.

What are the greatest challenges to packaging optimization and how can they be tackled?
Hughes: Packaging needs to be optimized in many aspects, including product shelf life, consumer experience, circularity and logistics. 

The challenge is connecting all the relevant data in digital tools that can enable better packaging decisions for the whole value chain. Development is a linear process, and it isn’t possible with existing tools to analyze and simulate all potential scenarios and tolerances from the packaging supplier through to the retail shelf when decisions are made regarding the packaging design, size or the number of units per shipping box. 

New tools are needed to scale value chain data easily and connect and automate several analyses that would otherwise be separated in the development process and between stakeholders. The results reported need to be both holistic and actionable for stakeholder decisions and include the details required for implementation.

How is Scalize optimizing packaging? 
Hughes: Scalize optimizes primary and secondary packaging to increase the number of units shipped per pallet and improve handling and use of shelf space at the retailer. 

Packaging dimensions, weight, shipping box configurations and constructions, production speed, palletization and the product facing on shelf are optimized for improvements against category and competitor benchmarks. Hundreds of products can be analyzed in parallel to simulate scenarios of small adjustments to the pallet schemes or heights, the shipping boxes and even the primary packaging. 

This is done at the click of a button by uploading an excel file of existing data.Assortment analysis for packaging optimization.

How does Scalize compare to other, similar existing tools?
Hughes: Existing tools split the analysis of shelf and pallet and require manual input of product data by an expert, saving the output and repeating the input for each scenario they wish to compare, also for any update to the data during discussions with stakeholders. This is why, from analyzing thousands of the current products on shelves in drug stores and supermarkets, we see that small adjustments would lead to 10-20% less pallets in transport for most product formats and sizes. Whether brands or retailers assume everything is optimized or such improvements have been identified and discussed, existing tools can’t report the holistic impact and in the end, emissions and cost savings are not captured.

With existing tools, the potential improvement is often measured in wasted area and height utilization on the pallet itself, seen as air gaps around boxes. But we have seen many examples of pallets that look “full” and over 90% utilized that can benefit from up to 40% more units per pallet when reducing air within the shipping box, changing the number of units or configuration within the box or millimeter adjustments to primary or secondary packaging. Scalize solves this with automation of the analysis, connecting requirements along the entire value chain and a dashboard of the output for stakeholders to make decisions and update the data. 

For brands and retailers using reuse shipping boxes such as the GS1 Smartbox, generally, more pallets and transport are required due to the lower number of units shipped per pallet. Scalize can identify which products would best suit these reuse boxes and optimizations to reduce transport emissions.

What will be most important to focus on regarding optimizing packaging in the future? Are customer preferences changing?
Hughes: A current focus for many brands is material reduction, such as lightweighting primary packaging formats where possible, for example, oversized closures and bottles, which, when also optimized in Scalize, can double the potential cost savings and reduce emissions further. 

Customers consider their consumption more than in the past due to higher prices and more focus on product sustainability. Optimizing product value and sustainability will mean reducing costs and waste. This should mean significant improvements to existing product and reuse concepts that reduce the impact of packaging even further. We believe that the retail shelf will evolve with more efficient packaging designs regarding material especially, having helped brands identify millimeter reductions in packaging size that have led to 20% less transport.

By Natalie Schwertheim