package cost optimization

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About Us

PCM is a team of experts specialised in the paper, printing, and packaging industry with over 20 years of experience. We have worked in family businesses as well as in medium-sized and large international organisations. We have been able to actively broaden our experience by undertaking various projects for major international companies such as : Avon, Danone, JMP, MARS, Oriflame, Pepsico, PHILIPS, Unilever, and Wedel.

Every year, the value of the projects we lead is doubling.

Why do our Clients choose us? Generally speaking it is for three reasons :

  • we co-operate with all of the Client’s teams who are involved,
  • we optimise costs at the same time as maintaining high package quality standards,
  • we provide the Client with maximum cost reductions.

We analyse package costs within the context of the entire system of logistical processes. The changes that have to be implemented require collaboration with all teams responsible for the functioning of the supply chain (quality control, logistics, marketing, production, and purchasing departments). We know from experience that, during the implementation of these changes, competition between the third party and the Client’s in-house teams may arise. For our part, PCM guarantee complete openness while the project is being carried out. We share our knowledge and skills, and we show the purpose and significance of the activities being undertaken in a transparent manner. This way, we can garner the employees’ trust and this results in greater commitment and leads to project success.

For us, optimisation is not synonymous with lower quality packaging. To lower the costs, we analyse tens of different constituents, not just the materials used. The solutions that we present to the Client will not compromise quality . Production and transportation tests that verify that the expected durability of the proposed packaging structure and materials are to the expected standard.

PCM is a fully independent company, unrelated to any packaging manufacturer. In the searching for cost optimisation, our only aim is to enable the Client to make as great a cost saving as possible without compromising quality .

PCM’s fees are only paid after delivery of the offered cost savings assuring Clients that work undertaken is fully effective .

Our Solutions

We at PCM offer our Clients a narrow but carefully considered range of solutions. The solutions we put forward are well supported by our exceptional expertise within the industry . They allow our Clients to make financial gains as well as learning how to apply for themselves the techniques employed .

Calls for Tenders

Most previous  Clients like to use a  tender process for packaging procurement covering supplies over a 2 to 3 year period so that they can ensure the terms of trade of the contracts they currently have in force are up to date. In practice, this is rarely possible. To make a call for tenders it is necessary to prepare full documentation (it should contain a complete and accurate technical specification of each packaging component), but it is also necessary to assemble a team of people that will work solely on this task for several weeks. It is also worthwhile to plan ahead and create some space in a busy schedule for reference visits to present as well as potential suppliers.

Apart from evaluating cost parameters, another challenge is the assessment of other terms of supply, such as: payment due date, lead time, stock sizes, delivery sizes, MOQ, tool costs, implementation support, technological possibilities for existing and new packages, potential cooperation on cost reduction projects, quality and availability of raw materials, raw material and final product quality control supplier guarantees (carried out using the laboratory equipment which is available). During the evaluation of tenders, we identify those suppliers that can ensure optimal terms of trade and highly effective coordination with the marketing, quality control, production, and logistics departments.

There are three prerequisites to a successful call for tenders: collecting full documentation, assembling a team, and arranging meetings at the supplier’s location. We know from experience that many entrepreneurs have difficulties tackling these tasks. As a result, calls for tenders take too long or are even left undecided. For this reason, Clients often choose to stay with their current supplier. If, however, they decide to make a change, they cannot be certain if the newly implemented solutions will satisfy the needs of every department or if the costs will be optimally reduced.

We understand our Client’s reservations about the quality of the solutions offered by different packaging companies. The solutions we offer allow no sacrifices in quality. What is more, we provide our Clients with the knowledge and resources (including relevant technical specifications) to facilitate quality parameter control when dealing with packaging on a day-to-day basis. This allows us to ensure that the products packaged are thoroughly protected.

PCM’s calls for tenders partly owe their success to the fact that the materials outlined in the request for proposal are properly prepared beforehand. Our Clients stress that the technical details we supply should allow for an easy and quick comparison of the offers presented by different potential suppliers.

We do not leave our Clients with theoretical improvements that are only on paper. Our cooperation with the Client does not end until any agreed changes are implemented.

Packging & Process Optimization

Supermarket chains frequently introduce new products as well as new packaging formats for existing products . However this is often done without attention to the optimisation of the entire supply chain  and packaging concepts . Consideration of aspects such as speed to market, in-out strategies  and the activity of the marketing department allow us to design, test, and implement new packaging solutions. Depending on time availability and the possibilities open to the team, we can assess the new packaging solutions according to various internal requirements: price, marketing expectations, packaging process, palletisation. Typically as one project is finalised we have a handful of additional projects already underway. As a result the packaging used serves its primary purpose but almost never unlocks the full potential that the company could benefit from. Because the market expects the new product to be released so quickly, proper analysis and optimisation of costs are often impossible, while the total costs incurred very often exceed the cost of the packaging alone. As a result, a company in a situation like this uses packaging that, for instance:

  • has already been designed for another product that was subsequently modified,
  • has been designed with a different logistics supply chain in mind (pallet configuration and wrapping, requirements imposed by the logistics service provider),
  • has not been adapted to the product (due to the quick pace of implementation).
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This generates huge financial losses. The company incurs unnecessary costs.

A similar situation may arise during packaging automation. If consideration is not given to both packaging machinery and packaging materials at the same time, then the consequences can be that packaging and equipment are not aligned leading to significant additional costs over time , sometimes even exceeding the original machine cost .

Each of our Clients works toward cost reduction. Purchase departments concentrate in particular on reducing the costs of packaging. We at PCM do not call our Clients’ decisions or their competence into question. Having gained a different set of experiences and different expertise, we have proven to be a valuable and financially effective partner. This is supported by the projects we have collaborated on, during which our Client–PCM relations had led us to cost reductions of up to several dozen percent.

In any project we undertake, we think holistically about packaging as a link in a long chain of logistics and production. The decisions made at each stage in the chain, starting from the choice of paper through the production of cardboard and ending with solutions such as shelf-ready packaging, all generate costs. Some of them are justified. Others can be left out by opting for more optimal solutions.

Within the model we employ, we analyse over 50 parameters, such as:

  • the technical parameters of paper and cardboard,
  • the structure and size of the package,
  • the packaging supplier’s corrugated sheet and production optimisation,
  • the requirements of the packaging process and the choice of automatic or manual approaches,
  • the methods and quality of pallet formation,
  • the purpose of the packaging as expected by the end user or retailer.

We acknowledge and appreciate the optimisation projects implemented by our Clients. Without the extensive expertise of the employees of various departments, highly effective cost reduction projects would simply be impossible to implement. PCM widens the scope of the expertise and experience at hand, which benefits the end result.

Whereas, in the case of calls for tenders, PCM achieves cost reductions of around 10%, in the case of optimisation projects, we are talking about 20% reductions relative to the purchase costs of the packaging. When the gains made through logistics optimisation are especially significant, total cost reduction can even exceed the packaging material cost. We have practical experience of working on a project with gains of this scale.

Investment Consultancy

The Polish packaging market can be characterised as follows:

  • a strong position in the EU market,
  • a pacesetter within CEE,
  • strong growth built on exports that continues to create enormous potential,
  • very deep fragmentation (companies with more than 50 employees constitute less than 2% of the Polish market).

Consequently, the printing industry, and hence the packaging industry as well, is interesting in that it holds considerable investment potential—for example, for capital funds. We at PCM support our Clients in making investment decisions.

During consultancy projects, we analyse and estimate those factors that are of essential importance for the decisions the Client has to make. The work we do at PCM covers:

  • the verification of long-term trends (new technologies, environmental considerations, and others),
  • the analysis of purchasing strategies as it pertains to raw materials,
  • the comparative analysis of market positioning, brand perception, product strategies, pricing strategies, and the competitiveness of the machines currently in operation as it relates to the growth strategy employed,
  • assessment of the perceived position of the company in the market (technology / purchasing power),
  • assessment of cost and price calculations together with any post order cost audit,
  • the assessment of the effectiveness of the sales department,
  • the verification of the clients’ customer’s financial capacity taking account of factors such as market concentration, price, average order size, market segment, and geography,
  • the assessment of the consistency of technological capacities with the established purchasing goals.
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Projects

We at PCM have a diverse wealth of experience when it comes to the different industries in the market. To date, we have led projects in the food industry (confectionery, desserts, meat, frozen foods), the household chemicals industry, and the household appliances industry.

2015 - 2017
three projects
2018 - 2019
nine projects

A dozen or so of the projects we have led were conceived by companies based in Poland. In 2020, we are aiming to take our first steps toward contracting with foreign partners.

  • 2015-2016

    Manufacturer of household chemicals

    Call for tenders / logistical optimisation.
    Cost reduction: 21%.

  • 2016

    Printing house

    Optimisation of growth strategy.

  • 2017

    Meat company

    Call for tenders / logistical optimization.
    Cost reduction: 15%.

  • 2018-2019

    Food industry

    Call for tenders.
    Cost reduction: 8%.

  • 2019

    Food industry

    Optimisation of packaging structures, manual packaging process , and logistics.
    Cost reduction: 45%.

  • 2018

    Manufacturer of household chemicals

    Call for tenders / packaging effectiveness optimisation.
    Cost reduction: 15%.

  • 2019

    Frozen foods

    Call for tenders.
    Cost reduction: 9%.

  • 2019

    Food industry

    Optimisation of package structure for packaging automation.
    Cost reduction: 30%.

  • 2019

    Confectionery manufacturer

    Optimisation of package structure and effectiveness.
    Cost reduction: 11%.

  • 2019

    Investment fund

    Commercial due diligence.

  • 2020

    Food industry

    Package optimisation for a supermarket chain. Modification of package structures as well as packaging and logistical processes led to cost reductions equivalent to 83% of total packaging costs.

  • 2020

    Manufacturer of household chemicals

    Call for tenders (solid cardboard).
    Cost reduction: 11%

  • Q2 2020

    5 new projects

    (our first project for an international company)

    • pharaceutical industry,
    • meat industry,
    • fresh produce packaging company,
    • confectionery manufacturer,
    • development of environmentally optimised packaging (cooperation with a packaging manufacturer, packaging machine manufacturer, and the end client)

PCM Project 1

Call for tenders.

Client: meat industry, package acquisition costs >9,000,000 EUR.

Cost reduction ~ 17%.

Key components of the project: reduction of suppliers, definition of technical specifications and resources that define the precise bidding parameters when calling for tenders. Some offers were prepared with the help of simple optimisation techniques.

PCM Project 2

Optimisation of package structure, end product palletisation, and their manual packaging process.

Client: food industry, Polish market leader.

Cost reduction ~ 50% of packaging costs through  optimisation of the packaging material and logistics costs

Key components of the project: analysis of the technical costs of production— changing packaging and pallet utilisation to optimise total cost —verification of package structure, assessment of logistics (manufacturer / distribution centre / repackaging / distribution). Joint work with the Client on: package structure design, production and transportation tests.

PCM Project 3

Creation of new packaging adapted to the requirements of a large retail chain.

Client: food industry, packaging costs > 7,000,000 EUR.

Cost reduction: ~ 83% Modification of package structures as well as packaging and logistical processes led to cost reductions equivalent to 83% of total packaging costs.

Key components of the project: creation of a standard packaging format consolidating various previously used packages to meet retailer expectations. Reduction of structures in use from 6 to 1. Optimisation of package structure in keeping with production efficiency tests. Optimal pallet utilisation.

PCM Project 4

Investment evaluation of a limited liability company.

Client: investment fund.

Project value: x0,000,000 EUR.

Key components of the project: Description of key long-term trends in the industry the company operates in. Analysis of purchasing strategies as it pertains to raw materials. Comparative analysis of the company and its competition to examine their: market position, brand perception, product strategies, pricing strategies. Analysis of the sales model employed by the company alongside verification of the longer strategy being employed . Preparation of a description of important operational, commercial, and regulatory risks. Preparation of recommendations in regard to the key operations undertaken within the aforementioned areas in the short and long term.

Contact Us

PCM Andrzej Miziołek

Złota 59 (Skylight, XIVp.)
00-120 Warszawa
NIP 521 149 76 84

miziolek@pcmanagement.eu

UK & W European Business Support Consultant
ch@pcmanagement.eu

 

Monika Brodacka (Customer Service)
(48) 506 164 301
brodacka@pcmanagement.eu