Innovative Solutions: How BFA Plans to Tackle Packaging & Waste Issues
Beauty For All Industries (BFA) is home to the largest beauty subscription brands in the world: IPSY, BoxyCharm, brand incubator Madeby Collective, and personal care brand Refreshments. As a leader in the beauty subscription industry, we ship out millions of orders each month, making any kind of waste and inefficiency a huge problem from both a cost and environmental perspective.
Efficacy alone is not enough when strongly competing in the beauty industry. Another key aspect is efficiency, which brings costs and time under the spotlight. Speed and convenience are non-negotiables when it comes to maintaining strong and lasting customer relationships.
Each month, calculation errors that occur within the fulfillment process will lead to a domino effect of inefficiencies that impact workload, labor costs, delays in order fulfillment, and packaging waste. In terms of workload and labor costs, a miscalculation in the size of packaging for certain orders could result in one of our third-party logistics teams manually re-packing, overpacking, and/or rerouting orders. This manual handling slows down processing significantly, adds additional touchpoints for each order, creates waste (once labeled, cannot be reused), and drives a significant amount of additional labor.
As BFA’s business grows and continues to expand, our relationship with brands, the list of products offered to our customers, and the amount of orders we get will also increase. This will require a managing system that properly assesses accurate product-to-packaging size ratios upfront. Due to increasing demand of orders and output of resources, innovative systems that solve efficiency issues are now more imperative than ever.
Right-Size Packaging (RSP) is an initiative that seeks to address this problem by determining the best packaging (including ancillary packaging) for a given order pre-warehouse stage — taking into account the dimensions of the products in the order (width, length, height), total weight, total volume, and other attributes such as fragility and hazmat-labeled — to reduce the risk of damage during shipment.
Exploring Existing Alternatives
Over 12 vendors were considered and explored, but none of the solutions got us to the 80–90 percent target success rate. Many still require multiple levels of rules to apply the correct selection logic based on order contents or type, etc. Many of these solutions take only volumetric fit into consideration, when product dimensions should factor in, too.
Predominantly all other solutions followed a logic known as “cartonization”, where it looks for orders containing the same SKU multiple times, but fails to work for orders that contain mixed SKUs, and furthermore completely leaves out product dimensions.
A few other solutions used “liquid cubing” as a primary logic when identifying the appropriate packaging requirement. This had a major flaw in orders due to the lack of dimensions being factored in when the volume of the product SKU is lesser than that of the packaging SKU.
At the end of the day, what we were looking for was a solution that takes into consideration all of our packaging obstacles, with both volumetric fit as well as the dimensional fit factoring into the packaging SKU.
The Right-Size Packaging solution consumes information from various systems such as the Product Catalog (for the SKU information), Order Management System (for receiving the order with its details), and a Database where the packaging and ancillary information is configured.
RSP consists of two steps: volumetric fit check and dimensional fit check.
Prior to starting, if any of the orders contains SKUs for fragile or hazmat-labeled items, the packaging that supports these kinds of products will be taken into consideration.
The packaging assignments are configured following certain precedence defined by the Operations team, and each can be configured with a maximum allowable capacity in percentage (e.g. 75 percent).
In the first step, we check whether the total order volume is less than its package candidate’s. If it fits, then we move to the dimensional fit check. If not, we pick the next package candidate on the list and repeat the process.
In the second step, we check the individual dimensions of each SKU against dimensions of its package candidate. The following factors must be true in order for a positive fit:
- Minimum dimension of SKU < Minimum dimension of package
- Median dimension of SKU < Median dimension of package
- Maximum dimension of SKU < Maximum dimension of package
If it passes all the three checks, then the packaging candidate is the right-size packaging. If any of these fail, then we select the next package SKU and repeat the process.
Once the right-size packaging has been chosen, its ancillary packaging is determined and added to the order. The order will arrive at the warehouse with the correct packaging already chosen.
Below is an example of an order consisting of a Glam Bag Plus with Add-Ons that has RSP applied. The best packaging determined for this order is a Large Pink Mailer (wrapping the existing GB+ container).
This initiative will represent a considerable amount in savings for BFA (~70% in cost savings per month) if the correct packaging size is identified upfront. This will prevent the need for additional labor while it simultaneously reduces packaging waste. With BFA programs scaling, that cost number will increase each month.
The way to measure its impact will be through the invoicing received from third-party logistics for overboxing labor, the reduction in monthly material costs, as well as manual WMS (Warehouse Management System) adjustments for boxes, mailers, and packaging. Another aspect will be the shipping time from order reception to order shipment.
Ultimately, this solution will help bolster our relationships with our customer base by decreasing the hurdles that stand in the way of processing their orders in a timely manner. BFA will ship more efficiently, more quickly, and at a higher volume of orders, thus improving customer experience and membership satisfaction.