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Packaging and Network Design

The days of operating procurement and operations teams in silos are long gone. To truly optimize the supply chain, it's essential to integrate transportation and logistics concepts with procurement and inventory management processes. When these functions operate independently, there is a risk that decisions will be made in isolation, without considering the impact on the overall profitability of the company. This can lead to costly mistakes and missed opportunities. By breaking down the barriers between these teams and embracing a holistic approach to supply chain management, businesses can achieve greater efficiency and profitability.


An oversight in the pricing strategy for a large children's toy resulted in a $30 parcel surcharge for e-commerce orders shipped to customers.


Unfortunately, the item had been priced as if it had a "normal" freight cost and was offered with free shipping, resulting in a loss on every item sold.


This issue went undetected until a comprehensive "freight cost by SKU" analysis was conducted, which identified the outlier item. To mitigate the loss, the retail price was adjusted to offset the additional expense.


Although sales did decline initially, the remaining sales were profitable, and the business was able to learn from this experience and improve its pricing strategies going forward.

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