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"How cost reduction is supported by choosing the right testing method"

At the yearly ISTA TransPack Forum in Orlando, Nefab will present a report about how Cost Take Out (CTO) is supported by choosing the right testing method.  

Ildiko Farkas from Nefab will be our speaker at this year's ISTA Forum.

Nefab's Cost Take Out concept was developed by Nefab out of years of experience working together with large multi-national companies and numerous cost saving programs. The CTO concept is applied together with carefully chosen test methods used to improve the accuracy of identifying cost savings. 

This article aims to briefly describe the Cost Take Out methodology and explain its link to testing through a case study. Instead of focusing on one final verification test (performance evaluation), testing can be performed gradually as the cost saving project is evolving. This would immediately allow the user to evaluate if any corrections are needed, whether to proceed, make corrections or simply close the project. The choice of test method has an impact on total cost of the project, as implementation time (time to market) and the cost varies between different test methods. 

This specific subject was chosen due to the fact that the last decades' increased global competition has had major effects on the awareness of cutting costs, increasing efficiency and maintaining profitability of a company. This increased awareness has led companies to create structured mechanisms and programs to continuously identify methods to reduce cost, consequently cost reduction programs are implemented on all levels of the firm, including logistics and packaging departments.

To meet the demand of this increased efficiency, packaging experts and designers need to be more dynamic and anticipative of customers' expectations. To handle an increased demand for cost efficient solutions in the packaging industry there is a permanent need for a new and/ or alternative methods for packaging in logistics.
An efficient and suitable packaging solution brings benefits both from an economical and environmental perspective. On one hand, less packaging material results in reduced physical volumes and savings in material, on the other hand, there is a limit to how much packaging material can be reduced without risking the functionality of the product the packaging is meant to protect.

Considering packaging as a system consisting of a product with different packaging components and a system integrated in a complex supply chain, facilitates the match of creative re-design ideas with appropriate test methods. This will contribute to the reduction of development time and costs. In the end it will guarantee a successful implementation.

The case study describes how the designer gets from the old solution to the new solution evaluating the building block of the packaging system one by one as the design is evolving. It shows how the Cost Take out methodology works in practice, which tools are used during the process to support the design. The case study tracks the changes made in the old design and explain why those changes are necessary and suggest a test method which can verify the performance of the suggested changes.

The most important conclusions are:

  • Ultimate goal: field performance (functional packaging) and a
    valid business case
  • Choosing the right testing method and evaluating the
    performance of the packaging components as the design work is
    evolving speeds up the implementation process and reduces costs
    and risk of failure
  • Choice of testing methods varies from case to case: most critical
    supply chain constraints and customer requirements will determine
    which test method to be used, therefore it is essential to go through
    the six elements of cost (flow review)

Come visit us at the ISTA TransPack Forum,
April 7-10 (Orlando, Florida)

To learn more about this particular case and Nefab's Cost Take Out methodology, you are welcome to visit the ISTA TransPack Forum in Orlando. If you want to review the complete report, please email Ildiko Farkas