The Ebb and Flow of Centralized vs. Decentralized Packaging Systems

Today we have a guest blogger – Lance Wallin, Business Manager from Sealed Air to talk about Centralized & Decentralized Packaging Systems. Enjoy!

How to balance the value equation between profitability and personalization
By Lance Wallin, Business Manager, Sealed Air

To centralize or not to centralize, that is the question. In this economy, addressing new ways to cut costs and streamline operations is not only beneficial, but imperative to the success of nearly every business. However, there is a thin line business leaders must walk between saving money and ensuring high-quality operations. In this post we will examine the differences between centralized and decentralized packaging stations, the benefits and disadvantages for each, and the types of businesses best suited for these operations.

Centralized: When you think of an assembly-line, one person performing one task and then moving down the conveyor belt to the next person to perform the next task, you are essentially thinking of a centralized system.

  • Benefits:Centralized packaging systems can save space, time and money and result in a highly efficient workplace when implemented for the correct operation. On-line packaging stations require less floor space and reduce material storage since packaging is produced in one location. When it comes to operator efficiency, studies show that individuals with a single task, such as centralized packers, perform those tasks faster and more efficiently than those responsible for multiple tasks. In some cases centralized systems can save money as the time between receiving an order and sending it is shortened, resulting in less cash tied up in inventory.
  • Key Candidates: High-volume shippers, specifically those companies which ship more than 500 packages a day, are target candidates for centralized packaging. A good example would be book distributors, pharmaceuticals and office supplies.

Decentralized: This type of packaging system is based on an approach where one packer is responsible for the entire packaging process. Typically incorporating overhead bins holding packaging material, or small packaging delivery systems, each worker is assigned to a single workstation. Because this type of packaging system typically is more labor intensive, a temporary workforce may be necessary during periods of high volume orders/shipping.

  • Benefits: Personalization and accountability are the chief reasons businesses incorporate this methodology. Each package is customized by one individual. Since a single person is responsible for the whole packaging process, it is much easier to track performance and ensure accountability throughout the workforce. Also, there are now a number of delivery systems and solutions designed to increase the efficiencies around decentralized operations should a business decide their operations are best-suited for this format.
  • Key Candidates: Businesses shipping high-value or fragile products, such as crystal manufacturers, are best suited for this type of packaging system.

The choice to centralize or decentralize packaging stations should ultimately come down to what solution works best for your business model. Be sure to consider customer complaints in regard to packaging and damage and weigh those against the value of the product and the packaging material, and the labor requirements for peak and non-peak seasons. At the end of the day, the goal should always be to provide the best performing protective packaging solution in the most efficient way possible, whether that involves centralized or decentralized packaging systems.