60 seconds with Jack Ampuja, Supply Chain Optimizers

Jack Ampuja
Supply Chain Optimizers
Title: President
Location: Buffalo, N.Y.
Experience: 35 years in supply chain management with five Fortune 500 companies
Primary Focus: Packaging optimization across the supply chain.

Modern: One of the things we have noticed at Modern is that materials handling and packaging are working more closely together than ever. Why do you think manufacturers, distributors and shippers are now paying more attention to how their product is packed at the end of the line and loaded into containers and trailers?
Ampuja: That’s an interesting observation, and it’s on target. My two cents is that packaging is the last major frontier in the supply chain. So many companies have already focused on the low-hanging fruit, so there isn’t a lot of easy money left to save. What’s happening now is that supply chain professionals are realizing that packaging has an impact on warehousing and transportation. Do it right, and there are big benefits down the pipeline.

Modern: Since you began as a supply chain executive, tell us how you became interested in this area? 
Ampuja: Back in 1992, I was a vice president at a wholesale food company in Buffalo. I happened to sit next to a gentleman at a conference who told me he was the co-founder of a company that optimized packaging to make supply chains more efficient. I was skeptical, but he gave me the name of an executive at a famous potato chip company as a reference. He told me to give them a chance and they would find ways to take costs I’d never thought of out of my supply chain. I brought them in and gave them buying specifications for our shipping cases and supply chain costs for 25 SKUs. They came back with a way to save $3 million through optimized packaging. I stayed in touch and years later, I joined the company.

Modern: Where do the savings come from? 
Ampuja: Freight. While most logistics professionals think their freight bill is driven by weight, they forget that it’s also driven by volume. If we can squeeze the air out of the box— make the box denser—we increase the density of the load and freight costs behave better. In the case of the wholesale food company I used to work for, we were able to get 45 cartons instead of 40 cartons on a pallet. That allowed us to ship out more product in a trailer load. We’re going to optimize the box around what’s going in the box and then look at the impact on costs across the entire supply chain.

Modern: As our readers think about their operations, what is the starting point for them if they want to optimize their processes? What are some of the best practices?
Ampuja: The No. 1 consideration is that packaging is a shared responsibility. You need all of the key players involved—marketing, engineering and logistics. Ultimately, you’ll get a better decision out of that process. We worked on a kit that a major manufacturer created to give to a woman as she leaves the maternity ward to go home with her baby. We gave the marketing department four packaging choices. The difference in logistics costs between the low cost and high cost alternative was 75 cents per kit, and the manufacturer was going to give away 1.2 million kits a year. That’s a $1 million difference just in logistics costs. With that kind of information, they can make a decision about the tradeoff between logistics costs and how they market the product.