Case Study: From $9.8M in Losses to $5M in Savings: Solving the Costly Challenge of Headlamp Returns
A leading automotive OEM faced critical challenges with its re-manufactured headlamp foam-in-place packaging. While foam-in-place provided robust outbound protection, it complicated return shipments, leading to $9.8 million in annual losses for the OEM.
Overview
A leading automotive OEM faced critical challenges with its re-manufactured headlamp foam-in-place packaging. While foam-in-place provided robust outbound protection, it complicated return shipments, leading to $9.8 million in annual losses for the OEM.
Discover how Pregis turned this problem into a nearly $5 million annual savings opportunity.
Challenge
The existing packaging presented two significant issues:
- Complicated Returns: Re-manufactured headlights, like other complex automotive parts, have higher return rates. Customers found it difficult to securely repack them, increasing the risk of damage during return shipments
- Significant Financial Loss: A 3% damage rate translated to over $800,000 in monthly losses
To address these challenges, the company set clear parameters for a new packaging solution:
- Reduce the damage rate from 3% to 1.5%
- Provide an intuitive, reusable solution for returns
- Standardize packaging for various headlamp sizes, minimizing SKUs
- Integrate seamlessly into existing workflows with minimal disruption
Solution
Leveraging proven expertise in automotive packaging, Pregis introduced AirSpeed® ChamberPak®. This on-demand solution features interconnected air chambers with patented one-way valves, ensuring that if one chamber is punctured the others remain inflated, for continued protection.
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