In order to ensure customer satisfaction, companies need to make sure that their products get to the market in a consistent, sustainable and timely manner. At the same time, it is relevant to highlight that demand for some goods has been increasing drastically as people spend more time in their homes and thus have more time for online shopping. In parallel to this, inflation is driving up transportation costs all over the world. So, the question which arises is whether companies can maintain their production and supply chain processes and still be profitable whilst keeping their customer base satisfied. Not to mention the sustainability of these production models.

A potential answer / solution to this problem companies are increasingly facing is skinny design. This innovative way of designing involves “reassessing the overall box size of products by reducing the total cubic volume of the package” and can thus improve performance in several ways:

• Better shelf holding power: fitting more products on the same shelf space in the retail store and/or distribution center.

• Freight savings from fitting more products in same space on ocean containers and/or trucks

• Sustainability improvements: CO2 emissions reduction from smaller packages, less materials used and less packaging waste, and a more efficient use of freight transportation

One example of how skinny design can create gains for companies is packaging. Historically, packaging has been considered as a critical billboard for the product. It was believed that the larger the packaging, the more the product would stand out in the shelves. However, the COVID-19 pandemic has severely changed consumer behaviors and the importance of packaging of in-store-point-of-sale has decreased. Which are the factors that have contributed to this new dynamic?

First, the rise and establishment of e-commerce. Stores are increasingly becoming warehouses for gig shoppers and online shopping is expected to continue growing. This trend allows companies to transition to slimmer package designs that can fit more products on the existing shelf space. Furthermore, consumer decisions are often based on the availability of the product in store and therefore, the delivery time. The more products you can fit on your shelf space, the easier it will be to respond to the demands of your customers in a short period of time.

Furthermore, the good news for companies is that they can quickly implement the elements of skinny design with little investment. Companies need to start by setting aspirations, establishing the new technology foundations and implementing new ways of working. By doing this, skinny design would help them to maximize the volume of their products that makes it onto shelves.

Setting the aspirations is about understanding the size of the opportunity to create the business case, which is typically associated with reducing stock outs and cost through freight savings. Once the business case is clearly defined, the second step is using advanced technological tools that can build the fact base to determine the specific packaging levels to target. Lastly, it is about implementing new ways of working, or in other words, making changes to existing packaging or the product design itself.

All in all, companies that manage to successfully complete these steps will be well positioned to capture additional value. Amid the supply chain challenges, those companies that can figure out how to fit more products in the same container space will reduce logistics costs and improve product availability. Besides this, organizations that are able to build the internal means to embrace skinny design will be better positioned to confront supply chain constraints in the future.

(1) Skinny Design: Smaller is Better, McKinsey & Company by Dave Fedewa, Daniel Swan, Warren Teichner, and Bill Wiseman. April 2022.