Packaging is too often a manifestation of excess and waste. All that extra cushioning. All of those individually wrapped parts. Not to mention packaging that is not easily recycled. Product manuals and accessories that are often just thrown away.

Eighteen months ago, I reported on the packaging problem and encouraged vendors to go on a "packaging diet." My two-part series focused on best practices for packaging reduction. One of my case studies in the series, Cisco's promising pilot program, was highlighted in the Esty / Simmons sequel The Green To Gold Business Playbook.

Since the easy part is often in the early stages with many diets, I wanted to learn how Cisco was doing over the long-term. Glenn Nomi, Cisco's program manager of green technologies and Oleg Kolosov, manager of Cisco's packaging team, met with me and provided an update.

The top-line takeaway: The packaging diet is working: Cisco has saved nearly $40M in two years, eliminated 10 million pounds of packaging in addition to shifting to more sustainable packaging materials.

Cisco continues to expand its program to more products while refining its packaging practices. The program applies to both shipments to Cisco's customers as well as Cisco's internal shipments to its manufacturing partner sites.

Cisco's green packaging program uses three strategies:

1. Remove items that are not wanted from a shipment,
2. Reduce packaging, and
3. Replace with more environmentally friendly packaging

Let's review the details and specific examples for each strategy.

1. Remove

Cisco, like most in the industry, shipped complimentary accessories that would support the installation of its product such as tools, cables, and power supply blanks. The intention was good, but most customers had outgrown this approach. Yet Cisco still wanted to support those customers that used these accessories.

Cisco had to determine when to assume that customer prefers to forgo accessories and when to assume that customer would be best served by providing accessories automatically.

Cisco reviewed its product ordering patterns to determine if customers were ordering any of the related accessories. Nomi explained, "If a large percentage of customers who order a particular router or switch don't order its related accessory, we then made that accessory opt out [i.e., they don't include that accessory]."  

Cisco also took into account the maturity of the product. Nomi continued, "If a product has been shipping for a few years and customers are used to seeing it a certain way, we will generally opt in [i.e. they do include that accessory]. Whereas on a new product launch, depending on the ordering patterns for the previous generation product, we will generally opt out."

Cisco alerts customers when accessories are no longer automatically included in the shipment documentation. Customers may order any accessories still required.

This approach is considered ideal by behavioral psychologists and documented in the book Nudge, by Thaler and Sunstein. The premise is that most of us, even with good intentions, never get around to making a change, so the biggest impacts are possible when the changes we would like to make are made for us.

Another consideration in Cisco's case is that many companies build product shipments based on the belief that their customers aren't be experts in installing a given package, so they choose to include all the accessories "just in case." Cisco is obviously taking the opposite route -- which Thaler and Sunstein conclude is the best approach: Make the desired behavior the default while allowing different choices should the customer specify.

2. Reduce

To reduce its packaging, Cisco considered the packaging materials, the transportation footprint and the product itself.

With its line card packaging, Cisco reduced the volume of foam cushioning used. It was then able to reduce the size and weight of the outer corrugated box. This change alone is expected to save over 180 tons in materials.

Trimming packaging by even a bit may impact transportation since a smaller footprint allows more items to ship together. Kolosov states, "Since the environmental impact from transportation and logistics is higher than the material use, you can reduce a unit's environmental impact by increasing its space/cube efficiency."

Transportation costs are typically the largest single component of the packaging benefits, so space optimization is an excellent area to focus on when going on a packaging diet.

Another technique to optimize transportation footprint, Cisco shifted from single packs to multi-packs whenever possible. Wood pallets were also eliminated. The space savings are often dramatic as shown in the "before (right) / after (left)" photo for routers.

Next page: The ideal scenario for packaging reductions