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Rediff.com  » Business » Godrej innovates to cut losses

Godrej innovates to cut losses

April 07, 2009 10:37 IST

Godrej Appliances has introduced improvements in its packaging this year to reduce inventory losses.

The company has started using a new composite material for manufacturing refrigerators which will subsequently be rolled out to other product lines.

The composite material was developed after almost 18 months of R&D and involved networking with local research labs as well as the supplier base. The material is said to be corrosion-proof and rust-free while having strength on a par with steel.

"It is a great material that supports texturing and new graphics for better aesthetics of the products," says George Menezes, COO of Godrej Appliances. The core technology used to develop the composite was also made in India

The company has also done away with its regular corrugated boxes for packaging to incorporate stretch-hood film packaging and shrink wrapping. Stretch-hood packaging boasts of benefits such as better load stability, flexible adaptation to load height, width and depth and weather protection (rain, dirt and dust-proof).

"Shrink-hood also allows clarity for easy barcode reading, quality control and retail display," Menezes explains. It has "better load stability from factory to shop floor and reduced storage space and reduced wastage are other advantages," he adds.

This packaging helps reduce inventory losses as the transparent packaging allows the product to be displayed without removing the cover and hence prevents any damage to the product, according to Harish Bijoor, business strategy specialist and CEO, Harish Bijoor Consults. Such innovations are good for the industry in the long run, he said.

While this will increase its production cost by 5-10 per cent and packaging cost by almost 20 per cent, Godrej sees this as a long-term investment. While shrink packaging has increased the cost of packaging by almost 20 per cent, Godrej has not passed on the additional cost to the consumers.

While the films for packaging are being imported at present, Godrej is working out ways to locally manufacture the packaging material in future and bring down production costs.

Suvi Dogra in New Delhi
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