Behind Amazon’s Packaging Strategy: Machine Learning-Powered Optimization
The formula for packaging has grown exponentially more complicated as consumer goods companies and brands have sought to simplify processes, cut unnecessary costs, and keep an eye toward sustainability.
With Amazon working as a mammoth fulfillment center, the company has had to elevate its structure, reinventing how products are shipped “for the good of customers and the planet.” It has done so by tapping into advanced algorithms and machine learning, with recyclability in mind.
“We know customers care about the packaging used to ship their Amazon orders,” the company said in a statement. “Customers want orders delivered in right-sized, easily recyclable packaging that makes sure the product arrives in great condition, and minimizes its impact on the environment.”
Leveraging Tech in Packaging
In order to reduce waste and ensure products are packaged in properly-sized boxes or mailers, Amazon has been leveraging machine learning. The tech communicates which products are suitable for flexible packaging (i.e., mailers and bags), as they are 75% lighter than similar-sized boxes and more sustainable.
In the past five years Amazon has been utilizing this approach, the algorithms have reduced the use of corrugated cardboard boxes by over 35% in North America and Europe. Additionally, a few years ago, Amazon began to tap into algorithms that reduce packaging for shipments with multiple items, decreasing the size of packaging for 7% of shipments in North America since 2018.
“We’ve also been investing in optimizing our packaging suite to minimize the amount of paper we use for each package, saving approximately 60,000 tons of cardboard annually,” said Amazon.
According to the company, these algorithms — run by web-based tool PackOpt — work like a 3D Tetris. The high-performance algorithms quickly determine how different items can be configured within a box, analyzing foldable or compressible items like clothing which can slot around other, more solid items.
The algorithms require two inputs: historical shipment data of the region and the dimensions of the boxes. Behind the scenes, the technology has 25 different parameters it considers.
Amazon’s goal, however, was that the tool be simple enough for a streamlined, company-wide rollout.
“There are many different steps that must happen between solving this optimization problem and actually delivering optimized packaging to our customers’ doorsteps,” said David Gasperino, an Amazon principal research scientist, in an Amazon blog posted this summer. “We needed the regional packaging leads all over the world, who aren’t scientists, to quickly understand how to use PackOpt and to see the economic value in it for themselves, and eventually become the champions for packaging optimization.”
Moving Away From Plastics and Other Considerations
Like many companies, Amazon is looking to do away with plastic-based packaging. While lightweight, waterproof, and requiring less materials, plastics are significantly harder to recycle, often requiring customers to take the materials to a drop-off location rather than simply putting them into their recycling bin.
“This has created a challenge that Amazon is taking head on — how to continue to find ways to minimize carbon emissions, increase recyclability, and reduce waste,” the company said.
As part of this initiative, Amazon has worked to eliminate the use of additional packaging altogether, and since 2015 has reduced the weight of packaging pershipment by 38%. This has eliminated the use of more than 1.5 million tons of packaging materials. Last year alone, Amazon reduced the average plastic packaging weight per shipment by over 7%.
In cases where Amazon can’t eliminate the packaging materials, it is looking into alternative materials that can more easily be recycled. This includes the company’s curbside recyclable paper-padded mailer, which can be collected and sorted at a regular recycling facility, which has launched in North America.
Additionally, in the U.S., Amazon offers a new curbside recyclable package that keeps its Amazon Fresh or Whole Foods Market deliveries frozen or chilled while eliminating the need for plastic liners or bubble-bag insulation.
Packaging: A Business Domino Effect
Why is packaging innovation a significant achievement? The results are varied and can impact the entire value chain, from cutting down on shipping costs to reducing the impact on the environment to improving the customer experience.
“Compared to electric vehicles, green hydrogen, or the next generation of photovoltaics, packaging may seem rather mundane,” said Amazon. “But as you consider practical ways to minimize carbon emissions, eliminate waste, and increase recyclability, packaging is critical.”
This is why so many consumer goods companies are looking to overhaul their own approaches, transforming either the back-end processes or those that directly impact customers when products reach the shelves.
The Kellogg Company, for example, recently shared plans to manufacture four mainstay brands with NaviLens technology on their packaging in the U.S., designed to make them more accessible to consumers who are blind or have low vision. Also, PepsiCo recently announced it is expanding its SodaStream Professional business, collaborating with PepsiCo bottlers to build out refillable plastic and glass bottle offerings, driving accelerated growth in powders and concentrates.
“It’s the type of challenge that we thrive on at Amazon, and our dedicated teams are problem-solving how to execute solutions in different countries with varying complexities, simulating deliveries to discover ways to reduce packaging while protecting the product, and exploring innovative materials." — Amazon
This article first appeared on the site of sister publication CGT.
