July 3, 2013
Five Reasons Why Packsize Qualifies as “Disruptive Technology”
By David B. Goates
The first time I heard the term “disruptive technology,” it was associated with Clayton M. Christensen, a business guru at Harvard in his 1995 article Disruptive Technologies: Catching the Wave. The theory stated that in order to be considered a disruptive influence in the marketplace, an innovation would not necessarily have to be “new” in the sense it had never existed before, it would only have to offer better value for an existing process.
Such disruptive innovation can be seen in the commodity markets for corrugated materials handling. Most companies have been buying pre-made corrugated boxes the same way for the last fifty years. They figure out what sizes are “pretty close” to accurate for the goods they needed to ship out, then they negotiate the lowest prices possible by pitting the suppliers against each other. Corrugated has long been viewed as a commodity, and the lowest cost wins. End of discussion. Left unaddressed in this conversation, however, was the void space inside the box; and whole industries sprung up to fill the void with Styrofoam peanuts, wadded up paper, or recycled cardboard.
Without knowing he was describing Packsize at the time, Christensen stated: “Generally, disruptive innovations were technologically straightforward, consisting of off-the-shelf components put together in a product architecture that was often simpler than prior approaches. They offered less of what customers in established markets wanted and so could rarely be initially employed there. They offered a different package of attributes valued only in emerging markets remote from, and unimportant to, the mainstream.”
And so it began for Packsize founder and CEO, Hanko Kiessner. Today, there are at least five significant reasons his company qualifies as “disruptive innovation.”
- The barriers to accessing this technology innovation have been removed because there is no capital acquisition cost associated with adopting it.
- The freedom and flexibility to create and mass produce corrugated boxes on site in an endless array of possibilities have freed up valuable floor space so ordered box sizes no longer need to be inventoried.
- Producing the right-sized box has eliminated the need for fillers of all kinds, thus cleaning up the environment of unnecessary waste.
- Companies who now ship their products in the right-sized boxes are reporting the ability to put 15% to 20% more products on each delivery truck, sharply reducing gas consumption and infrastructure impact.
- The elimination of waste means companies are now buying significantly less corrugated material, reducing the environmental impact up to 66% from forest to landfill and every step along the way.