In our recent travels and discussions with multiple industry supply chain professionals, we often hear about supply chain improvement initiatives, particular those that have a either a design for supply chain or sustainability program focus. More and more industry supply chains are responding to increasing mass customization and product innovation needs from customers. At the same time, there remains continued pressures for reducing or controlling overall supply chain costs. Planned new products, and even existing products, are increasingly being reviewed for opportunities to design these products with supply chain physical, operational control processes or sustainability program objectives in-mind.
One of the key aspects or common denominators for these forms of initiatives revolves around the packaging of products. In today’s dimensions of global-based logistics and increasing levels of direct retail shipment or online fulfillment, packaging strategies have become a rather important consideration. Yet, who actually owns cross-functional responsibility for product packaging strategy?
Supply Chain Matters had the opportunity to recently speak with Tom Blanck, who leads the Packaging Optimization Practice at Chainalytics. Tom’s background includes over 12 years of consulting expertise in packaging strategies and leads a team of packaging engineers at Chainalytics. When we discussed common challenges incurred by manufacturers and retailers, Tom echoed that for the most part, no one organizational group tends to own packaging strategy. Marketing or product development may often have the focus of product packaging but the focus is often on product appearance, promotion and brand amplification. Inputs from the supply chain or from manufacturing that relate to the impacts to processes or efficiency needs are often overlooked or dismissed, or sometimes conflict.
Thus the realization of needs for assistance in package design or optimization subsequently comes from supply chain or other executives who suspect that packaging strategy is sub-optimized and could be an opportunity for significant savings in efficiency and cost. Like many other initiatives in these times, packaging optimization needs to be articulated into the bottom line benefits to all of the business, and that is where Tom’s team plays a role, namely building the business case on identifying opportunities and facilitating the tactical groundwork of the strategy components and subsequent benefits.
In our conversation, Tom shared a number of examples where manageable changes in packaging sizes or adoption of standardized packaging standards have led to considerable savings for clients. They might include leveraging the maximum use of transportation vehicle utilization, distribution center efficiencies or fulfillment pick and pack execution. As more firms change their focus toward increased online fulfillment, small parcel and direct shipping requirements require protective packaging, and at the same time, there are consumer focused primary packaging requirements as well.
Consumer product goods firms directly supplying retailers increasingly need to accommodate requests for products to be pre-packaged in shelf-ready promotional packs or end aisle displays which add an additional emphasis for packaging optimization guidelines and standards.
Service focused supply chains have taken on new importance with changed business models for manufacturers and service parts stocking and fulfillment comes with its own unique challenges in package standardization and optimization. It can literally amount to analyzing the right number of boxes and box sizes.
Another area Tom identified was the often discovered interdependence of packaging optimization on overall operations management, logistics and transportation, or overall supply chain network deployment strategies. More and more, these interdependencies are discovered by clients and Tom can call upon the other practice areas of Chainalytics to provide added expertise and the right skill sets for the client.
This author learned a great deal from our conversation and I came away with a deeper understanding of the importance for having packaging optimization as a component of cross-functional supply chain and business strategy.
Disclosure: The author is also a guest blog contributor on www.chainalytics.com .