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Strategic Packaging in Supply Chain Management

Demand for personalization and convenience in CPG is sending ripples throughout packaging supply chains. While some shoppers still buy in bulk, the rise of the solo consumer is sending meal kits, single-serve, and ready-to-eat options flying off the shelves as more than 35.7 million Americans are currently living alone. Environmental consciousness is also elbowing its way to the supply chain table as packaging for consumer goods makes up the largest market for plastics and accounts for almost half of all plastic waste worldwide.

Small serving sizes and easy-to-use containers must fit into production lines alongside traditional packages, and complexity is squeezing supply chain operations into a crevice between versatility and efficiency. Before getting caught in the crosswinds, companies should explore innovations in packaging that satisfy convenience without increasing costs. By incorporating flexibility and efficiency into all facets of a package, companies can embrace versatility while maintaining a lean supply chain process.

Primary Packaging in Supply Chain

A product’s primary packaging has vital functions that include protecting the product’s quality, displaying information, and enhancing the customer’s experience. Reducing weight and conserving materials are common initiatives to decrease transport costs and send less waste to landfills, but these benefits shouldn’t come at the expense of a package’s durability and ease of use. When it comes to the type of material used, function and shape should be intentional to meet the needs of the product’s intended channels.

Flexible packaging can save space while extending food’s shelf life, and in brick-and-mortar settings this can reduce your product’s footprint without inhibiting its visibility. But while air space in a flexible package can protect goods and make an item more visually appealing on a store shelf, it occupies precious volume and incurs logistics costs in e-commerce. When designing primary packaging, protection and quality of the product should come first, followed by channel-specific considerations.

Smart Package Capabilities

Smart packaging includes any type of digital enhancements made to packages to improve their function. RFID chips can be embedded into individual packages to track inventory, and can even be integrated with sensors to automatically relay quality information to manufacturers, customers, or retailers. Smart packaging can also enhance a label’s marketing capability, as a Mintel study found that more than 50% of US consumers are interested in using mobile phones or in-store technology to learn more about products than what’s on the package. Equipped with augmented reality and QR codes, packages can link customers to online resources, saving manufacturers space and printing costs for labels. By upholding product integrity and delivering a prime customer experience, smart packaging has the potential to revolutionize consumer goods from conception to consumption.

Transform Production Lines

A significant challenge in managing the packaging needs of multiple channels is doing so efficiently without increasing the manufacturing footprint. During the design phase of a product, increased collaboration between your company and your packaging in supply chain equipment manufacturers can cut out excess costs, ease communication, and allow for seamless transitioning down the line.

As product runs become shorter and product portfolios diversify, investing in flexible, multifunctional equipment can allow for rapid changeovers without wasting machine downtime. Additionally, because technical skills are in shorter supply across logistics industries, having user-friendly human machine interfaces (HMIs) along with tool-less equipment changes and clean-in-place capabilities to facilitate diverse packaging needs can become a competitive advantage.

Channel-Specific Packaging

There’s no longer a one-size-fits-all option for omnichannel companies, as each channel requires specialized package designs. In conceptualizing packaging workflows, companies should consider whether centralized or decentralized packaging lines are best for their needs. It may even be more profitable to package retail-bound and DTC goods on separate lines. Although this idea may be counterintuitive, the industrial internet of things can allow companies to streamline a singular production process with dual packaging lines while closely tracking the quality of operations throughout. Companies should consider channel-specific packaging lines to eliminate redundancy, better manage material inputs, and enable faster packaging on demand.

Efficiency in Shipping

A product’s secondary packaging should be fit for use in its intended channel, as retailers and customers interact with shipping materials in different ways. Upon reaching its final destination, the less secondary packaging that retail staff have to handle means the faster your product can hit the shelves. Even the simple switch from corrugated trays to printed film can reduce packaging steps, costs, and waste while offering much more informative and colorful labels. In e-commerce, digital labelling allows for personalization. For wholesale and club stores, well-designed secondary packaging can even promote your product’s placement in the store. By creating targeted shipping lines, companies can increase efficiency and reduce lead times to effectively satisfy retailers and consumers.

The way a product is packaged should be incorporated into its design from inception and monitored throughout the product’s lifecycle to reduce inefficiencies as they arise. While a complete packaging overhaul may be necessary for some operations, a simple audit of each step in the packaging process can help companies understand how best to structure themselves to conquer all channels successfully.

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Contributions by Kyleigh Andries.

Tags: Supply Chain Planning & Execution