Packaging Supply Chain Tips

Consumer Packaged Goods companies can uncover sustainability and profitability benefits throughout the packaging supply chain by focusing on these nine key areas.

Packaging Supply Chain Tips
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The announcement of Wal-Mart's new sustainability scorecard has established sustainability as a source of differentiation and competitive advantage for Consumer Packaged Goods (CPG) companies. It turns out that what's good for the environment can also be good for business. As companies strive to meet their sustainability goals, they can also improve efficiency, cost-savings and profitability.
CPG companies can uncover sustainability and profitability benefits throughout the packaging supply chain by focusing on the following nine key areas:
Package design Package design plays a critical role in helping CPG companies achieve sustainability and profitability goals.
More efficient packaging can reduce warehouse, distribution and transportation cost and consequently energy usage and greenhouse gas emissions (GHG). The amount of GHG and Carbon Dioxide (CO2) emissions per ton of production accounts for 15 percent of Wal-Mart's packaging scorecard. Efforts to reduce these emissions can also improve a CPG company's competitive position relative to other suppliers.
So while CPG companies need to look at the big picture—the entire packaging supply chain—to uncover new sources of efficiency, waste reduction and cost savings, they also need to think "inside the box" with package design.
Material optimization Material value represents 15 percent of the total sustainability metrics that will be measured by Wal-Mart's packaging scorecard. One way CPG companies can improve sustainability is by reducing the total fiber content of their corrugated boxes.
Fiber reduction is achieved three ways: by using an innovative package design that utilizes less corrugated board; by using less fiber within the corrugated board; and by using lower basis weight material. Quite often the best fiber reduction solution is a combination of all three.
Using a low-fiber package is a great way to improve packaging sustainability. However, removing fiber from corrugated board without compromising the integrity of the package can be challenging. Microflute delivers the strength of corrugated board with the high graphics impact of traditional folding carton. The result is a low-fiber package with Point of Purchase (POP) appeal.
Shelf impact In club stores, secondary packaging often plays a primary role. In this dual role, secondary packaging functions both as a shipping container and a display package. Therefore, an optimized package can enhance function, increase shelf appeal and velocity and in some cases, even reduce store waste.
Recently, we redesigned the packaging for Dixie's PerfecTouch Grab N Go insulated 12 oz. paper cups. Paper cups are traditionally packaged in large quantities in polyurethane bags. The new package design allows for better placement of the cups on store shelves. The carton itself acts as an excellent canvas for a variety of designs as well as communicating the product's benefits to the consumer. It also fits neatly in kitchen cabinets or pantry shelves, further enticing the consumer to buy.
SKU consolidation CPG companies with 50 or 100 different SKUs pay more for packaging because suppliers are forced to perform shorter production runs of myriad package types. The number of SKUs can be dramatically reduced by developing package designs that meet universal needs.Alternative packaging Alternative packaging can provide significant sustainability benefits. A good example of that is Greenshield. The produce industry traditionally uses non-recyclable wax coatings to protect the integrity of packages containing delicate perishables. As an alternative to wax-coated boxes, Georgia-Pacific's Greenshield family of products delivers tested strength and an excellent moisture barrier and is recyclable. Reusable plastic containers (RPCs) may also be used as a more sustainable alternative to wax-coated boxes. Georgia-Pacific is the only packaging supplier to offer customers both a corrugated and a plastic packaging solution—both options have sustainability benefits as well.Productivity improvements There are many opportunities in the packaging supply chain to improve productivity by focusing on automating manual processes. For example, significant efficiency gains have been made by automating case-forming and stretchwrapping processes. These processes not only enable more effective use of labor, but they can also reduce material costs.
Material handling Safe, effective material handling is central to streamlined packaging supply chain operations. Like each of the nine key areas of the packaging supply chain, material handling optimization depends on countless variables that are unique to each company and facility. For example, an innovative corrugated box design may give new strength to a package that was previously susceptible to damage by a clamp truck.
Other techniques to consider include the use of slip sheets in lieu of pallets or stretchwrapping instead of strapping. Pallets can be costly to manage and store, while stretchwrapping may avoid damage from strapping. Conversely, some companies may find stretchwrapping and slip sheets inappropriate and expensive and instead may look for new ways to optimize existing strapping and palletizing processes. Only by closely examining dozens of variables that effect material handling can the best solution be found.
Warehousing Efforts to optimize the warehouse can include creating packages that can stand up to the demands of the warehouse environment and make efficient use of warehouse space.
High humidity, storage time and stacking height can all erode the integrity of a stored package over time. The degree to which these factors affect box performance depends on individual package characteristics. Whereas the solution to compression failure for one company may be to reduce stacking height, the answer for another may lie in the use of a Bliss box over a traditional RSC to provide added strength that allows packages to be stacked even higher.
Transportation The road to improved sustainability, rather appropriately, is often connected to transportation itself. This is because many of the sustainability improvements made farther back in the supply chain are realized during transportation. More efficient, lighter-weight packages help reduce the number of truckloads, which result in reduced fuel usage and greenhouse gas emissions.
Equally critical to reducing shipments is cube utilization. In some cases, mixed products on pallets can contribute to poor use of space, while in others unit load height is not as high as it could be. Placing pallets in a "pin wheeled" position can maximize cube utilization and prevent excessive load movement in the truck.
CPG companies can gain a significant sustainability advantage by optimizing their distribution operations. This is reinforced by the fact that cube utilization and general transportation factors together will account for 25 percent of a CPG company's total score using Wal-Mart's packaging scorecard.
Top Of The Scorecard
If CPG companies are to stay competitive in a world of shrinking margins, rising costs and pressure to outscore other suppliers on Wal-Mart's packaging scorecard, they will have to leverage sustainability efforts into a profitable advantage. Opportunities to improve efficiency exist across the packaging supply chain, CPG companies need only find them.
Georgia-Pacific offers a program called Packaging Systems Optimization (PSO) to help CPG companies optimize these nine areas of the packaging supply chain. By providing quantifiable cost savings and measurable sustainability impacts, the program enables CPG companies to simultaneously realize sustainability and profitability goals.
With more than 15 years experience in the consumer products and packaging industries, Smorch leads Georgia-Pacific's Packaging Systems Optimization (PSO) program. Based at the company's Innovation Institute in Norcross, GA, he is responsible for delivering supply chain savings and measuring sustainability through PSO for both national and local packaging customers located across the United States.
Operational Tips For Going Green
Manhattan Associates, an Atlanta-based supply chain solutions provider, offers the following tips for helping companies achieve both environmental and operational benefits by focusing on "green" initiatives in their DCs:
Maximize efficiency of conveying and handling processes. Integrating material handling and warehouse management systems enables manufacturers and distributors to move and touch products fewer times and reduce forklift usage. In addition to reducing handling costs, these advances help to reduce energy consumption and reduce emissions.Increase flow through. The use of advanced warehouse management systems also enables companies to streamline warehouse processes to achieve higher levels of cross docking, which in turn helps to minimize inventory and increase product turns. With more flow through, companies manage their business with smaller distribution centers. In addition to containing expenses, this helps to reduce energy consumption and limit the use of construction materials, which are not needed because existing DCs have increased capacity.Optimize transportation processes. The use of transportation management solutions to create a more efficient transportation network helps reduce the number of empty hauls and dead ends in the movement of goods. This reduces fuel consumption and extends the usefulness of trucks and trailers for reduced material usage.Enhance planning, forecasting and replenishment. Using best-of-breed planning, forecasting and replenishment solutions drive more efficiency in manufacturing and distribution for reduced energy and materials consumption, as well as improved operational efficiency.Improved cartonization. Using cartonization functionality in warehouse management systems enables companies to better allocate the right units to pick and then select the correct size and rigidity of the container to use. This can significantly reduce the use of cardboard, a major expense for many companies, and other shipping materials. The result is reduced paper consumption, which produces a reduction in forest harvesting.Leverage electronic interfaces. Using radio frequency identification and voice-based technologies improves warehouse efficiency and also reduces paper consumption.author: By Patrick Smorch




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