If you’ve designed your packaging to only look good to your customers, you may be in for a nasty surprise. What do you need to know to make absolutely sure your products can withstand the rigours of the journey through the supply chain?

The Importance of Packaging in the Supply Chain

There’s little doubt that retail markets, manufacturing methods, logistical flows and the environment in general are evolving. With this fluid landscape in mind, it’s important to anticipate how your product packaging fits with what’s just over the horizon.

Remember McDonald’s burgers served up in styrofoam containers? Nope, gone.

With respect to the gist of this article, that’s perhaps a little too far down the consumer FMCG supply chain. But the point is, if you don’t keep up with customer trends and expectations (as McDonalds was wise enough to do), you will become history sooner than expected.

Why is Proper Packaging so Important?

Imagine for a second, what condition do you think your smartphone would be in if it had left the factory without any packaging? Would it have wound up in your hand unscathed, in perfect working order without damage? Probably not.

Now imagine that same product perfectly packaged to presumably withstand any hardship on its journey to you, but has to experience severe heat, humidity or other conditions that were not anticipated.

The above examples may be extreme, but they illustrate how the success of each is dependant on the other. Both currents in the supply chain flow, the product deliverable and delivery system itself, have to be in harmony to keep the wheels of any economy turning smoothly.

Just as transportation systems must be efficient, packaging is just as important with respect to the total delivery process. Proper packaging serves as the protective barrier for goods from the time they leave the manufacturer, through transportation to distribution channels and finally landing in the hands of the customer.

Sustainable Packaging and Its Role in the Supply Chain

Making changes towards more sustainable packaging design, even minor ones, can make a world of difference, and a difference in the world. Small improvements in production, materials and operations decrease pressures on resources and reduce environmental impact.

Is there an end point where we say packaging is perfect? The answer lies in understanding that over time, change is inevitable. Therefore as a business owner, it’s imperative that you continually re-assess your packaging efforts, look for opportunities. Smart packaging means refining your processes to be more in line with consumer trends and current supply chain management conditions.

A few solutions that can increase packaging sustainability in the supply chain include:

• Minimal Packaging: Efficient and effective packaging is not only in line with lean manufacturing, it sheds a more favourable light on a company’s reputation as an environmentally conscious and authentic sustainability partner.
• Packaging Weight: By intelligently reducing the weight and mass of packing without sacrificing structural integrity, logistics-related costs can be reduced through decreased fuel consumption and maximized storage space.
• Single-Source Materials: While a see-through plastic window may help sell a pastry or pie, it does nothing in terms of sustainability when it’s hidden inside another opaque container. Wherever possible, alternatives for mixed-materials, especially in consumer packaged goods (CPG) should be considered.
• Dissolvability: Compostable, plant-based packaging continues to be a more favourable marketing alternative. From forks and spoons made of starch to protein-based edible flexible films, their value lies in their efficient ability to return to the earth.
• Re-ability: Reusable packaging in the supply chain along with multi-use containers is not only widely accepted, but continues to gain traction every day. Reusable, refillable, returnable items such as plastic containers are expected to enjoy a CAGR of 9.5% through to 2028.
• Waste Controls: Whether through efficient movements in physical handling and storage, or partnering with 3PL services that practice green logistics, controlling waste of any kind is an imperative throughout the supply chain.
• Legitimacy: Counterfeit products, especially in the e-commerce sector, dilute consumer confidence across the board. By offering a method of verification, such as QR codes on labels or tamper-proof packaging, provide customers with the security they feel is necessary to qualify a purchase.

Essential Packaging Requirements in the Global Supply Chain

If you package your products, you are by default a contributor to the betterment of the global supply chain. As part of a responsible supply chain management strategy, proper protective packaging helps ensure the shipping industry is not encumbered by excess losses and insurance claims due to substandard or inadequate packaging.

While every market segment has its own specific baselines for packaging requirements, all related systems must work together to ensure the delivery process runs smoothly from iteration to destination.

Regardless of the type of item, from a toothpick to a new refrigerator, there are fundamental packaging functions that must be considered:

• Protection: Product packaging must protect the goods from the rigours of shipping, handling and other external factors to make sure that products arrive in good condition.
• Storage: Since products can travel through multiple storage locations before they reach their final destination, packaging and associated materials must allow for convenient storage and meet storage requirements.
• Transportability: Better packaging design allows for more efficient handling, stowing and stacking capabilities. By maximizing available space, all aspects of the transportation process become more cost-effective.
• Tertiary Packaging: The extra layer of protective packaging that safeguards the secondary and primary packaging levels of the goods. Not only is there an organizational benefit through grouping products into a single container, using eco-friendly materials for this function is generally more favourable as we move towards global awareness and environmental responsibility.

Final Thoughts

There are many aspects to packaging that work with and within an evolving supply chain system. Major influences include the ability to draw from data-based feedback, making forward-thinking decisions based on solid information and managing the supply chain responsibly.

To successfully accomplish this year after year, we must be able to predict and control key resources such as product protection, specifications, delivery times, inventory levels, workforce stability and perhaps most importantly the safety of all who are part of the global supply chain network.

The COVID-19 crisis has intensified the competition for valuable supply sources. In certain industrial sectors, including electric vehicle production, the bargaining power has shifted from OEMs to suppliers.

While it is normal for companies to renegotiate, current extraordinary circumstances are leading to major agreements in the new context.

For example, Tesla and CATL recently announced a strategic partnership for CATL to supply EV batteries to Tesla’s Model-3 production in China, moving away from sole dependency on Panasonic.

Toyota and Panasonic also announced an agreement of a joint venture to produce EV batteries. Similarly, BMW signed a major agreement to purchase EV batteries from CATL worth of 7.3 billion euros.