Packaging optimization: Engineering for your specific supply chain

When I first began my career, I thought “packaging and supply chain optimization” was simply a fancy collection of words put together to impress supply chain executives. However, if you’re a packaging engineer or work in a related industry, then you understand the layers of complexity and challenges that true packaging optimization involves.

So, what exactly is packaging optimization?

In the simplest sense, packaging optimization means using a fit-for-purpose packaging system designed for specific manufacturing and a specific, tested supply chain. An ideal packaging system promotes, contains and protects your products as they move from the manufacturer to a warehouse or an in-store fulfillment center, and on to the end consumer.

Many choices determine the condition your product arrives in, including:

Identifying the supply chain risks a product may encounter

Pause before taking on designing primary, secondary and tertiary packaging. You need to understand the manufacturing processes, the supply chain flow and the product’s vulnerabilities. Test the product using established protocols to gauge its fragility. (That’s a measure of how much damage it will sustain under specific conditions and environments.) Next, develop appropriate primary, secondary and tertiary packaging. These help the product — and the package — endure the supply chain hazards to which they’ll be exposed.

• Primary packaging is designed with ease of use and opening, the user experience and store display in mind. It is designed to use the least amount of space and materials possible while providing the necessary amount of product protection.
• Secondary and tertiary packaging help products withstand risks within the supply chain. These can include shipping hazards, such as handling by forklifts, clamp trucks and conveyors, as well as the potential drops and other impacts of manual handling.

Selecting the right amount of packaging for the supply chain environment

Products can be under-packaged. This easily leads to damage, reverse logistics (also known as returns), product waste and additional costs. They may also be over-packaged. In this case, the product uses far more material than necessary to mitigate risks. The result is waste, larger and heavier packaging than necessary and higher supply chain costs. In contrast, optimized packaging is designed to meet the requirements of your specific supply chain by considering the following factors:

• The right material selection and strength
• The appropriate protective materials, design and application
• Tertiary packaging considerations, including pallet construction, unit load securement and other protective dunnage

Choosing the right package design

With the right types and amounts of packaging materials determined, it’s time to design and engineer the packaging. It impacts every part of your supply chain and demands considerations like:

• Material vendors and their capabilities tie into design factors as much as your own manufacturing expertise. Can your material vendor satisfy the requirements of a package’s design specifications?
• A new package design can affect manufacturing operations. Is it compatible with your current manufacturing process and automation equipment? Would your new packaging requirements allow systems to run at ideal speeds and efficiency levels, or would you need to bring rates down? How will slowing the equipment affect your operating costs?
• Supply chain, warehousing, transportation efficiency and cost can be affected by racy shapes and curves. While they may make your package stand out on the shelf, those unique geometries may impact your transportation expenses. You must ask some hard questions: Is your bold package design optimized across all systems and touchpoints? Does the design create significant air space — wasted volume — in a truck, distribution center or warehouse? In transportation, air space is money lost. Some designs will cost you.

Determining the right product count can lower costs and raise efficiency

Consumer packaged goods (CPG) or even business-to-business (B2B) manufacturers are at the mercy of their customers in their demands for order quantities and case counts. What if you had to ship an 8-count or a 12-count shipper instead of a 6-count pack? How would those adjustments affect your total packaging system cost? Can you fit more product on a pallet and improve the overall cube and therefore product shipping density? These are essential factors when you use truckload or less-than-load (LTL) freight extensively.

Selecting the right amount of protection

Beyond choosing the right level of packaging to avoid damage, effective packaging performance and protection for certain products and situations can have a specific range of requirements. For example:

• Essential barrier protection for food products and pharmaceuticals helps maintain shelf life and protects against oxygen and moisture seepage, among other environmental threats.
• Enhanced shock protection can keep particularly fragile items undamaged despite inopportune impacts.

“Packaging optimization” can seem like a simple term. But, once you start to peel back the layers, the number of details and the engineering involved are starkly evident. Best-in-class packaging systems are conceived to optimize packaging across every supply chain touchpoint from the loading dock to the store shelf or your front step.

Contact us and learn how NTT DATA Supply Chain Consulting’s Packaging Optimization practice will guide you through the packaging engineering process, producing cost-effective, dynamic designs with substantial product protection. Our top supply chain talent, enabled by proven, leading-edge digital assets — tools, methods and content — delivers actionable insights and measurable outcomes to some of today’s largest and most complex supply chains.