The Role of Packaging in Supply Chain Management

If you think back to a few years ago, most people’s understanding of the term packaging was very limited. The image of a packet that contained food products or simply a carton was usually the norm. But the fact of the matter is, the packaging industry as a whole has come a long way since those days. Technology has played no small part in it. The role of packaging has now expanded to ensuring that there is an increased consumer value, which in turn leads to higher returns in the form of better sales.

Another aspect that packaging has expanded and grown to overlap with is the supply chain. Packaging no longer stops at the moment packaging material is created; it has to be efficient enough to ensure the effective movement of products throughout the supply chain. The packaging has to be good enough to be able to protect the product from damage and also allow for easy distribution. You can no longer create bulky packages to protect from damage while hindering the ease of transport and distribution of goods.

The biggest evolution in packaging has come in the marketability of a product. Packaging has become a big part of the appeal to consumers, and as such, the expectation of quality packaging is an expected norm rather than an exception. Packaging has evolved into a key part of creating and sustaining brand identity.

Packaging Technology and Designs

Brand messaging and visual cues have formed a synergy that has forced innovation in the packaging industry. This means that the use of technological innovations has been used to push packaging forward in new and innovative directions. From a physical dimensions standpoint, the ability to use realistic 3D renders and create simulations helps in understanding how a packaged product will sit in store shelves or the homes of consumers. This helps in creating multiple versions of a packaging concept until the right one can be made that meets all client criteria.

From a look and designs perspective, things have moved rapidly in the digital space. Brand messaging has now got to be in sync with the packaging of products. So it is important for the packaging to incorporate important visual cues about brands. Correct labeling and information, artwork and coloring processes are separate parts of packaging that can create logistical challenges.

Packaging and Trade

When it comes to the role of packaging in trade, it often is transported in the form of cargo. When cargo is transported, it is important that the packaging is optimized to fit in with the mode of transport, be it trucks, containers or air transport.

Let us consider that the packaging is inappropriate to the size of pallets used, then there could be a large amount of cargo space wasted. If you consider that a 20% wastage of container space can result in a 4% hike in the price of the product, globally, that’s a monumental failure in terms of packaging. Packaging also plays an important role in handling instructions, labeling and additional product information. The labor handling the product will be informed of handling instructions about the cargo through the information mentioned on the packaging in the cargo. Hence, we can conclude that packaging must, at minimum, fulfill the following needs:

1. Protection - During the international transportation of products as cargo, as well as domestic transportation.

2. Marketing - Attractive or innovative packaging that allows for an element of marketing.

3. Merchandising - Smart placement of merchandising elements within cargo units that are being transported.

4. Value representation - The packaging should take into account the market the product is being sold in and reflect a core aspect of that market’s cultural values

5. Handling - Essential communication on the handling of products in cargo and individually packaged products.

Role of Packaging in Supply Chain Management

Packaging is now a critical component of supply chain management due to the rapid growth of e-commerce, the need to reduce operational costs (especially through transport) and the environmental impact. In a standard supply chain, there is a process of movement of goods. The goods are all contained in packages, and the role that packaging plays is very important from an increase in a company’s efficiency perspective.

More and more, we are seeing businesses considering packaging a crucial part of the overall process. It is a key area that can reduce costs not only through better use of materials, but it can reduce the cost of logistics and add value through improved volumes and safer transportation.

Easy and effective handling and distribution have become a big priority. This means that packaging has to take into account a multitude of factors such as distribution, easy unpacking, return handling, transport logistics and even internal material flows. There is also a general shift towards more environmentally conscious packaging. The idea is to lower the impact on the environment, reduce carbon footprint and again re-use materials that help in recycling packages. As a result, we see more companies transition toward environmental-friendly and sustainable packaging since it has a big impact on the supply chain and its own environmental impact.

The whole purpose of a supply chain is ultimately customer satisfaction. Packaging has a particularly specific role to play in it. It influences so many aspects - the speed of delivery due to package size, the overall logistics cost, and the dependability of products. Within the supply chain, optimizing packaging via barcode labeling is also a factor. Improving the trackability of products through barcode labeling is now a critical upgrade that can affect the supply chain management of businesses. In conclusion, the packaging industry and packaging have evolved into more than simple bags, boxes and cartons. Optimization is still at the center of all the packaging innovation and supply chain management evolution. If you can optimize packaging, it leads to better supply chain costs that result in improved profits for businesses.