The Role of Packaging in Supply Chain Management

by Marvin Magasura | November 9, 2017

The packaging industry is evolving. We now know that packaging no longer refers to a box or a carton, but rather to a coordinated system of preparing goods for safe, cost-effective, and efficient movement throughout the whole supply chain that eventually leads to maximizing consumer value, sales and hence profits.

This means packaging also plays an integral role in supply chain management. It protects products from damage, allows for their efficient distribution, communicates to the consumers, and is one of the major product promoters in a competitive marketplace. In fact, packaging design has recently developed into a mature communication discipline on its own – and clients now realize that packaging is a critical and central element in the creation of an effective brand identity.

In order to achieve a successful supply chain management, packaging systems have to be connected with aspects of marketing, logistics, productions, and the environment.

Logistics demands for packages that can be easily handled throughout all processes and for the consumers. Marketing, on the other hand, requires for appealing packages that can engage costumers. Production usually demands for one size of packaging for all types of products to minimize time and labor costs. Good packages can satisfy all these aspects while also fulfilling consumers’ expectations to create the desire to try the product.

Market, Flow, and Environment

The aspects mentioned before – and a few others – can summarize the packaging system into three primary functions that interact with each other in supply chain management: market, flow, and environment.

The market function is fundamental to the packaging system and takes into account things like layout, design, communication, and ergonomic aspects that add to the product and brand’s value. Its whole purpose it’s to satisfy consumers and increase sales.

In recent decades, the connection between marketing and packaging has been deeply analyzed by several studies, most of them founding packaging as an instrumental part of marketing campaigns that can influence aspects like consumer attention, product positioning, evaluation and categorization, usage behavior, brand communication, and intention to purchase.

In other words, packaging plays the role of an interface between consumers and brand owners, and can genuinely alter the impression of the product’s quality.

The flow function takes into account all the packaging features that contribute to the easy handling in distribution. This function includes internal material flows, packaging logistics, distributions, disposal, unpacking, and return handling.

In recent years, packaging logistic has become a new discipline that gained attention over the strategic role of logistics in boosting competitive advantage by the scientific and industrial community, although both science and industry attribute different maturity degrees to the subject depending on the culture and region.

The new concept of packaging logistics is now focusing on the synergy achieved by mixing packaging and logistics systems with the efficiency and effectiveness of supply chain management through the improvement of both logistic and packaging activities. In other words, it is the relationship and interaction between packaging and logistic systems that increase add-on values on the complete supply chain, from raw material producers to the disposal of empty packages by recycling, landfill, or incineration.

Yet in current operational environments, these innovations must also take into consideration not only the market and flow functions but also an equally important and increasingly emerging factor: the environmental function. It aims to lower the negative impact of the packaging system over the environment by focusing on issues like using fewer inputs while achieving the same outputs and the re-use of materials and facilitating packaging recycling in supply chain management.

In fact, an increasing number of businesses are now choosing environmentally friendly approaches and techniques since it became clear that the packaging system has a substantial influence over the environmental aspect of the supply chain.

Enhanced Labeling and Traceability

The primary goal of supply chain management has always been achieving customer satisfaction; however, we have to keep in mind multiple variables can obstruct this process. Packaging, in particular, can affect a product’s dependability, quality, speed, costs, and flexibility, while also having an impact on its life cycle. For companies trying to optimize all the factors that play a prominent role in their supply chain, barcode label software might be the answer.

Enhancing product traceability is one of the critical improvements any company can make in their supply chain management. Traceability integrates inventory, transportation, and manufacturing while affecting the overall cost. For a long-term customer satisfaction strategy focused on product packaging, companies need to enhance their traceability and deliver such improvements to customers through supply chain labeling and packaging.

GlobalVision’s barcode inspection software comes as an ally to companies with barcode traceability systems already in place. It allows for the automatic inspection and grading of both digital artwork and print. The software uses a state-of-the-art recognition system that also ensures all barcodes are compliant with ISO 15415/15416 and ANSI standards and delivers barcode inspection reports that let you know about possible adjustments.

As we tear down the layers between the creation of a product and its ultimate sale, the importance of traceability and labeling in the supply chain become readily apparent. Increased costs of supply chain management will end up being paid by the consumer, while traceability and labeling improvements, on the other hand, might even enhance sales through packaging enhancement. All of these demonstrates value to customers.

Furthermore, packaging options are continually evolving, with new labeling and material options specifically developed to boost customer engagement and increase the overall packaging quality. These too have an impact on user experience and ultimately the sale of a product. To maintain business growth, companies ought to focus on bringing their supply chain management, labeling, and traceability needs into alignment.

Conclusion

Packaging today involves far more than boxes and bags, but even though there has been an incredible revolution in the industry, packaging optimization still needs to be at the center of all efforts leading to supply chain management enhancements.

Countless marketing studies over the years have concluded that optimized packaging will actually deliver results in many aspects of the supply chain. It can increase product efficiency, smooth the handling of materials at the production floor, ensure the efficient use of modern supply chain technology like stackers and pallets, creates better operational activities at both the warehouse and the plant, and makes for an easier damage control process, inventory management, cycle counts, and space usage.

Simply put, packaging optimization enhances the overall supply chain cost optimization and leads to a maximized return on investment.

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