Attractive, shining, nicely packed waiting on shelves for shoppers to buy, a lot of effort to make the packaging of all the nice, little things we buy, so attractive, so commercially desirable…
On the other hand, when I look in the factory, industrial packaging is not really nice. But of course, in contrast with the commercial packaging designed to be the ariergard of the marketing, to speak about the product, to sell at a “glance”, the industrial packaging has a more mundane role, to protect the quality of the product during transportation.
So, if I compare the effort companies put into designing good, marketing viable packaging for the commercial use and the effort into creating, validating a packaging for industrial purposes, it is obvious that the last one shall be significantly less.
Even so, sometimes companies tend to almost allocate “0” effort to design, validate a good industrial packaging for their products. They simply copy an old design… maybe because it is not a big financial gain, or simply not enough resources allocated.
What is a good Industrial packaging? What are the key expectations?
And the list can go on…
What about the money? How much does this packaging cost? Well, I would say that it can go up to 5% in some rare cases, but typically it is between 0,01 % and 1 % of the manufacturing cost.
Can packaging influence other costs?
YES – typically the transport cost, the waste management cost, storage cost, internal handling cost, quality control cost….
Now, these are real big cost drivers in the companies, going up to 5% even 10% from the total cost….
So good packaging or bad packaging makes a real big difference not as much as direct cost driver but in a strong correlation with the above mentioned costs.
From my experience, a good design of packaging can bring up to 0,5 % profit to your company P&L.
Does it make sense to care about your packaging concept? No?
So, how can we have a good packaging?
I can share from my experience in this matter:
1 Packaging is as important as the product. When you request a validation for the product be ready to request the validation for the packaging you will use as well.
2 If you propose a returnable packaging / make sure that / from the beginning you will propose a one way alternative packaging to the customer (in fact, my recommendation is to mandatory validate a one way in all cases, even if your customer does not request). General conditions for the returnable (clean returnable ,who shall clean it and when) need to be clarified.
3 Number of returnable in the loop and the constant and consistent revision of this loop will keep you out of trouble and with the money in the pocket. Make sure that the contract with the customer or suppliers in regards to the nr of returnable in the loop is well known in the organization. (as well as how often you need to make the reconciliation on the customer portal…for the returnable packaging, and when a change occur – this loop must be recalibrated!)
4 To achieve from the start a good product density – do not rely only on the CAD design, where you can estimate the necessary packaging size and shape – use a 3D model of your product and your packaging to simulate the packaging process of your product – it is not a big cost and now 3D printers are available! Pack with your hand / can be different and helpful to see the result and take the time for this operation! – you can always show live the concept to your customer.
5 Environmental impact! – Understand one way vs returnable. Transport is also generating CO2! It can be a good practice to use the same packaging you have received from the suppliers and pack and ship to your customers. Re-use can be a good solution! (You may already do this for the pallets, why not for boxes from your suppliers, use them…). Plastic bags – can be a problem – try as much to avoid at least not to have 2 bags in the same box… (it happens a lot :)) )
6 Problems can occur during the lifetime of your product and usually this means customers’ complaints. As result, it is very easy (common sense) to add different layers of protections over the existing one, over protections, cost you money and effort – Put the effort in the proper problem solving process! Understand where it is used by the customer and what he wants!
7 Do not rely only on the suppliers to take care of the packaging for their products. Your cost of handling can go up…. and as well as storing, transport ….Be active and ask to see (as your customer may ask you) how they will pack – include the packaging validation in the PPAP process as well and check from time to time the conformity from this point of view. Proper packaging will help a lot in the internal logistics process…Standard packaging specification will help – but please do not assume that they will solve all the problems.
8 All the things can be improved – so the packaging can be improved as well – do not consider that packaging is for ever during the life span of the product….. It can come from customer, internal suggestions or from suppliers. Good companies do not wait … they request improvements from the suppliers (from time to time) and in the same time a good continuous improved mindset internally. The change management process, if well applied, will make sure that the changes in this area will not affect the quality and will be properly validated.
9 Not many are doing this… but – share (sell) your unwanted packaging with other companies/ your neighbor can use it. The recycling of the paper, plastic, wood, metal can happen later and in this way the amount of packaging will decrease on the market as well as the burden they represent on the environment .
10 Control your packaging – control your stock, your waste, your transport, in general make sure that all people in your company understand the impact and actively contribute to a better environment and in the end to a positive P&L in the company
Industrial packaging – Engage! – as long as we do not use a teleport device to move your products, packaging will make a difference in your company….don’t miss out on this challenge!
Trick-or-treating or better Share !