packaging in supply chain management

Understanding the Role of Packaging in Supply Chain Management

Product packaging is more important than some might think. As a brand owner, you want your products to be enclosed in a sturdy material that looks good and gets your customers excited about receiving them. Proper packaging can help ensure that your business operations run smoothly—from the order processing to your customer’s hands.

The departments involved in packaging go beyond design. Production, procurement, and distribution each play their own part in the process. These are all important aspects of packaging you may consider.

In both B2B and B2C environments, packaging can play a crucial role in the product’s supply chain. This article walks through supply chain management and how optimizing the entire packaging process can positively affect the efficiency of your brand’s business. 

What is Supply Chain Management?

Supply chain management is the process of facilitating the movement of goods and services. This includes taking raw materials or goods and turning them into finished products. Supply chain activities encompass product development, sourcing, manufacturing, logistics, and tracking.

Optimized supply chain activities should manage product packaging efficiently, affordably, and with little to no error. A streamlined supply chain can minimize businesses’ costs and boost productivity in the production cycle, while a poor supply chain process can negatively impact ROI and customer satisfaction.

The General Supply Chain Management Flow

The supply chain management process is often arranged in five workflows: procurement, material management, manufacturing and production, order management, and distribution. 

1. Procurement

This step involves the sourcing and purchasing of raw materials needed to create the packaging from vendors. Using flowcharts to refine the procurement workflow helps prevent duplicate supplier research.

Key processes: purchase order processing, receipt confirmation, and invoice verification

2. Material management

Material management is the process of ensuring that there are sufficient and necessary components available and ready for use during manufacturing and production.

Key processes: acquisition, inspection, inventory management, identifying gaps, and purchasing missing or remaining items 

3. Manufacturing and production

This step assigns production orders and schedules manufacturing execution in specific sequences and time frames in the middle of the supply chain. A carefully planned flow chart for this step can decrease lead times.

Key processes: production planning, scheduling, and quality control

4. Order management

This step covers the collection, validation, and documentation of all information required to fulfill and process customer orders. Proper and efficient customer data management can minimize order errors, speed up the distribution process, and enhance customer happiness.

Key processes: sales order processing and billing process

5. Distribution

The distribution process involves coordinating orders, inventory and warehouse management, and delivering the products or goods to the customers. An optimized distribution process can decrease order errors and improve inventory location accuracy.

Key processes: transportation planning, execution, and costing

The efficient manufacturing and distribution of products are directly associated with excellent packaging systems. Packaging protects goods from external damage and showcases their quality, allowing for reliable transportation. 

The Importance of Packaging in Supply Chain Management

Brands should see packaging as a vital component in enabling a smooth-running supply chain. Packaging, as a protective carrier, is critical to the production, sales, marketing, and distribution of products or goods, making packaging a vital part of the overall process.

In a typical supply chain management workflow, product packaging safeguards the finished products as they move across the entire process, especially during transport to retailers and the final destination. While every business has its own checklist of packaging requirements and functions, packaging systems must be connected in all aspects of the process for a successful supply chain.

Product packaging has many functions that address specific challenges in the supply chain, including the following:

  • Protective function: The packaging must safeguard the goods from external factors and ensure that products survive handling during transportation.
  • Storage function: Since the products can travel and be contained in multiple locations before reaching the final destination, the packaging should use materials that allow convenient storage while meeting storage requirements. 
  • Transport function: Proper and efficient packaging design enables easy handling, stowing, and stacking during transportation in a way that maximizes the space available.
  • Tertiary function: This refers to the extra protective carrier that safeguards the secondary and primary packaging of the goods. It also has an organizational purpose—grouping individual products into one box. It’s better to use eco-friendly materials for this additional packaging, especially since more customers expect businesses to be more environmentally conscious and responsible.

Below are some of the factors that contribute to efficient supply chain management:

  • Weight of the packaging: Weight and mass pose significant challenges to the costs of logistics. That’s why it’s more strategic to develop a protective primary, secondary, and tertiary packaging that adequately protects the item, doesn’t take up too much space and weight, and is easy to handle and transport. 
  • Sustainability: Consumers are becoming increasingly mindful of their purchases for the benefit of the environment. Packaging that reduces the materials used and is reusable can minimize costs and cut the lead time in procurement. 
  • Waste prevention: Eliminating any needless movement to fulfill an operation, such as piling products and reloading, can enhance operations. The recycling or reusing of packages sent back by the customer or as leftovers from previous steps can be utilized for the next shipment, cutting costs and waste significantly. 
  • Simplified packaging solutions: Some businesses can use the same size and packaging format for all their products, eliminating the complexity of their packaging process. While this may not apply to companies that offer various goods, studying the best packaging that balances the complexity and efficiency of your packaging process can significantly reduce wasted space and waiting time in supply chain management. 

With a greater understanding of the importance of packaging in the supply chain, it’s crucial to develop a functional design that considers the production, logistics, and marketing of your products, as well as the expectations and needs of end users.

Making even minor improvements in your packaging design can make a world of difference in production operations and costs. As a business owner, it’s essential that you continuously look into ways and opportunities to improve your supply chain management to refine your processes.

Optimizing the Packaging Production Process for Smooth Operations

Businesses can minimize costs, improve profitability, and enhance transportation efficiency by being strategic and smart with packaging. 

1. Decrease the weight of packaging materials

Weight determines the number of pallets needed per truck for transport. Weight-efficient packaging allows businesses to move many products without sacrificing protection. Lightweight packaging also helps lower shipment costs.

Ensure that your product’s packaging is designed to be carried and transported easily. A well-engineered packaging structure makes it easier for employees to move the products around, prioritizes warehouse safety, and protects your brand’s inventory.

2. Manage redundancy in produced packaging

Make sure to request the exact packaging quantities needed for your production orders. There should only be a small percentage of what goes beyond the margin to cover production errors and minimize waste.

3. Source the right raw materials

The process of procuring and processing raw materials varies depending on the product. Knowing the ins and outs of every step in the workflow and identifying the materials needed for the packaging can eliminate delays in the operation.

4. Optimize the production and printing process

Packaging design is crucial for an optimized production process. Design aspects such as identification, barcodes, hazard cautions, instruction, and other relevant information should be displayed appropriately and easily spotted. 

It’s also imperative to finalize the design and ensure all necessary information is included to avoid any last-minute design changes that could negatively affect the production and printing process.

5. Manage transportation costs effectively

The costs involved in transportation covers from manufacturer to distributors and activities involved during handling and storage. Choosing a more efficient packaging format can reduce the costs of handling, storage, and transportation of products, whether by land, sea, or air.

When you start to implement lean thinking from the top of your packaging production (e.g., decreased materials) in the supply chain, you can save more in the final costs of transportation and handling of the goods. Managing transportation costs is crucial for businesses working within a budget. 

Get the Most Out of Your Packaging 

An optimized supply chain management in packaging can increase a business’s cash flow, maximize resources and time in the production cycle, improve the overall efficiency of the process, and make the operation smoother from the procurement stage to the time the products reach the end-user.

Efficient packaging is a collaboration between all departments involved. If you’re planning to enhance your supply chain management and develop more strategic packaging in your process, Meyers Printing can give you a hand. Reach out to trusted experts from Meyers Printing to better understand what your business needs. 

Let us help you visualize the best packaging design for your products with professional printing solutions.