Chapter 12: Packaging and containerisation - outline Packaging has been in existence ever since people started storing and transporting goods. The modern supply chain cannot function without some form of packaging or containerisation. Packaging has to contribute to efficiency and effectiveness in the supply chain. Technology can play a role in further enhancing the value of packaging and containerisation. The effect of packaging on the environment must be taken into account and minimised where possible. Packaging decisions should be systemic to ensure that an integrated logistics and supply chain approach is followed.

Learning outcomes While studying this chapter, make sure that you focus on: the logistics functions of packaging; the benefits of using packaging; the cost and service trade-offs of using packaging; factors involved in the development of packaging; similarities and differences between containers and unit loading devices (ULDs); the integration of technology with packaging; and the benefits of technology and packaging integration.

Definition and functions of packaging Definition: see p. 267 A combination of art, technology and material Functions of packaging: Apportion Contain Protect/serve Unitise Transport Inform/sell

Definition and functions of packaging (continued) Levels of packaging: Primary Secondary Unit load Distribution Application: What level of packaging is involved in a box of cereal? What level of packaging is involved in a case of beer?

Benefits of packaging Benefits vary according to type of packaging and can include: Preservation Information and instruction Convenience Innovation Waste minimisation Hygiene and safety

Role of packaging in logistics Warehousing and materials handling Storage and handling Space utilisation Transport Air: minimise size and weight, but withstand pressures Road and rail: stackability and maximised space utilisation Ocean: harsh environmental conditions Trade-offs See Table 12.1 (p. 271)

Packaging and marketing Packaging plays a role in the four ‘P’s of marketing: Product Place Price Promotion POP packaging: Logistics function secondary to marketing function Conveys impressions and ideas through packaging (differentiation)

Development of packaging solutions Various factors influence packaging design, including: Consumer requirements Physical form and nature of packaging Logistics requirements Packaging materials: Types: wood; paper/cardboard; glass; metal; plastic Choice is influenced by strengths of different materials Rising raw material costs and environmental concerns are driving packaging industry towards greater efficiency

Development of packaging solutions (continued) Palletisation Designed to facilitate storage and transportation Pallet types – see p. 273 Pallet pattern design important, but often neglected Bulk-packaging systems Containment of large volumes Various materials can be used depending on product and supply chain requirements Most commonly used systems: bags; corrugated cardboard; metal; rigid plastics; wood Factors to take into account during design – see p. 275

Development of packaging solutions (continued) Cost trade-offs Total packaging cost vs higher sales and savings elsewhere. Legislation Places compliance requirements on manufacturers of both packaging and products, as well as retailers. The environment Use life-cycle assessment (LCA) to evaluate potential environmental impact of various packaging options. Reuse and recycle as much as possible.

Containerisation System for intermodal freight movement ISO containers: - Standardised size, fitting and reinforcement - Types of containers – see pp. 277– 9 Smart containers integrate technology to sense and report. ULDs are special types of airfreight containers or pallets.

Integrating technology with packaging and containerisation Bar codes Represent information for machine ‘reading’ Layout types: 1-D and 2-D (stacked and matrix) Bar code systems: UPC & EAN RFID Automatic identification Integrated circuit / microchip and antenna Active vs. passive tags Multi-technology integration

Supply chain perspective of packaging Manage packaging as interdependent component Packaging design influences efficiency and effectiveness of entire supply chain Consider requirements of all partners in a supply chain Lack of conformity due to insufficient information flow Sub-optimisation can lead to increased costs upstream or downstream in supply chain Environmentally-friendly packaging requires co-operation