THE WASTE
OF PACKAGING
LOGISTICS AND PRODUCT PACKAGING
If you were to ask the average logistician the last time he or she had given any thought to product packaging, the answer would probably first be preceded by a long pause and would then result in a reply of “I don’t know” or “I’ve never thought about it.” Packaging is often considered a given in terms of quantity pack and design, and concern is usually only directed to the cost of the packaging. “Packaging” is a broad term that refers to all forms of containerization at the item and bundle levels. It includes outer packaging for an item as well as the dunnage that secures an item within a package. It applies to bundles of items in cartons and cases as well as the platforms used for shipping and conveyance, like conventional wood pallets, totes, and racks.
Packaging is an often overlooked resource in logistics. Its importance is eagerly recognized by marketers of consumer goods. The packaging must have appeal to attract potential buyers and contain necessary information to satisfy regulators. All you have to do is walk down any grocery store aisle to see the emphasis placed on packaging. Have you ever seen anything as colorful or splendid as the breakfast cereal aisle? But not all logisticians give packaging the same credence when it comes to product protection, handling and storage efficiency, handler safety and ergonomics, postuse disposal, and communication of necessary handling information. And the fact is that packaging is a critical part of any implementation of Lean operations.
Packaging is important to the logistician for several reasons. First, the package represents the fundamental physical unit of analysis within the logistics system. In fact, logistics system design begins with the packaging file that documents the dimensions and capacity of all packages that flow through a company’s facilities. Second, packaging is important for the many different ways in which it influences and is influenced by the logistics and manufacturing activities, not only within a company but also with suppliers and customers.
PACKAGING AS A SOURCE OF WASTE
Table 7.1 illustrates the relationship between product packaging and a host of operations activities. Perhaps the most obvious connection between product packaging and the creation of waste is found when packaging fails to protect its contents adequately, subjecting the goods to inordinate abuse and creating the waste of damaged goods. This tends to be a logistician’s primary concern with packaging, along with the cost. When the acquisition cost of the packaging exceeds its demonstrated value, then waste also is found in such investment. However, buying cheap materials can fail to ensure the integrity of the goods and suggests that a delicate balance exists. Finding the right packaging design is critical. Some companies dedicate considerable resources in this search, but many others assume it away or conduct studies infrequently, failing to keep up with not only changing needs of products and their handling procedures, but also the innovation found in packaging design and engineering.
Consideration of the product packaging’s dimensions and holding capacity is critical too. Packaging that can hold more contents safely within a smaller space (contained space) leads to improved material handling efficiency, gains in vehicle cube (weight and space utilization), and efficient warehouse space utilization. Clearly, the point here is that gains are not achieved when products are simply “stuffed” into a smaller box or great effort is required to fill and recover items from crammed boxes. Rather, the packaging design should consider
Table 7.1. The Impacts of Packaging on Operations.
the efficiencies that can be gained by better utilizing the space within the container to reserve handling effort and to save space in the transportation vehicle and warehouse.
Closely linked to the holding capacity of the container are the ergonomics involved with packing, handling, and unpacking the container. How difficult is it to pack, lift, carry, lower, unpack, and dispose of the container? This question should consider not only the ergonomic implications within your own operation but all parties that will come into contact with the container, including customers and logistics service providers. Can one person safely carry the container, does it require a duo, or is mechanized equipment required? Is the packaging safe and easy to open? Can the contents be removed from the container quickly or does the product or worker become subject to potential injury in the motion? These considerations point yet again to the need to find harmony and balance among many competing factors in determining proper packaging design. Stuffing many items into a box can improve the utilization of space but impair the ergonomics of using the container.
PACKAGING AS A WASTE
Clearly, poor or inappropriate packaging can lead to wastes in a wide variety of ways in an operation, yet we must recognize that the packaging itself can represent a huge source of waste. The fact is that whether you are talking about consumer packaging, corrugated boxes, or hardwood pallets, much (if not most) packaging is used only once and then disposed into the solid waste stream. Not only does this contribute to a negative environmental impact, but it also creates costs — costs that are often significant but viewed simply as necessary costs of doing business. Additional costs might be tacked on in the form of fines or penalties for excess packaging.
Careful review has led many companies and entire industries to adopt packaging that can be reused, returned, or recycled. Reusable packaging refers to containers and pallets that are intended for single use (i.e., viewed as expendable), but gathered and recirculated for additional uses with little or no repairs or reconditioning. Returnable packaging refers to containers, totes, racks, and pallets that are designed for long life and multiple uses. Recyclable packaging refers to materials that typically are used once but can be reconditioned or broken down and used as input for subsequent packaging material in place of virgin resources.*
PACKAGING AS A VISUAL CONTROL
A less obvious way that packaging can create waste is in failing to capitalize on its ability to convey what is happening in the supply chain. Packaging can be a critical source of visual control. Lean manufacturers revolutionized the use of returnable containers. These manufacturers have found that the use of returnable containers not only provides for improved product protection, improved environmental impact, and lower disposal costs over expendable packaging, but that the colorful returnable totes serve as an important signal of supply chain activity.
Today, many manufacturing operations in North America are virtually free of expendable packaging. However, the occasional shipment can show up at these plants in the old standard, corrugated box. The appearance of corrugated packaging serves as an important message that something is awry in the system. One of three possible things has happened: (1) the supplier has procured too few containers to handle the required volume at the plant, (2) the returnable containers have failed to make their way back to the rightful supplier that needs the totes for subsequent use, or (3) the supplier has built parts in advance of the need, outpacing the kanban demand for the parts.
In the first case, the manufacturer would run the numbers again and determine if additional containers were, in fact, justified. In the second instance, the flow of containers would be studied to determine if there was a bottleneck line side, in the so-called “returns land” where containers are temporarily gathered and sorted for return to the supplier, or if there was a misallocation problem in delivering the totes to the rightful supplier. Finally, in the third instance, the manufacturer would inquire as to why production of parts outpaced demand, pointing to the costs of holding the excess inventory and the risk of building in larger batches than called for in the final product. In any regard, the manufacturer knows that the system is failing when corrugated packaging touches the receiving dock.
So, while packaging may represent an afterthought in many operations, it can represent a considerable opportunity for damage prevention, improved flow and efficiency, material waste reduction, and cost savings and act as a critical eye on the operations of the supply chain. In most businesses, more focus can and should be directed to the packaging resource that is both necessary to support the business and also an opportunity to improve the business.
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