The Role of Packaging in Supply Chain Management

role of packaging in supply chain management

Logistical packaging design should be only part of supply chain management.

Moving products around the globe are critical to our economic well-being. In the last few years, we’ve seen what happens when the supply chain is disrupted. While large-scale disruptions make the news, minor disruptions can occur if your packaging is late or products arrive damaged and must be returned. In this post, we will evaluate the role of packaging in supply chain management and the importance of packaging design. When properly executed, logistical packaging design should provide protection throughout the supply chain. But packaging design is only part of supply chain management.

What is Supply Chain Management?

The supply chain is more than logistics or logistics between customers and suppliers. According to Douglas Lambert, Ph.D., former director of the Global Supply Chain Forum, supply chain management is managing and integrating cross-functional relationships across businesses that make up a supply chain network. The supply chain is a network of companies and relationships, and the management involves all corporate business functions across those companies.

An entire supply chain can be quite large, involving all suppliers back to the point of origin -tier one suppliers, tier two, etc., and their suppliers. It moves forward to the point of consumption. There can be thousands of suppliers in a supply chain. It has been said that competition is no longer between companies but between supply chains. Although, the overlapping of supply chains when competitors use the same suppliers makes this statement less than accurate. So, this is where relationships come in. If one company manages relationships better than another, it will likely come out on top.

The Evolving Role of Packaging in Supply Chain Management

When many think of packaging, they think of the box or carton the product is put in to be shipped. The global marketplace has evolved, and the role of packaging has evolved with it. Packaging plays a critical role in the efficiency of logistical systems within the supply chain as well as in providing customer value and maximizing profits. It encompasses a coordinated strategy that is connected to many departments. Some include procurement, marketing, quality, logistics, customer service, and sustainability initiatives.

Procurement – We look to procure raw materials to make high-quality and cost-effective packaging. You want to procure boxes, cartons, and packaging supplies to meet your needs and budget. Your customer may not consider the packaging part of their purchase, but it can influence future purchasing decisions.

Marketing – We are all impacted by product marketing, and packaging is no different. However, marketing may differ from our suppliers and your use of print and graphics to market to your customer. The impact a supplier’s marketing has on the purchaser impacts the purchaser’s customer and on down the line.

Quality – The corrugated board, inks, glue, and all raw materials used in packaging must meet our quality expectations. You will have quality expectations for the packaging you buy. While your retail customers may have quality specs, there is no written spec if you ship directly to customers. Still, there is an expectation that the packaging will be sufficient to get the product delivered safely. If your customers aren’t happy, you may need to change your specs, which could impact ours.

Logistics – No matter where you fall in the supply chain, packaging is essential to moving products safely from point A to point B.

Customer Service – Customer service can also have a trickle-down impact. This is why relationship building is essential. If we don’t maintain relationships with our suppliers and customers, poor service from our suppliers could mean a delay in your receiving packaging, which could mean a delay in your customer getting its products. Developing relationships and communication is a critical component of the packaging supply chain.

Sustainability – Consumers and corporations alike are more concerned with sustainability now than ever. Preserving and maintaining forests is essential for our business, just as recycling and using recycled materials. Sustainability or corrugated packaging resonates with many packaging end-users, which could impact your packaging purchases.

Logistical Packaging Design Should Help with Supply Chain Efficiency

Corrugated packaging plays a critical role in supply chain efficiency. Poor packaging will reduce efficiency, while optimized and logistical packaging design should make it easier for products to move through the supply chain.

As part of the supply chain, packaging must be designed with specific considerations in mind that include the product, packaging materials, packaging lines, distribution, and marketing:

  • What are the product characteristics (e.g., fragile, heavy, sharp edges, refrigeration, number per box, value)
  • What environments will the packaging be exposed to?
  • What packaging and internal materials can be used to ensure safe transport?
  • How is it expected to work within your packaging line?
  • How are products moving through the supply chain (e.g., pallets, cargo ships, shipping carriers)?
  • How will the product be marketed, and how does the packaging reflect this?

By answering these questions, the packaging designer can ensure your custom packaging is up for the challenges it will encounter as it efficiently moves through the supply chain.

Overcome Supply Chain Challenges with Axis

Supply chain management can be tricky. Optimizing supply chain management can positively impact your business by increasing cash flow, maximizing resources, and improving the operational efficiency from procurement until the end user receives your product. As the supply chain becomes more robust, you must ensure relationships are developed with trusted suppliers.

When you enter a relationship with us, we are committed to providing you with an exceptional experience through cost-saving suggestions for packaging optimization, SKU management, and supply chain management. We understand that meeting your packaging needs requires collaboration between all departments involved, excellent communication, and transparency. Protecting your supply chain protects ours, so we treat each customer as an extension of our business. When you succeed, we succeed.

Contact us to strengthen your supply chain with a supplier committed to providing the packaging you need when you need it.