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In a Packaging World article, Elisha Tropper, president and CEO of Cambridge Seals Security (CSS), describes how packaging is typically thought of by manufacturers:
An afterthought… for most [manufacturers of industrial products] packaging is not a consideration. They are manufacturers; they are not packagers. They make an industrial product, and industrial products are dropped into boxes. But whether a box is an inch bigger or an inch smaller, what does it matter?
The truth is, it matters a lot. If you want to optimize your supply chain you need to optimize your packaging. This means changing your mindset when it comes to packaging — packaging needs to become an early consideration.
There are several components of packaging. For example, the product itself, the box or container in which the product is placed to sell, and the box or container the items are placed in for shipping. Each of these components are opportunities for optimization.
Package (re)design
A May 2013 industry study by Freedonia forecasts that pallet use in the US will grow 2.4 percent annually to 2.6 billion in 2017. The study also reported that demand for new pallets is expected in increased by 3.5 percent annually to 1.3 billion units.
The International Organization for Standardization sets the standards for pallet size; there are currently six pallet standards. The most common size used in the United States is Grocery Manufacturers pallet, which measures 48 inches by 48 inches. The dimensions of a pallet are not always considered with respect to packaging; this is a costly mistake.
Let's look at an example previously highlighted in Supply Chain Digest. Adalis (now H.B. Fuller Adhesive Coated Solutions) worked with a telecommunications company to redesign their packaging to optimize pallet use. By reducing the size of each unit package by 1.5 inches in one dimension, the company was able to increase the number of units that could fit on the pallet by 150 percent (from 120 to 300 units). The result was a signification reduction packaging (materials) costs and transportation costs.
Product (re)design
Product design or redesign is another way to optimize packaging to optimize your supply chain.
Let's go back to Elisha Tropper. Tropper was the former owner of a packaging convert and his packaging consultancy, T3 Associates, acquired CSS in 2010. When Tropper took over at CSS he challenged the company to take packaging optimization into consideration at the point of product design. The company took the challenge and redesigned the product. A significant reduction in package size and materials usage resulted. According to Trooper: “A standard pallet of our boxes can hold about 120,000 seals, while that same pallet will hold only about 80,000 of our competitor's seals.”
Ikea provides another example, which Colin White outlines in his book Strategic Management. When Ikea first began manufacturing its Bang mug, 864 mugs could fit on a pallet. Ikea redesigned the rim of the mug so as to maximize pallet efficiency — Ikea was able to increase the number of mugs per pallet to 1,280. The company decided it could go further. Another redesign increased the number of mugs per pallet to 2,024. As a result of the product redesign, the company reduced shipping costs by 60 percent.
Outside the box
Ikea has taken packaging optimization for supply chain optimization even further and has created a system called OptiLedge, which eliminates pallet use. Retailers using OptiLedge have realized a savings of been $200 to $300 per container.
Major factors for cost savings include a reduction in man hours to off-load (a savings of between 15 to 23 hours or more of labor per container), space savings (one truckload of OptiLedges would be the equivalent of 23 truckloads of traditional pallets), and weight (OptiLedge weighs under two pounds as compared with the 50 to 75 pounds that a traditional pallet weighs). In addition, OptiLedge eliminates underhang and increases fill rates.
Too often, everyone thinks of packing as the thing that gets thrown away. Smart manufacturers, though, will ensure that good money isn't tossed out with the box or pallet.
Good article. As supply chain is a complex thing addressing many aspects, people do not consider every little link, and the optimization of a link usually saves a lot.
Package means 2 important things: supply chain optimization and customers' satisfaction. Some products packaging are way too troublesome and may take long time for the customer to open it.
@Tam, thanks for this post. It just highlights that this is an incredibly complicated issue. I'm prone to be all for any attempt to address human rights issues. To really be effective, though, we really do have to look at the breadth of the issue.
I am just wondering here that someday everything we buy will have some malicious source attached to its production.
I fail to understand why are we banning the material just because of its spurious source irrespective of how pure or good that mineral is.
Are other industry segments also implementing such regulations or it is just the semiconductor industry that is so fussy about human rights violation?
Tam, like your title, the issues with respect to conflict materials are never ending. We had come across many issues with in the last couple of years with respect to the conflict mineral. But I didn't get why its not get resolved for such a long period. I think the Amazon issue is a new one
“Are other industry segments also implementing such regulations or it is just the semiconductor industry that is so fussy about human rights violation?”
prabhakar, the major issues are with semiconductor industry, where such minerals are using for component manufacturing. In IT industry, pirated copies or cracked versions are major issues
Sorry all but the conflict issue is going seem never-ending especially if nothing is done about it as the trend is for minerals to become more valuable and where there is big demand for a product there will always be someone who wants to profit and does no care about the moral dimension.
Simply put the growth of China and emerging economies means there is going to be more demand for minerals this can already easily be seen in the rise in the goldprice over the last ten years.
http://goldprice.org/gold-price-history.html#10_year_gold_price
http://www.miningweekly.com/article/china-tipped-to-become-global-leader-for-base-metals-demand-2013-10-18
Going to be more demand for lots of metals though and this is likely to become an even bigger factor when the world economy takes off.
Eventually terrorists and anti american organisations will start looking towards profiting from minerals the same way they have profited from the drug trade.
http://www.washingtontimes.com/news/2013/sep/20/terrorist-organizations-still-profit-afghan-drug-t/
It's going to be an increasingly important issue for the whole supply chain and i expect the jewellery industry to start being highlighted more in the future.
http://www.enoughproject.org/blogs/new-report-striking-gold-how-m23-and-its-allies-are-infiltrating-congo%e2%80%99s-gold-trade
Its inevitable that supply chain professional of all kinds are going to be increasingly on the frontline of dealing with the conflict minerals problem generally and globally.
Yes, this looks to be very complex issue. Sprit of this law is very good. However, developed countries and industries should also monitor that their stringent law is not adversely affecting most vulnerable poor in those civil war countries.
In place of current way, can there be more innovative way which help the poor and defeats the bad guys?
“the growth of China and emerging economies means there is going to be more demand for minerals this can already easily be seen in the rise in the goldprice over the last ten years.”
Mathews, you may be right about the rising demand. And sometimes this rising demand can create controversies.
There are some companies, such as Fairphone, that claim to use non-conflict products and work programs in the manufacture of their devices (in Fairphone's case, a smartphone). Yet how many people will pay for a device solely because of this differentiator? I'd argue a device must also be better than — or at least equal to — competitive products in order to reach mass market. Sadly, we've seen that with other products that appeal to consumers' better sides.
@Aison: Yes paying for a device is not a good you if you cannot get all the expected things done out of it. The risk is high and the investment value too maybe high in such scenarios.
@Alison, quite agree. It will still take many more years before consumers start buying products that don't have banned materials. Right now they don't see gains in buying thes products. Its all mfr driven.
The problem is not conflict minerals. The problem is illegal arms dealing by guerrillas. They intercept the mineral route in countries like Colombia and Congo, sell minerals illegally, make money and buy illegal arms and fund their guerrilla warfare. The respective country's armed forces should be tight enough to control such activities. Rules and regulations won't change anything unless somebody takes control of the situation, and that too with force.