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Why a Coordinated Supply Chain is Essential for the Packaging Industry

Recycling Packaging Material Paper Cardboard Bottles Plastic Glass PictureThere is no doubt that the packaging industry is a complex spider’s web of intertwined uses across a broad spectrum of subsections. However, environmental issues and new material developments are becoming big drivers of growth right across this complicated industry.

While the focus is on materials and processes, the reality is that protecting the product from damage or spoilage is far more important from an environmental perspective.

Issues such as the carbon footprint of the delivery, biodegradability of the material, reuse and composting also need to be considered. The result is a very complicated picture, and the industry has the difficult task of addressing the consumer’s perspective as best as it can while still ensuring that its own business cycle is improving.

The biggest change in the packaging industry is the migration from traditional packaging materials to new generation materials, which are predominantly next generation polymers and composites.

Flexible packaging enables customization of a unique product, whereas traditional packaging does not. As a result, we are seeing a move from glass and metal to rigid plastic, or even from rigid plastic to flexible plastic.

This means that in today’s fiercely competitive market, packaging organizations are compelled to focus on the following factors:

  • Cost is paramount – Therefore cost control becomes paramount, which in turn requires cost control of each manufacturing process.
  • Innovation – The rapid changes in technology need to be monitored and carefully assessed.
  • New product development – A formal process to regularly refresh and improve product lines.
  • Quality Control and Quality Assurance – With the rapid changes, everything bought-in or made in-house has to be right first time.
  • Planning – With many different variants being made simultaneously, the planning process must be robust and ensure that the deadlines are met.
  • Inventory control – For raw materials, WIP and finished goods must be well controlled and not excessive.

Without a carefully coordinated supply chain monitoring all the key indicators, achieving this is highly challenging.

The growth of local markets into regional markets and eventually global markets highlights the need for integrated packaging solutions. This will in turn demand a thorough new product development and deployment process as well as total control over the supply chain. As the rate of change increases, tighter controls are needed on the supply chain.

As the consumer market becomes more responsive to packaging, manufacturers have an opportunity to use packaging to differentiate their brands.

To address these trends, organizations will have to be carefully prepared and well aware of market changes. Organizations have to manage their internal environments more carefully than ever before while also shaping their external environments. While the consumer dictates what they believe is important, and bearing in mind that brand loyalty is on the decline, organizations have to take full

control of their own destiny by carefully offering what the consumer wants without over-committing into a single market or technology.

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