Without an integrated packaging policy, there is a risk of inefficiency, unnecessary costs and quality issues in the supply chain. Packaging management must therefore be strategically incorporated from the outset in order to maintain value and ensure continuity.
Summary of this article
Packaging is often seen as a practical part of the logistics process, but the choices made in this area affect the entire supply chain. When packaging specifications are missing or responsibilities have not been clearly defined, suppliers may each choose their own solution. This leads to unnecessary repacking, higher costs, delays and risks to product quality.
Effective packaging management therefore does not begin when a product is packed. It requires clear agreements, an understanding of every application of a product and one integrated approach across the entire supply chain. A real-world example from the aerospace industry demonstrates what can happen when such an approach is missing.
Some time ago, I met the owner of a machine factory that supplies a major aircraft manufacturer indirectly, as a second-tier supplier. He enthusiastically told me about a large order he had secured. His machine factory, a small business with five employees, had been asked to manufacture a special type of bolt used in the landing gear drive system. The landing gear systems are manufactured by the aircraft manufacturer’s direct, first-tier suppliers. The bolts are also kept in stock at the aircraft manufacturer’s Repair Center and warehouses.
Unfortunately, the owner of the machine factory did not receive any logistics specifications with the order. He asked questions, but his customer, the first-tier supplier, simply replied: “I don’t know. The aircraft manufacturer didn’t tell us anything about it, so you’ll have to sort it out yourself.” With the best of intentions, the metalworking company selected the packaging and labelling solution it considered most suitable.
The machine factory decided to package the bolts in quantities of ten. This was very convenient for the first-tier supplier, which preferred to receive products in bulk packaging for the assembly process. However, the same supplier also had to deliver the bolts as spare parts, in which case they needed to be individually packaged. The obvious question was: who would take care of this, and what type of box should be used?
The issue could once again be left to the first-tier supplier. Alternatively, the OEM could choose to repack the products upon arrival, as is very often the case. The latter option would at least allow the OEM to maintain some control over its packaging policy. Nevertheless, this would still be a missed opportunity. The problem could have been resolved much earlier in the supply chain if the OEM had clearly specified its requirements and communicated them throughout the chain.
In this particular case, the consequences of the bolts being packed in the wrong box may be relatively limited. But what happens when requirements involve cleanliness, electrostatic discharge protection, humidity, salt water exposure or even sterility? When packaging is left to chance in these situations, it will not take long before something goes seriously wrong.
This example illustrates the risks faced by an OEM that lacks an integrated supply chain approach or a clear packaging policy. The main reason is that no one has overall responsibility for the process. As a result, packaging quietly becomes a source of value loss. Every organisation should give greater strategic priority to effective and integrated packaging management.
For many companies, developing an integrated packaging management strategy is not a priority. After all, packaging is not their core business. I therefore expect companies to collaborate differently in the future. Just as logistics can be outsourced to a fourth-party logistics provider, or 4PL, such as Maersk, packaging can be fully outsourced to a fourth-party packaging provider, or 4PP, such as Faes.
As a 4PP provider, Faes takes overall responsibility for packaging throughout the supply chain, ensuring that these types of packaging problems become a thing of the past. Naturally, this requires a far-reaching form of collaboration based entirely on partnership and trust. As your packaging partner, we do everything possible to optimise your packaging process. To achieve this, however, we need full insight into that process.
This was just one example of what can go wrong with packaging. In the white paper available for download below, we highlight four more examples of common packaging problems.
Johan Faes is founder and CEO of Faes. His vision for innovation, sustainability and supply chain collaboration is leading the company into a future as a 4PP partner for the manufacturing industry. His contributions share insights on strategy, leadership and the power of packaging as a process.
More articles by Johan FaesGood packaging doesn’t just happen by chance. Using a tried-and-tested approach, our specialists guide you step by step from the initial idea to the finished product.
