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.
Johan Faes
•4 minutes reading time
•10 October 2024
Some time ago I came into contact with the owner of a machine shop that supplies indirectly (as a 2nd tier supplier) to a major aircraft manufacturer. He enthusiastically told me about a large order he had won. The machine shop, a small company of 5 people, had been asked to make a special type of bolts to be placed in the landing gear drive system. These landing gear bolts are made by direct suppliers (1st tier suppliers) of the aircraft manufacturer. The bolts are additionally stocked in the "Repair Center" and in the aircraft manufacturer's department stores.
Unfortunately, the owner of the machine shop did not receive logistics specifications with his order. He asked questions, but his customer (the 1st tier supplier) only replied, “I don’t know, they didn’t say anything about that at the aircraft manufacturer, you take care of it.” With all the best intentions, the metallurgist chose the packaging and associated labeling that seemed best to him.
The machine factory had chosen to pack the bolts by 10. Very convenient for the 1st tier supplier, because during assembly he prefers products that are packed in bulk. However, the same supplier has to deliver the bolts as spare parts and then they should be packed single. Big question is: who is going to do that and what kind of box should the product come in?
Again, you could leave the question to the 1st tier supplier, or you choose (as very often happens) to start repacking things as they come in as OEMs. The latter way, you could give some direction to your packaging policy. Still, a missed opportunity, because you could have solved this problem much earlier in the chain by being clear as an OEM in exactly what you want and informing the chain about it!
Now in this case it might not be too bad if the bolts are not in the right box, but what if you have to deal with things like cleanliness, ESD, humidity, salt water and possibly sterility? If you leave packaging to fate in those cases, you really don’t have to wait long before things go seriously wrong.
This is an example that shows the risks an OEM runs without an integrated supply chain approach or policy on packaging. The main reason for this is that no one has over-all process responsibility. As a result, packaging remains an unnoticed value drain. In every organization, the strategic importance of sound and integrated packaging management should come to the fore more often.
For many companies, establishing such integral packaging management is not a priority at all; after all, packaging is not a core business for them. In the future, therefore, I expect companies to cooperate with each other differently. Just as logistics is outsourced to a 4PL’er (4th Party Logistics, such as Maersk), packaging can be completely outsourced to a 4PP’er, a 4th Party Packaging, such as Faes.
As 4PPs, we become over-all process responsible for packaging in the supply chain, making such packaging problems a thing of the past. Of course, this is a far-reaching form of cooperation, based entirely on partnership and trust. As your packaging partner, we do everything in our power to optimize your packaging process, but to do this we obviously need insight into this process.
This was just one example of what can go wrong in packaging. In the white paper you can download below, we list 4 more examples of packaging problems for you.
Johan Faes
CEO
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.
