Packaging and Waste in the Supply Chain

APICS Logistics

From 2018 APICS CLTD Learning System

In the 2018 APICS CLTD Learning System, Packaging is considered a core activity of Logistics. Packaging serves many purposes but can also turn into another important CLTD concept, Waste.

The APICS Dictionary, 15th edition, defines Packaging as:

‘Materials surrounding an item to protect it from damage during transport. The type of packaging influences the danger of such damage.’

and defines Waste as:

 ‘1) Any activity not adding value to the good or service in the eyes of the consumer. 2) A by product of a process or task with unique characteristics requiring special management control.’

While many companies and government initiatives are leading efforts to minimize packaging as waste through forms or biodegradable dunnage and reusable packaging, I can personally see the downside of packaging by counting the number of empty Amazon boxes in my basement.

The APICS Dictionary, 15th edition, defines Dunnage as:

‘The packing material used to protect a product from damage during transport.’

By putting on your lean thinking cap you may be able to reduce both packaging waste and other forms of non-value added waste in your supply chain.

Packaging 1As an example, I recently visited a warehouse who repackaged and distributed travel sized consumer packaged goods. Their value-add in the supply chain was converting bulk materials into small kits consumers would purchase at hotels or convenience stores. One of their products was a shaving kit where they would pair up a 10 ounce can of shaving cream with a disposable razor and a small packet of after shave.

The assembly process involved removing the component parts from their shipping cases, putting the components into separate piles, putting one of each component into a bag and sealing the bag.

Packaging 2As I observed the initial breakdown process it was easy to identify waste. Focusing on one component, the shaving cream was being shipped into the warehouse in cases with 24 each in pallet quantities. The operator would grab a case, move it to the table, open the case and remove all 24 cans from the case. Then stack the empty card board case on a recycle pile. A similar process was being done for all kit components.

Using one of my favorite concepts picked up from Stephen Covey’s ‘7 habits of highly effective people’ “begin with the end in mind’, we can start to identify ways to eliminate waste.

The kitting process needs components in individual counts. Could the company work with their suppliers to get the product shipped in large bulk containers? Doing this would potentially eliminate waste by:

  • The product would arrive in the state needed for kitting (individual counts) and allow operators to focus on the value added kitting process rather than the non-value added case breakdown step.
  • The excess case packaging would not need to be managed (stored, moved, recycled).
  • The overall product cost might go down with the elimination of case packaging.
  • The supplier may reduce costs in packaging labor and/or time.
  • If the new shipping containers were reusable we could potentially eliminate the cost of pallets (purchase and handling costs).

Sure it may not be as easy as I present, but it never hurts to ask. While some costs may go up, if you take a total cost perspective I expect this would result in a system wide net benefit.