What Role Does Packaging Play In Supply Chain Management?

If you are running or managing a business that sells goods, you will already know that the supply chain has never been more crucial to control than now.

In fact, one of the biggest drivers of economic instability and inflation in recent years has been the sudden boost in demand for goods. This has put immense pressure on businesses to level up how they manage their supply chain so that they can fulfill orders, keep customers satisfied, and not lose out to competitors.

So, where can packaging fit in this process to benefit businesses rather than hinder them?

In this article, find out what role packaging plays in supply chain management. Plus, discover how you can optimize your packaging process to make managing your supply chain more efficient and cost-effective.

What is Supply Chain Management?

Before we can jump into the role of packaging in supply change management, let’s quickly review what we mean by supply chain management.

Supply chain management (SCM) is the process of creating and optimizing a flow of goods or services from sellers to buyers. This can include anything from sourcing raw materials for production right through to selecting couriers to ship the product to the buyers’ warehouse, store, or mailbox.

And while much of the supply chain is focused on the manufacturing of a product and getting it to the customer, supply chain management also includes overseeing intermediary steps such as a product’s storage and, of course, its packaging.

The Supply Chain Management Process

Being familiar with the supply chain management process is essential for understanding where packaging fits in.

While supply chains vary significantly by industry, they generally follow this series of steps:

1. Strategy

The strategic phase of the supply chain management process outlines the entire supply chain and the opportunities to optimize it. Building out a supply chain involves making key decisions such as identifying which locations will be used to accommodate the product as it passes through each supply chain stage.

In larger companies, product designers and managers may also be involved to help decide how a product should be brought to the market.

2. Planning

The planning stage goes one step further than the strategic phase and precisely sets out how the supply chain will function and be managed. It may also make response plans for potential disruptors like resource shortages or higher-than-usual demand.

3. Logistics Management

This step identifies and decides on how materials, people, and machinery will interact with each other. Logistics management aims to ensure that resources can be easily gathered, processed, and stored without any disruption.

4. Procurement

Procurement refers to how the exact resources needed for the production of a good will be selected and acquired. This includes responsibilities like researching suppliers, establishing a steady supply of raw materials and even obtaining service-based resources like software and digital technology. Procurement in most cases involves working with an external party such as a reliable packaging supplier or courier.

5. Manufacturing

Once materials have been sourced, supply chain managers map out and oversee the process of manufacturing the goods. The manufacturing process should be monitored and optimized to reduce waste and to ensure it can respond swiftly to any disruptions.

6. Storage

In the vast majority cases, products are not immediately deployed upon being manufactured. Instead, they need to be moved and stored efficiently in warehouses or other storage spaces. Supply chain managers plan and monitor this step to make sure goods can pass smoothly into storage.

7. Distribution

This final step is distributing these goods to buyers. Supply chain analysts will want to monitor that products can reach their buyer on time without delay and will often evaluate decisions such as courier selection. Supply chain managers may also look into creating and overseeing distribution centers if they are selling wholesale or at a large scale.

Supply Chain Resilience

While each stage of the supply chain process has its own opportunities and challenges, you may already notice a characteristic that all of them must have to work successfully: resilience.

Supply chain resilience is the measure of how adaptable and able a supply chain is to withstand disruption. Resilient supply chains should be capable of handling high levels of interference, like material shortages, and quickly recover from it. Having a resilient supply chain can unlock plenty of benefits for both your business and your consumers.

Read on to learn more about how you can optimize your packaging to boost your supply chain resilience.

The Importance of Packaging in Supply Chain Management

Having looked at what makes a supply chain resilient, we can now explore what packaging contributes to the overall supply chain management process.

Packaging plays one of the most essential roles in supply chain management. Poor or inefficient packaging systems can quickly wreak havoc on a business’ supply chain management, creating issues such as shipping delays or last-minute spending to find a temporary packaging solution.

The quality of packaging also matters, particularly when it comes to compliance. For example, if you regularly ship your products internationally to markets such as the European Union, making sure your packaging complies with its regulations can prevent costly blockages or denials at customs.

Similarly, good packaging can help prevent delays and disappointed buyers by making sure your items are safely packed and transported without being damaged. While needing to replace the odd damaged or undelivered product may only have a negligible effect on the supply chain, a more consistent issue caused by a batch of faulty packaging can quickly snowball into a catastrophe for supply chain resilience. This also burdens other areas of a business, especially those that are customer-facing.

What Factors Contribute to Effective Supply Chain Management for Packaging?

It can be easy to underestimate the impact of packaging on the supply chain, particularly when you want to get a product to market quickly. However, there are certain packaging factors that need to be carefully evaluated before launching a new product.

These factors include:

• Low waste potential – Waste packaging not only carries extra cost for a business but it can also create inefficiencies. Keeping your packaging inventory supplied is a fine balance, especially if your product’s packaging needs can change at a moment’s notice.
• Packaging design – Adopting a unified packaging system that uses the same materials can vastly cut costs and make packaging procurement and assembly much more effective.
• Packaging weight – Once a package has been assembled, it will very likely need to be stored before being distributed. Packages that are too heavy or awkwardly-shaped are more likely to cause inefficiencies in how they are stored and transported.

How to Optimize Your Packaging to Increase Supply Chain Resilience

As you might imagine, having an efficient and resilient packaging process can keep a supply chain flowing at a healthy pace. It can also help when trying to make up for slowdowns earlier on in the supply chain and keep buyers satisfied.

To optimize your packaging process, consider the following options:

Build an Inventory of Packaging Materials

Whether you are operating a small, local business or a transnational enterprise, building an inventory for your packaging materials can really help keep the supply chain flowing when under stress.

This is notably important for businesses in sectors like retail or e-commerce, which may have a more unpredictable level of demand or seasonal booms. Having a dedicated space for your packaging can make sure you will not miss out on a sale simply because you ran out of packaging bags or boxes.

To get the most out of your packaging inventory, consider bulk-buying packaging. Not only can this cut down the time needed to order, receive, and store your packaging materials, but you might even pick up a discount too.

Get Your Packaging On-Demand

In some cases, you might not have the space to store bulk-bought packaging or you may regularly need to switch up your packaging needs. In these cases, there is still an opportunity to optimize your packaging supply chain management with on-demand packaging.

On-demand packaging is a revolutionary step in supply chain management that lets you get packaging whenever and wherever you need it.

Learn more about how on-demand packaging works here, or reach out to Crownhill Packaging to find out how it could benefit your business.

Choose a Reliable Packaging Supplier

Setting up a robust supply chain heavily depends on the decisions you make when procuring resources, and packaging is no exception to this.

When selecting a packaging company to supply your materials, try to dedicate some time into understanding their own supply process. While it may seem like a logical idea to opt for the cheapest supplier around, making sure your packaging supplier is able to fully meet your business needs is a must for maintaining that all-important supply chain resilience.

Transition to Sustainable Packaging

At first, adopting green packaging might seem like an expensive and long-winded road for your business to enter into. But the reality is that sustainable packaging is now becoming easier than ever before to access, and it may just be starting to overtake unsustainable packaging for good.

This is because environmentally-responsible packaging is now often more reliable than those from non-renewable sources. For example, renewable materials are more likely to be produced locally and do not rely on international market prices nor extreme long-distance shipping. Compare this to plastic-based packaging materials which rely on increasingly scarce and expensive raw materials that may need to be sourced from further afield, like crude oil.

Adopting green packaging also offers plenty of other perks for your business, including a better brand image and stronger customer loyalty.

Make Packaging Benefit Your Supply Chain Management with Crownhill Packaging

If you are looking to add a resilient packaging system to your supply chain, consider reaching out to Crownhill Packaging today. As an innovator in the packaging space across the US and Canada, we not only supply high-quality packaging products, but we also help our clients obtain packaging processes they can rely on.

To learn more about how we help make packaging a success for your business’ supply chain, contact us today!