60 Seconds with… Kyle Ous, Chainalytics

Title: Senior manager, packaging optimization

Location: Minneapolis, Minn.

Experience: Ous has been in consulting for 10 years and is a Certified Packaging Professional (CPP) from the Institute of Packaging Professionals.

Modern: We met at a conference a few years ago where you presented about how e-commerce is changing the role of packaging in the supply chain. How it evolved since then?

Ous: The way packaging is designed has changed significantly in the last two years. A big piece of that is Amazon’s SIOC mandate that requires product to be shipped in its own container. Instead of Amazon repackaging items in kraft boxes, it wants manufacturers to design and certify the packaging systems so product can flow through Amazon’s fulfillment centers and ship to a customer in the package in which it was received.

This change helps to coordinate the supply chain and minimize wasted movements and cost such as labor associated with packaging and the actual cost of the box. The date for compliance was Aug. 1, 2019. Several thousand manufacturers are creating new packaging systems for their product to comply with the mandate and grow their businesses across e-commerce platforms.

Modern: Has it impacted shippers in other ways?

Ous: Yes. Some manufacturers are looking at this as an opportunity to sell more product directly to the consumer from their own sites. In doing so, they can get closer to the customer and gain more information. The manufacturers taking that approach tend to be more mature in their sales and operations planning processes and are investing in packaging engineering resources to fast track the design.

Modern: Since end users come to you with their packaging issues, what are the pain points or the problems shippers are trying to solve today?

Ous: A lot of our clients are being pressured to improve star ratings online. One of the key focus areas revolves around the “out of box experience” (OOBE). We think of that as how the product comes out of the packaging, at the point when the consumer receives their purchase at the doorstep. Improving the OOBE can be difficult if there’s protective packaging in something you need to assemble.

Modern: Are there other catalysts driving changes in the way companies are packaging?

Ous: Absolutely. Retailers, who are the customer before the consumer, are exerting pressure on their suppliers to eliminate expanded polystyrene because it’s not recyclable. One of the attractions to EPS, however, is that it’s low cost with relatively good performance. So, leaders are looking to upgrade their packaging systems, but they still need to hit a cost window and a performance rating from a packaging standpoint.

One way is to design a shipping box that doesn’t require movement of any sort inside the container. A second issue is returns. Much of the test sequences for parcel shipments simulate the touchpoints observed on the forward flow of a package to the consumer but not the return.

Having the ability to repackage a product and ship it back into the supply chain is becoming more important with the increase in e-commerce sales and returns. Packaging designed for the return loop can make this difference between scrapping the returned item or placing the item back into inventory.

Modern: If I want to play in the e-commerce space, what steps should I take to make my packaging more efficient? Where do I start?

Ous: The best place to start is to capture the voice of your customer. We call it VOC in our packaging optimization consulting practice. If you’re a manufacturer, the big box retailer you ship to might be your best resource. Understand their requirements, and then work on the packaging solution that will address them. And, you may want to get out in front of your competition.

As a trail blazer in a category, you may have more opportunity to call the shots. If you’re late to the party, you may be constrained and have to follow what the leader in the category is already doing to effectively compete and still make a profit.