Modern’s annual Packaging Issue

The most overlooked opportunities for greater supply chain optimization are pallet and packaging design—something we set out to fix this month in our Annual Packaging Issue. Modern’s editorial team has “packaged” articles that run us through the findings of our 2015 Pallet User Survey; make the case for elevating the roles of pallet and packaging design to a central part of supply chain planning; and share how today’s packing stations are optimizing order fulfillment productivity.

Pack Expo taking place in Las Vegas (Sept. 28-30) this month was certainly an impetus for our timing; however, we see an ever-persistent disconnect among supply chain organizations when it comes to these critical links. In fact, the more the detachment widens, the more it’s going to cost your operation—and not just thousands, but millions depending on your transportation budget.

“As much as the industry talks about supply chain integration and the dismantling of silos, pallet and packaging design is a classic example of how these problems persist,” says senior editor Josh Bond, author of the Big Picture, “When is a pallet not a pallet?”

In his story, Bond shares a perfect example of the pitfalls of designing the supply chain one piece at a time—with each group focused on a specific objective—from Jack Ampuja, president of Supply Chain Optimizers.

“Jack describes a customer who went through a recent effort to cut packaging costs that saved them a nickel on each carton, but the move created another 25 cents per carton in freight costs,” says Bond. “The packaging engineer is happy with his effort, however the transportation manager’s budget just took a pounding.”

And as long as operations are structured in this manner, one group might not recognize that what’s good for one silo can be devastating to another and create significant costs that wipe out everyone’s good intentions.

“Jack believes that the most successful projects start with a dozen people in the room, anyone with an oar in the water,” says Bond. “And that’s a good start. But when it comes to the concept of working with a supply chain organization on packaging design, he often hears the senior vice president of operations say it’s not his problem—but he’s only seeing part of the world.”

But there’s a bigger elephant in the room regarding the persistent disconnect between packaging and freight costs. As your colleagues in transportation management are well aware, 2015 is the year “dim weight’ pricing for small package and less-than-truckload shipments will be making a significant impact on unsuspecting budgets.

“The majority of small- to mid-sized retail shippers are about as ready to manage dim weight as I am to take a rocket to the moon,” says Ampuja. “I don’t believe they know what’s coming or have any idea of what to do other than wait and see what happens.” Early projections are that one third of all small package shipments will see cost increases, with overall shipping cost increases jumping up anywhere between $500 million to $1 billion.

“Supply chain operations can either sit back, stay disconnected, ship inefficient boxes and pay more, or take action with their packaging engineers and carriers now,” adds Ampuja. “It’s up to them. However, by the end of this year and into 2016, we’re going to see a lot of reactive scrambling to start building those connections.”

Reader Survey: Pallets as a reflection of your business
Modern’s annual reader survey shows how trends in pallet use point to priorities around cost control, customer compliance and operational efficiencies. More customers are asking for pallet type changes and having minor availability issues with used wood pallets, while pallet cost and durability continue to be dominant decision factors.

Big Picture: When is a pallet not a pallet?
Experts make the case for elevating the humble roles of pallet and packaging design from a fragmented race for savings to a central part of an optimized supply chain.

4 ways packing stations have evolved
Moving from an afterthought to a key component of e-commerce and omni-channel facilities, today’s packing stations are unclogging bottlenecks and improving order fulfillment productivity.

Bins and shelving system saves valuable minutes
Hospital system reorganizes medical supply room to improve patient care through new supply chain practices.

Packaging Corner: Automated system replaces manual insertion, application of customized documents
For operations with multiple pack stations, automation can improve accuracy and productivity when handling pouches, envelopes and small parcels.

60 seconds with Charles “Chuck” D. Yuska, PMMI
Modern spends 60 seconds talking to the president and CEO of PMMI—The Association for Packaging and Processing Technologies about packaging and materials handling.

Coverage of Pack Expo 2015 Las Vegas

Complete Packaging coverage