Packaging Optimization in the Supply Chain: Packaging Functions, Types and Tips for Your Business

10.11.2021

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Package optimization creates a cascade of positive effects throughout your supply chain: using less packaging material means less weight needing to be transported; less weight means fewer trucks and fewer trucks translates into less fuel. While this all means greater cost savings for you, taking this a step further, you would also be minimizing your carbon footprint. Besides just being better for the environment, reducing waste and choosing eco-friendly, biodegradable materials can also gain you loyalty amongst your more environmentally-conscious customers.

Functions and Types of Packaging

There are 5 core functions of the packaging within every supply chain:

  1. Protection: Packaging should protect the product from a wide range of environmental conditions while using up the least amount of material. If an item is under-packaged you’ll end up with damaged packages and products; if it is over-packaged, the packaging becomes wasteful and inefficient.
  2. Transportation: Packaging should support every mode of transportation and handling method used at every stage of the supply chain. For instance, does the packaging have load-bearing lifting points for ease of movement via forklifts and other machinery? Does it meet OSHA requirements for worker safety?
  3. Sales and Marketing: The packaging should serve to enhance the marketability of the products by being aesthetically pleasing. This function could also include the environmental impact of the packaging, such as sustainability practices used in material acquisition or production of the materials. 
  4. Storage: Storage and warehousing availability will impact the physical parameters of the packaging, but the package design should also support the storage of the products within warehouses. This includes considering shelving, pallet dimensions and freight costs to avoid wasted space.
  5. Services: The packaging should include instructions, warnings, usage recommendations, product guarantees and/or any other relevant information for the consumer about how the product was produced or should be used.

While the functions of the packaging itself don’t vary, the types of packaging do vary. There are 3 main types: primary, secondary and tertiary. Primary packaging focuses on basic product protection, in-store display and storage, and the customer experience (the package is easy for the customer to open). Secondary and tertiary packaging, meanwhile, ensure the product can withstand all manner of environmental conditions during handling and transportation, including extreme temperatures and humidity, handling by specialized equipment, and impacts inside of delivery trucks.

7 Packaging Optimization Tips

From product design considerations to packaging materials used, there are a number of ways to optimize your product packaging in your supply chain.

  1. Your current packaging process, equipment and actual package itself should all complement each other. Ensure you and/or your vendors have the necessary equipment and materials to make the specific type of packaging for your products. Optimizing your product design to need less packaging in the first place is a good place to start.
  2. The package should be optimized for all points in your supply chain. From storage warehouses and distribution centers, to the individual trucks being used for transportation. Are there places where you can be more efficient, or are there places where unnecessary waste is generated (i.e. fitting more product in storage, on pallets or into the trucks)?
  3. The protection required will differ based on the products being transported. For example, food, pharmaceuticals and other perishable items require barrier protection in order to maintain shelf life, while fragile items will require more shock protection to protect against impacts and falls.
  4. Look at materials used and properties of protective packaging to see if they can be swapped with more cost-effective alternatives. This could mean opting for thinner foam or plastic, choosing recycled cardboard, or trading out tape for glue.
  5. Use smart packaging technologies like RFID tags, smart labels and the Internet of Things (IoT) to protect products, improve shipping visibility, and make packaging more economical as they move from a warehouse or distribution center to their final destination.
  6. Test the products before packaging to first establish their fragility and help determine what type of material to use and how much to use.
  7. Try to use the same sized boxes for all of your products (or at least minimize the number of differently sized boxes used).

Care taken in choosing the right size, material and amount of packaging can make a big difference in both supply chain efficiency and brand image. DATASCOPE WMS contains a handful of scanner-based checkout solutions to simplify the packaging process, or eliminate packaging altogether. To find out more about packaging optimization -- or supply chain optimization in general --, get in touch with our team by scheduling your free software demo today!


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