Sunday 25th Sep 2016 - Logistics Manager

Think outside the box

Massive e-commerce is driving rapid growth in the number of packages being delivered each year, so companies are going to have to think hard about their packaging systems and materials, says Johanna Parsons.

Almost 2.2 billion parcels and packages will be created by e-retail operations each year by 2017, according to a report by IMRG and Manhattan Associates, and even excluding two-man and grocery deliveries, this figure is forecast to  almost double in the next five years.

 The growing e-commerce market means more and more small orders have to be packaged separately, and in such a way as to survive delivery intact, reflect well on the retail brand, and increasingly mitigate their environmental impact.

This is good news for packaging suppliers, and those who deal with packaging waste. For example the packaging and distribution business of Macfarlane Group recently announced growth of seven per cent to £4.9 billion in 2012, which it attributes squarely to its focus on the supply of protective packaging to internet retailers.

The increasing requirements of packaging, and increasing volumes, are forcing retailers to transform their distribution facilities.

The recent opening of Marks & Spencer’s massive e-commerce hub in Castle Donington is testament to the growth of online shopping, and the scale of its packing operations demonstrate how seriously the big retailers are taking packaging and its potential for competitive advantage.

One third of the mega DC is dedicated to pick and pack operations. The facility will process a million items per day including store deliveries and some 300,000 dot-com orders going straight to customers’ homes from the site.

This shift in sending goods direct to the consumer is putting pressure on packaging operations. Instead of preparing a truck load of items on a few pallets, pick and pack now has to make sure each order, often of individual items can survive anything that the delivery process throws at it.

And rather than just being an ancilliary step in the journey to stores, warehouse packing operations are now a high stakes customer facing operation.

“How a parcel is received by a customer can either enhance or harm a company’s reputation,” says Jason Inwood, managing director of packaging supplier Woodway.

As the first point of contact between online retailers and their customers there is also a burden to represent brand values. Getting the right type and style of packaging is an important strategic decision.

Inwood says that there are four key considerations when deciding what packaging should be used. “These are protection, environment, efficiencies and brand…

“By evaluating and addressing these elements together, not in isolation, a company can improve the chances of their delivery being well received and ensure their brand is positively reinforced to their customers.”

Often these factors are interdependent. While stock integrity is of primary importance, over zealous wrapping which is hard to open, wasteful volumes of void fill, or materials that are hard to recycle can annoy consumers and reflect badly on the brand. And this rationale is not limited to B2C. Being environmentally friendly is being taken seriously behind the scenes.

Eco focus

“Over the last few years packaging in the traditional B2B retail environment has gone through a massive change programme due to tighter environmental controls and the efficiency drive of cases per pallet,” says Scott McGinley, e-commerce director of Dalepak.

“In recent years there has been a noticeable rise in companies actively trying to reduce their carbon footprint. This coupled with the ever growing pressures of budget constraints, has led to businesses implementing recycling services within their supply chain that almost ‘kill two birds with one stone’” says Anand Assi, project director at Pall-Ex.

And Pall-Ex’s own recycling process Eco-Drive is a good example. It allows retailers to have their packaging waste taken away and recycled as part of the delivery process. This eliminates the need for storage space for such waste, and the work and costs of processing it.

Assi says “Going forwards there is definitely scope for the introduction of more integrated services like Eco-Drive. We will see more retailers look at their supply chains for new ways to save money and be environmentally friendly at the same time.”

An obvious first step in reducing any operation’s carbon footprint is switching to recycled and recyclable materials, and can often result in more direct savings.

McGinley gives the example that Dalepak has switched to using pallets which are made from 100 per cent recycled paper.

The Paper Pallet Company’s offerings are also reckoned to be 20 per cent lighter than wooden pallets, have no nails or splinters, and are exempt from International Standards For Phytosanitary Measures No 15.

“Recycling has become part of the normal day to day operations in the last five years…” says McGinley.

“Companies need to engage with their packaging suppliers and ensure that regular reviews of product type and packaging are engaged.”

The European Federation of Corrugated Board Manufacturers’ European Database for Corrugated Board Life Cycle Studies found that the corrugated sector had reduced its carbon footprint by a further 4.8 per cent over the three years from 2009 to 2011 on top of a cut of almost 12 per cent in the previous three-year cycle.

The Confederation of Paper Industries reckons that corrugated packaging protects around 75 per cent of goods in transit, that the majority of corrugated packaging is manufactured from recycled material, and where virgin fibre is used, it typically comes from sustainably managed forests, using fast-growing softwoods such as pine and spruce.

But recycling itself is not without its drawbacks in the drive to make operations more carbon efficient. Sometimes shrinking carbon footprints is an exercise in moving the problem, effectively brushing it under the carpet. Reported landfill waste is sometimes reduced by simply exporting it, and offsetting mechanisms are by no means perfect.

And recycled materials will never match those produced from virgin materials 100 per cent, especially for papers and boards.

“This is a thorny issue” says Kevin Vyse, managing director of the institute of Packaging Professionals, and he has seen many firms report reduced emissions after simply moving production abroad.

“We have to be sensible and realise that entropy exists and we will always need carbon in the process. Reducing carbon footprints can only go so far before we sacrifice product integrity.
“Maybe the issue is more to do with consumer consumption and reducing their waste.”

But of course reducing waste for the consumer means reducing packaging, and the danger of risking stock integrity. Obviously items damaged in transit defeat the whole object of delivering goods at all. Any potential savings from minimising packaging will be meaningless if goods are unfit for purpose, effectively making the entire operation a waste.

Goods damaged or broken in transit are costly for the liable party and inconvenient for everybody. The consumer’s inconvenience is of particular significance, as it is not just one individual’s potential future custom that’s at stake. Disgruntled shoppers now have more means than ever via social media to share their feelings on the matter, and shame the businesses in question, doing real damage to brands.

And the environmental impact is not limited to the duplicated delivery costs as items often have to be retrieved, and replacements also represent extra costs for all other processes from storage, pick and pack right back to manufacturing.

As margins tighten, ascertaining the right balance of economy and efficiency for transit packaging is an increasingly valuable equation.

“This can often be achieved by understanding the end-to-end process of the logistics supply chain and evaluating all the touch points a package goes through before reaching the customer,” says Jason Inwood, managing director of Woodway.

“It is then possible to work out where the weak points of a product are and ensure they have the appropriate protection.”

Dr. Liz Wilks, European stakeholder manager for Asia Pulp & Paper agrees that a more holistic approach is essential. “What I expect to see is an increased focus across the supply chain on what PwC refer to as ‘efficient packaging’.

“This approach requires producing effective packaging solutions which need a minimum of raw materials to create, maximise product protection, minimise product wastage, promote transport and display efficiency, and finally are constructed from materials that facilitate effective after use disposal and recycling.”

Product design is an important factor for efficient, and less wasteful packaging. Sainsbury’s recently developed a slim line toilet roll which Wilks gives as an example. By shrinking the inner tube, the diameter of the product was reduced from 123mm to 112mm while keeping the same number of sheets. This new design uses less outer packaging and allows the retailer to place more products on the shelf and on the lorry – saving 500 lorry loads every year.

Stephen Dawson, chief executive of Bapco Closures, is another exponent of a more considered approach to design for items such as containers that create “win-wins” – where a design not only offers environmental benefits, but also improved consumer convenience and product protection.”

Innovative designs that factor in distribution, and recyclability can unleash huge savings. He cites an innovative closure solution using a foil seal inside a cap to provide tamper evidence which eliminates the need for tamper bands and knurling.

“This means a lighter cap and lower neck profile, which enables blown containers to be reconstructed, offering weight savings of between 25 and 40 per cent on a standard closure application, cutting costs and reducing carbon emissions throughout the production chain,” says Dawson.

Smart design is an invaluable route to efficient,  packaging. But it is just one component in the equation. Every retailer will have different priorities, but the aim will always be to get the right balance of quality and cost without forgetting recyclability.

With the diversity of sectors turning to the online sales channel, the challenge of optimum packaging is growing. But this also means a new world of opportunities for packaging solutions.

Case study- Baling machines convert recycling costs to profits

Shropshire based Nexus Industries was spending nearly £30,000 per year on waste disposal, with 80 per cent of its packaging materials arriving at the factory being collected every working day, before investing in two waste material baling machines.

The firm manufactures and distributes electrical accessories and equipment to trade and retail customers throughout the UK, Europe and the Middle East.

Nexus purchased a V400 baling machine from Agritel for £8,000, which was forecast to provide a return on investment within two and a half years. When this was achieved within 18 months combined with total waste management cost savings of £18,000 over the same period, Nexus decided to purchase a second V400.

Glenn Rickwood, distribution manager at Nexus Industries explains: “Not only did we resolve our waste disposal issue but with bales fetching up to £100 per ton for cardboard and £250 per ton for shrink wrap, we started to generate a profit sooner than expected.

“With the mill-sized bales easier to collect and process, the two machines have provided an excellent return on investment, improved housekeeping and health and safety on the factory floor.”

Rickwood says that the workforce and management alike are buying into the idea of reducing the firm’s environmental impact to such a point that they are now evaluating further recycling initiatives, with an eye on possible “green” accreditation in the future.

Case study- Electrostatic dissipating film reduces charge – and costs

Arrow Electronics, an American supplier of products and services for global industrial and commercial users of electronic components and enterprise computing took on Storopack in its European Distribution Centre in the Netherlands to develop a better system for protective packaging.

Some 5,000 shipments leave the DC every day, serving 20 countries.

Arrow Electronics and Storopack worked with common goals, and feedback to embed product quality as well as environmental protection as symbiotic processes, which was regularly reviewed by Lean Management.

Arrow had found that it required air cushions rather than loose-fill, but no air cushions were available on the market with electrostatic discharge protection.

Storopack now provides cushions with a surface resistance between 100 kilo-ohms and 100 giga-ohms to allow static dissipation, made at its film production site in Wildau, Germany.

The AIRplus Void Fill cushions are dyed pink to show their ESD protective function. It is a clean, practical way of working without the danger of creating dust.

There is now a fully designed and enclosed hall which is used as an ESD protection zone where the cushions are deployed, and personnel, facilities and the packaging are routinely surveyed for building charge.

There is an automatic feed providing the air cushions to 39 packing stations. AIRplus bag separators manufacture the cushions to the required size.

Arrow makes cost savings as the cushions use less material than loose-fill, and through higher productivity and reduced warehousing space.

As the film is entirely recyclable, and the cushions can be punctured to fold down flat, recipients also benefit from simple disposal.

Maurijn Hellenthal, logistics engineer at the Arrow DC, says: “We have faster turnaround times, improved ergonomics and the integration into our existing warehouse layout has worked.”

Case study- Packaging helps skincare firm bag retail deal

A Northumberland specialist skin care company, Skin Salveation, has taken on Assembly and Packaging Services to help secure an exclusive retail deal for its range of eczema products.

The story of the products began when two County Durham miners discovered that mixing certain ingredients to make soap reduced the harsh effects of their skin-hostile workplace.

John Davidson, managing director of Skin Salveation required APS to produce samples and costings for a retail-ready pack and point of sale material in less than three weeks.

He said: “This development has elevated the Skin Salveation brand to a whole new level, demonstrating the integrity and quality of the products in what is a highly aggressive and competitive market.

“Given the potential size of this opportunity, I needed to choose a fulfilment company that could not only deliver on the initial project, but one that can go on to deliver at the highest level in potentially high volumes.”

APS is providing PET cartons and tubs, palletising and automatically labelling orders with flow wrap and shrink-wrap.

The firm reckons the quality of its packaging and display material supported the quality of its products to win the deal with John Bell & Croyden – one of London’s oldest and largest pharmacies and part of the Lloyds Pharmacy group.

Chris Turner, commercial manager at APS, said: “The majority of the work we do is with a ‘just in time’ delivery so challenging and deadline driven demands are part of everyday life.”
Davidson said: “The feedback from John Bell & Croyden was that the packaging looked outstanding.”

Innovations

DS Smith Packaging Launceston recently won several Worldstar Packaging Awards for its bespoke cardboard packaging designs, including a pack to hold live pea shoots, a presentation case for wine commissioned by Laithwaite’s Wine, a cylinder head storage pack and an engine shipper. The engine pack carries two car engines and improves the capacity of shipping containers by 22 per cent, saving approximately £350,000 every year. The wine pack cuts use of unsustainable materials such as wooden frame boxes.

Schoeller Allibert has taken technology developed by the aerospace and nuclear industries and applied it to its latest reusable trays and containers. Finite Element Analysis is a computing technique used to model the response of a design to stress factors, and is now used to calculate the strength and load bearing capabilities of individual RTP designs, and to confirm performance characteristics before any tooling investment.

Schoeller Allibert has also released its Minipac, a quarter-footprint reusable wheeled folding merchandising unit which enables retailers to offer more product choice in less space, right. Interfold, a new folding tray is specifically designed to inter-stack with the Maxinest range of nesting trays.

A new company Maxim Solutions aims to cash in on heavy duty corrugated packaging industry which it estimates to be worth some £4 billion annually in Europe and North America alone. The firm creates fasteners to replace staples and adhesives which prevent recycling of packaging. This means boxes can be knocked down, returned and re-used, reducing logistics costs and emissions.

Finnish firm Eltete supplies carton board pallets which it says are four times lighter than normal wooden pallets. The firm also supplies the machinery to produce the pallets.
“Our main focus is to supply our Paper Roll-to-Paper Pallet technology to local companies everywhere in the world,” says Marko Virtanen, sales director of technology at Eltete.

Savoye has launched a small format packing machine, the E-wrap, which creates secure packaging for pick and pack operations by wrapping items in card. Sensors measure the product, and define the dimensions of the packaging, by folding pre-cut L-shaped cardboard. A folding arm and propulsion system fold the pack to the height of the goods, and paste it shut. Savoye reckons this uses less card and that the wrapping protects goods better, with 90 per cent less damage than other styles. The machine also labels orders, and packages can be sent in normal postal services.

At the Packaging Innovations show at the Birmingham NEC earlier this year, EasyPack presented PackMate, a compact, online, paper cushioning system, and Ceisa Packaging showed of its Full’Wrap system. This is a special shrink film formulated for multi-pack applications and used exclusively with the KHS FullyEnclosed FilmPac. It is for large packs of cans or bottles, and eliminates the need for a corrugated tray to reinforce the packaging.

The Paper Pallet Company is a new business which manufactures a range of recyclable paper pallets made from 100 per cent recycled paper. The pallets are strong but lightweight at 4kg.

Ranpak’s new FlexPak converter has a lofted sheet which can be used for wrapping, box lining and separating. It can be used with a foot pedal, on a pre-set mode, or with automatic production of the next sheet after the first one is removed from the output chute. It uses bright white, or lower grade brown paper, which together with the cardboard box, can be easily disposed of or recycled.

Ready Pac has a new custom Peel and Reseal Clamshell Film for packed salads. It’s easy to open, tamper-evident, and keeps lettuce fresh while using about 1/3 less plastic, allowing for an extra layer on each pallet.

Goplasticpallets.com has launched a lightweight modular lightweight sleeve. It consists of a nestable pallet base with secure catches, a plastic sleeve and a lid. When flat packed, the container takes up minimal space and the lid fits perfectly over the pallet, protecting the sleeve from dirt and water and promoting long term reuse.

Manufacturing software firm Apriso has brought out a system called Packaging Solution for Global Manufacturers to help manage complex packaging operations and conversion processes. It provides real-time visibility to enable faster responses to change, and greater accuracy.