Wednesday 22nd Nov 2017 - Logistics Manager

Pushed to the limit

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The ever-changing retail market is pushing packaging to its limits. Alexandra Leonards explores the peaks and troughs of package design for omni-channel.

This article first appeared in Logistics Manager, August 2017.

Drastic changes are happening in the supply chain, and retail is responsible for a significant measure of that change. It’s hard to keep up with all the new channels and strategies from within the market, but it’s just as tricky for an external part of the process to adapt to omni-channel logistics.

The omni-channel approach is the way forward. That’s what Rob Carle, who works on the e-commerce team at DS Smith, thinks. In the packaging world, this means designing perfect sized boxes and packages that work for every channel and delivery method.

“It [omni-channel] also means shoppers will have an integrated, seamless brand experience no matter how they order or where they order from,” says Carle. But before the packaging can be developed, the industry needs to understand the challenges associated with the disparate methods of the omni-channel process.

Of course, on top of this, omni-channel links traditional shopping experiences with online channels, which results in even more packaging running through the logistics chains. Creating fit for purpose packaging on a larger scale is a real challenge for the industry.

“A package delivered by drone will need to withstand significant impact whereas a package left on a doorstep on a wet day will need to resist water damage,” says DS Smith’s Carle. “It is really challenging to develop packaging which suits every channel and delivery method so that’s why we have pioneered DISCS, new technology which scientifically tests whether packages can survive the pressure of the average e-commerce supply chain.”

The technology, ‘Drop Impact Shock Crush Shake (DISCS)’, involves five pieces of equipment, each of which replicates a part of the product journey to make sure the packaging can withstand different challenges.

“The biggest challenge for the packaging industry is adapting to the complexities of the modern omni-channel marketplace and designing e-commerce packaging which is fit for purpose,” says Carle. “E-commerce packaging is critical to a consumer’s perception of a brand – if a product arrives damaged because the packaging is not up to the job or if there is excess packaging inside, it creates a negative experience for the consumer.”

Packaging needs to incorporate a range of important factors. It needs to be durable, easy to open, easy to return, recyclable, and the right size.
“This last criteria is particularly tricky as consumers may order all number of products in different sizes, shapes and combinations,” adds Carle. “On average at the moment, 55 per cent of each box is empty.

“This is inefficient and means businesses are paying to ship air.”

Rachel Fellows, national accounts 3PL director of Macfarlane Packaging, says that different kinds of packaging are needed depending on the level of protection required during the different stages of delivery, and what the journey actually entails.

“For example; packages that are being sent from retailers offering delivery within a short time frame are likely to be fulfilled from hub to store and then to consumer, where the order is handled manually outside of the normal courier hubs,” says Fellows. “Standard online delivery from a fulfilment warehouse to home would need to endure several legs of the courier network with the associated risk being exposed knocks and bumps along the way.”

But it’s also important to consider the implications of click and collect. “How easy is it for the consumer to carry the package away after collection? Would carry handles make the process easier?” says Fellows. “As well as the process of sending packs to a consumer, it is important to consider the journey they may face on the way back if they decide to return the item.

“Packaging should be easy to return and a simple way to achieve this would be to add an additional sealing strip to a bag or box.”
Mark Mardel from Storopack says that from their customers’ perspective, they have seen a big change from what is expected of their suppliers, who previously were product centric in their thinking.

“Now the move is towards packaging suppliers focused on total cost of operations, not products,” says Mardel. “This industry change has enabled distributors to be flexible in terms of consultative advice and introducing best practice.

“If we treat the warehouse as an independent ecosystem and introduce anthropomorphic and ergonomic analysis; it clearly shows how personnel interact within the warehouse operation.”

He says that this is particularly relevant for organisations that have grown organically, because when you take a step back and look closely, they often have a very inefficient process. “By focusing on these processes and stream lining functions within a role the cost saving can often be in excess of the packaging spend,” he adds. “Therefore by increasing efficiencies resulting in reduced costs, this could also mean reallocation or reduction of labour, or increased capacity for the same cost”.”

But, absolutely crucial to the process, is the customer. The customer is always right, so the packaging must be both convenient and attractive for them.
“Consumers expect a consistent experience and brand journey whether they buy online, in-store or through a click and collect service,” says Macfarlane Packaging’s Rachel Fellows. “So, in order to maintain a loyal customer base it’s important for every retailer to engage with its shoppers through all channels seamlessly and branded packaging can help to achieve this. “

Ákos Dömötör, CEO of Optoforce, thinks that, in an omni-channel process, you need to make sure that you provide a unified user experience, regardless of how you interact with the customer. “This means that your customers should be able to do window-shopping at your brick-and-mortar store and then order your goods online or the other way around – she can read about your offering in social media and then get what she expects at your physical store,” says Dömötör. “While you might want to use different outer cardboard packaging for delivery to the stores than delivery to home for the sake of economies of scale, it is important that the customer experience – and so the actual product packaging remains the same regardless of the delivery channel.”

Productivity

Productivity is also a key concern, because delivery windows are increasingly short, while customer demands heighten.
“It is important to consider if there is an alternative pack design that can be erected more quickly, and/or filled and sealed more efficiently to create more output and use less spare in the warehouse,” says Fellows. “Customer experience has to be front of mind for retailers as the brand message should be consistent throughout the entire journey from ordering an item to receiving it.”

This is a difficult aim, but it can be realised with packaging that reflects the value of the ordered products.
“As orders continue to increase, transport costs can become expensive and this is a real challenge for retailers,” adds Fellows. “By rethinking pack design, better protection can be achieved whilst actually reducing pack size to reduce courier costs.”

As well as customer satisfaction, the packaging market needs to take on board a whole range of considerations. “Security is a key concern, especially for retailers selling high value items,” says Fellows. “Consequently there is a greater need for tamper evident packaging solutions.

“Whilst customers still want to brand their packs, many are concerned with theft, which is why printing on the inside has become a popular alternative to deliver an enhanced brand experience without compromising on security.”

In the omni-channel process there are lots of routes a package may take. Packages that leave a fulfilment warehouse for delivery to store for customer collection should be well packed to avoid having to re-pack at the store.

Robotics & automation

“Automation is a key part of the packaging operation for many retailers and larger organisations,” says Rachel Fellows, Macfarlane Packaging. “Machinery such as auto-boxing, auto-bagging and sealing equipment helps to improve productivity creating cost savings for the company.”

She says that conveyor networks are able to speed up picking, packing and shipping products out of a warehouse, which enables retailers to offer greater delivery flexibility for the customer.

“As the number of delivery options continues to grow, automation and robotics will be important in ensuring that retailers can continue to fulfil customer demand in a timely manner,” she adds.

Optoforce’s Ákos Dömötör agrees that robotics has a key role to play in the packaging market.

“Actually, not just in omni-channel, but also in regular home deliveries as well from online retailers,” he says. “Both are facing the same challenge: how to pick very different items for individual deliveries effectively.”

Robots are tireless, he says. And to boot, they don’t confuse similar looking items with each other, and with recent developments, they just got more affordable.

“Handling different items proved to be a challenge for traditional industrial robots, but with the new force-control algorithms out on the market these robots now can handle objects with much more care than their predecessors could,” he says. “At OptoForce handling objects with care were among the first projects we worked at – our touch sensors were in fact developed in order that robots can safely pick up delicate objects as eggs and light bulbs without knowing their exact dimensions in advance.”

The never-ending want and need for more efficiency is driving a revolution within the packaging industry, says Storopack’s Mark Mardel.

“The desire to reduce cost and increased flexibility regularly leads to the use of automation or Robotics,” he says. “Providing companies with a competitive advantage, whilst contributing towards a reduction in labour costs, and not just increases in productivity.”

Storopack is seeing increasingly that e-commerce retailers are requesting for automation rather than just standard void fill integrations.

“The mundane repetitive functions within the packaging area can be replicated without the need for human interaction, with robotics often replacing simple pick and place operations,” he says. “In particular six axis robots can replicate arm and hand movements identically for greater accuracy optimising box sizes.”

Mardel says that robots work at high speed, are precise, flexible and consequently reduce labour and safety costs while increasing throughput. “Furthermore within e-commerce operations presentation is key,” says Mardel. “The exact movement of the robot can eliminate scratching or otherwise damaging the surface of the product.

“The adaptable nature of robotics contributes to their efficiency allowing greater flexibility to accommodate industry trends.
“Peak season demands for temporary labour can be negated as the robot doesn’t need to sleep, and is able to work 24 hours a day.”

Dömötör says that one of the biggest challenges in packaging for home delivery is that you often have to bundle different items together in a unique package – no two deliveries are the same. So in an omni-channel process, you now need to get a list of the bought items from an online system, as well as provide the ability for customers to be able to update their basket via other means, ie directly to the store.

“This means that using up-to-date digital data about what to pack just got even more important and robots can be an ideal tool when combined with an agile ERP and logistics system,” he says. “No wonder Amazon now has a robotics division. “The challenge here is how to pick up and hold parts in a safe manner and that is why we at OptoForce work on bringing the sense of touch to robots.

“With a multi-axial tactile sensor robots can not only make sure that they assert just the right amount of force on the packages, but they can also control the weight of the boxes.”

What’s next?
Packaging technologies and strategies are adapting as quickly as the retail market. “We have recently launched two new technical solutions for the e-commerce sector, which we believe will be the future of packaging – DISCS and Made2fit,” says DS Smith’s Rob Carle. “They address issues that have dogged the e-commerce industry – packaging which doesn’t survive the complexities of the modern supply chain and packaging which doesn’t fit the products – and provide innovative and welcome solutions.”

“The future is intelligent packaging which delights consumers. We hope that before long, all e-commerce packaging will be easy to source, assemble, ship, open and then either return items in or recycle at home.”

At the moment, retailers are exploring new and innovative packaging, designed to help them differentiate themselves from their competitors.

“ Augmented Reality is an exciting aspect developing in omni-channel,” says Rachel Fellows. “Augmented reality codes can bring the store experience to the online shopper’s home in a stimulating and creative way.

“It gives the opportunity for the retailer to cross sell their products and for the consumer to position these goods in their own home, it can also show the consumer how the product or appliance works with animated instructions.”

As well as this, retailers are looking to personalisation to make the customer feel special. “Key messages can be printed onto boxes such as ‘Thank you’ and ‘Open Me’,” adds Fellows. “They can also use printed boxes to create greater presence on social media by getting consumers to share images of their ‘unboxing experience’ with a hash tag that is printed on the inside of the box.”

Optoforce’s Ákos Dömötör says that logistic supply chains have been speeding up for a while now, but that this trend will continue even further.
“With advanced automation one-piece-flow based on actual customer orders now becomes a reality further up in the supply chain as well and so I expect to see more and more processes automated based on real-time data about market needs,” he says. “With this comes the need to build flexible production lines and so I expect to see more and more robots with advanced sensors and software instead of purpose built machines on packaging lines.”