Despite the global pandemic, Kane Logistics’ operations team has been in major start-up mode for the last year, with several new logistic operations coming on board. All facilities have started successfully and on schedule. But that success is due to more than just having a good project plan. If managing the start-up of a logistics operation is in your future – particularly during the pandemic – here are some keys to success.
Specific consumer products all look pretty much the same as they roll off the manufacturing line.
But to satisfy the various ways retailers want to sell products and consumers want to receive them, these products are bundled, wrapped, sealed, tied and packed into dozens of different configurations for final sale.
This is called secondary packaging and it’s very expensive for manufacturers to constantly adapt their production lines to create this multitude of packaging configurations. So, they lean on outside resources to streamline packaging.
Much of the cost and complexity in CPG supply chains happen post manufacturing.
Think about it. You might have one product – a potato chip – that gets packaged in dozens of ways. Historically, this final packaging has been handled as a discrete supply chain function by contract packaging companies. But an increasing number of CPG companies are recognizing the huge cost advantages – as much as 30% of combined warehousing, packaging and freight costs – of performing secondary packaging in the distribution center.
Specific consumer products look exactly the same when they roll off the manufacturing line. To satisfy retailer requirements, however, these identical products are wrapped, sealed, tied and packed in dozens, even hundreds, of different ways for presentation on the retail shelf. Consumer packaged goods (CPG) companies often outsource custom product packaging to outside contract packagers, adding a costly and time-consuming step between manufacturing and the distribution center.
As retail customer demands for customized items grow, and as retailers expand the variety of packaging to fit trends, themes and holidays, the demand for contract packaging services has also grown.
Third party logistics providers have become more and more involved in the secondary packaging process. That's because packaging decisions have major cost implications for supply chain logistics.
Products go through many stages as they work their way through the supply chain -- from the inbound flow of raw materials to manufacturing to primary packaging to secondary packaging to the warehouse to final delivery.
Four important product packaging trends have prompted consumer goods manufacturers to rethink how they manage packaging -- and what partners are best suited to handle this important function. Logistics professionals who seek broader supply chain leadership roles must understand these trends and their implications.