Logistics

Paper Packaging Industry – Importance of Packaging in Logistics

The prevailing phase of economic activity has resulted in a sustained growth of the packaging industry in over a decade now. We have come to realise that packaging no longer refers to merely a box or a carton, but rather to a well-calibrated system of presenting, storing and supplying goods in a safe, cost-effective with efficient movement throughout the whole supply chain, that eventually leads to maximising consumer experience, resulting in improved sales and profits. Packaging plays an integral role in the whole supply chain management cycle. It not only protects products from damage but also allows for their efficient distribution, communicates to the consumers, and is one of the major product differentiators in a competitive consumer marketplace. In fact, packaging design has recently developed into a mature communication tool on its own and the consumer now realises that packaging is a critical and central element in the creation of an effective brand identity.

To achieve a successful supply chain management, packaging systems must relate to aspects of marketing, logistics, productions, and the environment.

There are various aspects of packaging that plays such a crucial role. Different demands of packaging are warranted in order to deliver the overall supply chain experience. For logistics, the demand is for packages that can be easily handled throughout all processes and for the consumers. Marketing, on the other hand, requires appealing packaging that can attract potential customers and consumers. When it comes to production, the usual demands is for a uni-dimensional packaging for all types of products to minimise time and labour costs. Good packaging can satisfy all these aspects while also fulfilling consumer and customer expectations to create the desire to try the product.

A packaging system should ideally fulfil three primary functions that interact with each other in supply chain management, they are market, flow and environment.

The market function is fundamental to the packaging system and considers things like layout, design, communication, and ergonomic aspects that add to the product and brand proposition. The whole purpose is to entice consumers and induce sales. In recent decades, the connection between marketing and packaging has been deeply analysed by several studies, most of them found packaging as an instrumental part of marketing campaigns that can influence aspects like consumer attention, product positioning, differentiator and categorisation, usage behaviour, brand communication, and induction to purchase. In other words, packaging plays the role of an interface between consumers and brand owners which can genuinely alter the impression of the product’s quality and brand equity.

The flow function considers all the packaging features that contribute to the easy handling in the distribution channel. This function includes internal material flows, packaging logistics, distributions, disposal, unpacking, and return handling.

In recent years, packaging logistics has become a new discipline that gained traction over the strategic role of logistics in boosting competitive advantage by industrial community, although every industry attributes different maturity degrees to the subject depending on the products, culture and geography of the markets.

The new concept of packaging logistics is now focusing on the symbiosis achieved by blending packaging and logistics systems with the efficiency and effectiveness of supply chain management through synchronising logistical and packaging activities. In other words, it is the relationship and interaction between packaging and logistical systems that create add-on values in the complete supply chain, from raw material production to the disposal of empty packages by recycling, landfill, or incineration.

In the prevailing operational environments, these innovations must also take into consideration not only the market and flow functions but also an equally important and increasingly emerging factor: the environmental function. It aims to lower the negative impact of the packaging system over the environment by focusing on issues like using fewer inputs while achieving the same outputs and stress on reuse of materials and facilitating packaging recycling in supply chain management.

With the advent of an increased focus on the environmental aspect of the supply chain and ever since it became clear that the packaging system has a substantial influence over the environmental aspect an increasing number of businesses are now choosing environmentally friendly approaches and techniques.

The primary goal of supply chain management has always been achieving customer satisfaction optimally; however, we must keep in mind multiple variables can obstruct this process. Packaging can affect a product’s dependability, quality, speed, costs, and flexibility, while also having an impact on its life cycle. For companies trying to optimise all the factors that play a prominent role in their supply chain, barcode label software might be the answer.

Enhancing product traceability is one of the critical improvements any company can make in their supply chain management process. Traceability integrates inventory, transportation, and timely delivery while affecting the overall cost. For a long-term customer satisfaction strategy focused on product packaging, companies need to enhance their traceability and deliver such improvements to customers through supply chain labelling and packaging.

As we tear down the layers between the creation of a product and its ultimate sale, the importance of traceability and labelling in the supply chain become clear. Increased costs of supply chain management will end up being paid by the consumer, while traceability and labelling improvements, on the other hand, might even enhance sales through packaging enhancement. All of these demonstrates value to customers.

Furthermore, packaging options are continually evolving, with new labelling and material options specifically developed to boost customer engagement and increase the overall packaging quality. These also have an impact on user experience and ultimately the sale of a product. To maintain business growth, companies ought to focus on aligning their supply chain management, labelling, and traceability.

Packaging today involves far more than boxes and bags, but even though there has been an incredible revolution in the industry, packaging optimization still needs to be at the fulcrum of all efforts leading to supply chain management efficiencies.

Countless marketing studies over the years have concluded that optimised packaging will deliver results in many aspects of the supply chain. It can increase product efficiency, smoothen the handling of materials at the production floor, ensure the efficient use of modern supply chain technology like stackers and pallets, creates better operational activities at both the plant and the warehouse, and makes for an easier damage control process, inventory management, cycle counts, and space usage.

Simply put, packaging optimization enhances the overall supply chain cost optimization and leads to a maximised return on investment.

Kailash Chandra Agarwal
Kailash Chandra Agarwal

Mr. Kailash Chandra Agarwal is a successful entrepreneur, with a penchant of building successful businesses. He has been instrumental in building the Kailash Group from scratch into a group with formidable scale and size. He got into the business in 1993 when it was a modest entity and established the Kailash Group into a diversified conglomerate.

Today the Kailash Group is a US$ 400 million diversified group with business interests in Paper, Power Equipment and Coal. The group’s Paper business is in the name of Genus Paper and Boards Ltd., while the Power Equipment business is through Genus Electrotech Ltd., Genus Innovation Ltd, and Genus Power Infrastructures Ltd. The Coal business is represented by two companies namely Kailash Coal & Coke Company and Virtuous Urja Ltd. With over 25 years of experience in building and managing businesses Mr. Kailash Agarwal today spearheads the Kailash Group as the Vice Chairman and serves in the boards of all the companies in the group. Mr. Agarwal holds a bachelor’s degree in science. When not managing the dynamics of business Mr. Agarwal takes keen interest in Spirituality.

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