A perspective on the evolution of the packaging supply chain

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How consumer expectations and digital technology are disrupting and transforming the packaging supply chain.

At a recent client visit, the packaging our working lunch was delivered in triggered a conversation about the how much everyone hates packaging. Actually, as we all agreed, it’s not so much that people hate packaging – they just hate throwing it away.

As a supply chain professional, however, I’d like to defend packaging and talk a little more about its place in global supply chains. The role of packaging is more than just the protection and wrapping of goods. Not only is it a key contributor to the effective handling and safety of a product across the supply chain through consolidation, transportation, labeling, and tracing, packaging also carries important information and enables products to be offered in different formats dictated by the consumer’s needs.

Packaging has its own unique supply chain. All packaging materials need to be sourced, procured, produced or recycled, and then shipped – so that they can be utilized within other supply chains. The decisions made as part of this process have a huge impact on logistics within other industries.

The size and weight of packaging dictates transportation and warehouse costs within a particular supply chain. Packaging also plays a crucial role in e-commerce, where the shipment of goods is reliant on packaging, and packaging itself become part of the consumer experience.

The sustainability of packaging

However, it’s no secret that packaging is becoming an increasingly controversial topic. As consumers become more aware of their personal use of plastic and the biodegradability of materials, it places pressure on organizations to prioritize sustainability. And to be clear, this is a good thing – for me, you, and the entire planet.

Within grocery supply chains, the primary role of packaging is to protect highly perishable items to ensure the secure and cost-effective delivery of these goods throughout the entire supply chain. Consumer pressure to use less plastic in the supply chain means that organizations need to carefully balance ensuring the safe delivery of products with packaging that is aligned with consumer expectations.

Reusable packaging – which is becoming increasingly common due to the increased awareness around sustainability – can also play a key role in reverse logistics, whereby packaging is recovered and redistributed after being used by the end-consumer, and absorbed into the supply chain for reuse.

Digital technology and the packaging supply chain

The advent of digital technologies is also transforming the packaging supply chain. Some examples include:

  • 3D printing – the process of creating physical objects from a digital model is enabling packaging organizations to manufacture packaging much more quickly, resulting in increased supply chain efficiency and reduced excess.
  • Augmented reality – real-world and virtual information can help workers locate items more quickly and increase productivity, resulting in disruption to pick and packing processes.
  • Robotics – there is scope for greater integration of robots across the supply chain to manage repetitive processes, such as assembling, handling products, and palletizing.

New, digital technologies are helping organizations postpone packaging decisions to later in the supply chain, which is bringing more flexibility and agility into the supply chain.

To summarize, customer demand for more environmentally-friendly and sustainable packaging, and the integration and combination of new technologies, are disrupting and transforming the traditional packaging supply chain.

Learn more about how Capgemini’s Digital Supply Chain Practice can increase your competitive advantage by strengthening your business drivers and focusing on your end customers, contact: joerg.junghanns@capgemini.com

Read Capgemini Research Institute’s “The Digital Supply Chain’s Missing Link: Focus  report to learn more about how organizations across consumer products, manufacturing, and retail understand the digital initiatives they are adopting, the benefits they are deriving, and the way they are transforming their supply chain.

Jörg Junghanns leverages innovation and a strategic and service mindset to help clients transform their supply chain operations into a growth enabler.

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