Historically, product packaging has been done in the factory, but third-party logistics companies have begun offering packaging as a value-added service to help manufacturers handle demands from retailers for special packaging for product promotions. Manufacturers ship large quantities of those products to the 3PL, which wraps or inserts the items in special packaging for display at a retail outlet.
In the future, 3PLs may take on other duties besides packaging products for retail sale, said Todd Armstrong, director of distribution operations at Kimberly-Clark Corp., at the Council of Supply Chain Management Professionals (CSCMP) 2010 Annual Global Conference in San Diego. Armstrong said that 3PLs could also get involved in the design, testing, and specification of packaging materials.
Integrating packaging operations into a distribution center operation typically produces savings in the range of 30 percent, according to Michael Marlowe, a vice president at the third-party logistics (3PL) company Kane Is Able Inc. The majority of those savings comes from a reduction in freight charges.