Reusable packaging increases the sustainability of your supply chain, reduces waste and offers a multitude of benefits both operational and financial. Companies that underestimate the complexity of managing reusable packaging struggle to realize these benefits. That’s where the expertise of a third-party packaging management provider to address both inbound and outbound movements becomes invaluable. These service providers significantly cut the time and effort needed to track, retrieve, clean and inventory packaging assets in a wide variety of industries, including automotive, industrial, food, beverage and consumer goods.
When trying to maximize your operational efficiency, reducing costs through a third-party packaging management provider is likely not your first thought. But companies without a packaging management process in place are missing out on the added benefits of their investment in reusable packaging, in addition to valuable insights about their operation and contributions to their organization’s overall sustainability goals. These benefits and savings all start with increased packaging availability.
Right packaging, right place, right time
In today’s complex supply chains, it’s critical that packaging is available when and where you need it.
Without packaging, companies cannot move their product, resulting in lost sales, spoiled product and unhappy customers. Reusable packaging management solutions help ensure a consistent process to route packaging to the proper locations, reducing loss and production interruptions.
Increasing packaging availability not only helps the supply chain run more smoothly, but it also reduces packaging costs. Third parties can effectively coordinate, collect packaging at strategic locations, and advise on return routes to reduce mileage and ensure proper return. These services also save labor time, allowing your team to focus on other important aspects of your operation. In one case study with a food ingredient supplier, changing to a third-party management service from a self-managed process reduced loss by over 8% in less than 18 months.
What’s more, these services help make supply chains more sustainable. Reusable packaging management models are circular, recovering packaging at the end of its useful life. A management process will collect damaged or obsolete packaging and recycle it to produce new packaging. An added bonus? Reusable packaging is great for the environment. With your assets being returned for reuse, the use of expendable packaging is also diminished, leading to less packaging waste overall.
With increased visibility to the entire fleet, you won’t over purchase packaging or underutilize assets, further reducing your costs and environmental waste.
Increased visibility drives improvements
A dedicated management process will increase visibility and help pinpoint areas along the supply chain where packaging is not being handled properly, or is damaged or lost. By tracking your packaging, you may uncover noncompliance to guidelines, allowing the opportunity to address misuse and assign responsibility throughout the entire supply chain. Reducing misuse will extend the usable life of your packaging, protecting your investment and eliminating unnecessary replacement costs. Third-party providers recommend tracking and auditing services that ensure companies get the most out of their initial packaging investment.
When considering options to manage reusable packaging, many companies automatically assume that GPS or RFID tracking technology is the best solution. While these technologies are popular options in certain industries, especially expensive goods, they aren’t always the best fit for every operation and business goal. When considering advanced sensor technology, avoid a DIY disaster and look to the experts for guidance. Third-party management companies work with systems integrators and technology service providers to ensure a successful project. If sensor technology is desired, consider where and how the data will be captured to make the best decision for your operation.
Finding the Right Third-party Management Provider
Reliability and a proven track record are important when choosing a partner. Before bringing in a third-party, companies can start by looking at their supply chain. When evaluating whether a third-party management solution fits into your supply chain, do a self-assessment of your reusable packaging management program:
- What are my goals for tracking reusable packaging? Is it strictly loss prevention? Or do I want a complete network tracking process for scrap, damage, repair and maintenance?
- Do I have enough resources and processes dedicated to tracking and managing returns of reusable packaging?
- Will third-party services be integrated into existing ERP software, or will a separate tracking software solution be required?
- What advanced metrics are desired to measure success? For example - dwell time reduction, misrouted packaging, loss identification, inventory accuracy, operational efficiency, etc.
All types of reusable packaging such as pallets, totes and bulk containers and metal solutions can benefit from proper management and tracking services. The Covid-19 pandemic has illustrated the importance of a connected and efficient supply chain. Part of achieving connectedness across the supply chain is the packaging used to transport product. Utilizing third-party packaging management services can help your company find its missing link and streamline its operations.