management model for the design, development and … · saghir (2002) defines packaging as “a...

2nd World Conference on POM and 15th POM Conference Cancun, Mexico, April 30-May 3, 2004

MANAGEMENT MODEL FOR THE DESIGN, DEVELOPMENT AND

CONTROL OF PACKAGING IN THE SPANISH FOOD SUPPLY CHAIN

(002-0183)

Jesús García-Arca ([email protected])

José Carlos Prado-Prado ([email protected])

University of Vigo (Spain)

Departamento de Organización de Empresas y Marketing / ETSII de Vigo

Lagoas-Marcosende, nº. 9, 36200 Vigo (Spain)

Phone: + 34 986 81 22 20 / Fax: + 34 986 81 23 85

Abstract

Traditionally, packaging has been designed to protect products. However, consolidation of new

customer needs has favoured consideration of new requirements at the design and development

stage of packaging, namely, commercial and logistics requirements. Packaging should be seen as

a tool for communicating the product's differential advantages, for implementing cost reduction

policies, for tackling the problem of packaging waste (Directive 94/62) and for facilitating the

ECR implementation.


In this context, the objective of this paper is to establish a management model for the design,

development and control of packaging in the Spanish food supply chain which covers the diverse

commercial, environmental and logistics factors mentioned previously. This model has been built

up around a bibliographical revision of the topic, case studies and conclusions from research

carried out by the authors in 307 companies in the Spanish food sector (209 food packers, 30

distributors and 68 packaging manufacturers).

Introduction

The main function that companie s have granted to packaging has been traditionally related to the

mission of protecting, satisfactorily, the different products from the centres of production to the

final consumer. However, nowadays this basic mission must be enlarged. Along these lines,

Saghir (2002) defines packaging as “a coordinated system of preparing goods for safe, efficient

and effective handling, transport, distribution, storage, retailing, consumption and recovery, reuse

or disposal combined with maximizing consumer value, sales and hence profit”. This last

definition suggests the need to develop the new requirements in the designing and development

phase of packaging, this means, commercial and logistic requirements.

Along these lines, with the two basic strategies of Porter (1982) in mind, it is pointed out that

packaging can play an important role in the strategies of differentiation and leadership in costs.

Therefore, an adequate selection of the packaging implies benefits, both in the reduction of costs

and in the increase of sales.

From a business point of view or of differentiation, the packing and, especially, the container

have become a variable to take into account when dealing with the design of the product, as it is

an added seller of the product and a link between the consumer and the manufacturer and it is

considered the fifth "P" ("packaging") of marketing-mix. Simultaneously to the adoption of


differentiation strategies, the companies must establish policies of cost reduction to maintain or,

desirably, improve their position in the markets in which they operate. Among these costs is

found the logistical ones, whose reduction has become an unavoidable tool of competitiveness,

given it can suppose in products of large consumption on average over 10% of the sales figures.

Packaging has much to contribute in the reduction of these logistical costs, both in a direct way

(cost of buying, manipulation, storage and transportation of the packaging and the costs of

package and packing), and in an indirect way (cost of manipula tion, storage and transportation of

unit loads towards the final customer) (Johansson et al., 1997; Paine, 1991).

In order to illustrate this importance, it can be stated that if the costs associated with packaging

are considered, we find that these suppose 8% of the logistical costs, reaching 15-20 % in

international logistics (Lancioni and Chandran, 1990). In this line, Saghir (2002) explains that the

selling packaging at the retailer can represent 10-15% of the sales price of the product.

Having arrived at this point, it is necessary to state that this logistical view should be interpreted

from a point of view of supply chain management (or SCM). Christopher (1994) defines the

supply chain as "... a network of organizations that are interconnected, through upstream and

downstream links, in the different business processes and activities that produce value in the

shape of products and services to clients. This approach by Christopher, coincides with that

pointed out subsequently by Mentzer et al., (2001) and Stock and Lambert (2001).

In this context, there still exists little unanimity in the definition of the relation between SCM and

logistics (Cooper et al., 1997 and Larson and Halldorsson (2004). Thus, a quite extended view is

that the term logistics be substituted by the term SCM without implying any conceptual change.

This view is shared by the authors of this paper.


Nevertheless, the CLM (The Council of Logistics Management) defines logistics as “the part of

the supply chain which plans, implements and controls the effective, efficient forward and

reverse flow and storage of goods, services, and related information between the point of origin

and the point of consumption with the objective of adapting to the needs of the clients”. The

previous definition of logistics includes an express mention to reverse logistics the result of

increasing social sensitization toward the conservation of the environment, which has supposed

the development of new specific legislations in environmental matters.

In this context, the responsibility of the products that end their service life falls upon the

manufacturer or the producer, giving rise to the concept of Extended Responsibility of the

Producer (Lindhqvist, 2000). In like manner, enlarging this concept to the cons umer, to

suppliers, distributors and to any other participant of the supply chain, it would be possible to

achieve that all of the participants contribute to decreasing the impact of production and

consumption on the environment which could be named the Extended Responsibility of the supply

Chain (Bañegil et al., 2001). In relation to this last aspect, the European Union has developed the

Directive 94/62 that has been transposed, in Spain, in the Law 11/97 "Ley de envases y residuos

de envases”, which generates a new concept of the costs of packaging associated to the

management of its waste.

In like manner, in order to achieve a better functioning of the "supply chain", in line with the

continuous improvement approach or JIT approach, efforts have been initiated to improve the

collaboration among large distribution and the manufacturers within the initiative E.C.R.

(Efficient Consumer Response ), which can be defined as "a food and consumer products

industry strategy where distributors and suppliers work closely together to bring better value to

the consumer" (Kurt Salmon Institute, Inc., 1993). This initiative enlarges the area of action of


companies in the design of packaging, acting on aspects of "Efficient Product Introduction” and

"Efficient Replenishment".

On the other hand, enlarging the approach of collaboration "upstream" to the logistic flow

manufacturers of packaging could and should collaborate actively in the designing process of

them, given their capability to provide new alternatives regarding the materials of packaging and

equipment of packages and packing.

Given all of the problems commented on in the above paragraphs, it is possible to identify the

different functions that packaging must satisfy. Thus, Robertson (1990) indicates that the

packaging that must satisfy the packaging can be summed up in the packing in containing and

protecting the product, adapting the demand of the product to the consumer, grouping the product

in easy quantities to manipulate and transport it, give support to consumers' new socioeconomic

needs and be an element of communication of the attributes of the product. Other authors such as

Johansson et al., (1997) clarify these functions and speak of three basic functions of packaging

(the logistic function, the marketing function and the environmental function), this being the basis

of the model proposed in this paper.

Given the important relation between packaging and logistics, there has recently begun to

develop a new discipline known with the term "Packaging Logistics", which was defined by

Bjärnemo et al., (2000) as "... the interaction and relationship between the logistical system and

the packaging system that add value to the combined, overall, system-the enterprise". This

proposal presents the relationship and the existent hierarchy between the three large levels of

packaging (primary, secondary and tertiary) in the fulfilment of different assigned functions.

In order to satisfy the above-mentioned functions, the companies have multiple alternatives

(materials, formats, dimensions, ... ) to tackle the design of their packaging. The adoption of one


or the other alternative can mean important changes in the logistical costs mentioned above. In

accordance, for Johnsson (1998) these actions will be related to productive efficiency, the

manipulation of the product, the customer service and to the efficiency in distribution and in the

information. Obviously, the solutions adopted by companies do not usually present just one

action only, but rather, a combination of various actions.

In this area, in order to facilitate the implantation of packaging systems perfectly adapted to the

needs of the supply chain, initiatives exist that pursue standardizing the logistic processes through

the emission of recommendations that may be considered in the design of packaging. Along these

lines, it is important to point out the contributions of the "AECOC Recommendations for

Logistics” (AECOC, 1996) in Spain which indicates the restrictions that the distribution of

products in the marke t of large consumption must satisfy, especially, within the food sector.

These RAL's propose a series of “best practices”, relating to packaging, with the objective of

improving the efficiency of the supply chain.

Among these practices is found the palletization of the unit loads in pallet EUR 800 *1200 mm.

(according to standard UNE 49902 ), the dimensions of packaging multiples or submultiples of

the module 600 *400 mm. (according to standard ISO 3676), the definition of the height of unit

load (1.15 meters, 1.45 meters or 2 meters, including the pallet’s height ) and the maximum

weight of the unit load (1000 kilograms).

Description of the packaging management model

As it has been described up to now, the traditional point of view, does not express the packaging

multi- functional nature completely as it does not identify clearly its close relationship with the

product and with the greater part/majority of logistic activities. In this context, Porter (1984)


identified three generic competitive strategies: differentiation, leadership in costs and

concentration in a segment of the market. Thus, if the company chooses to improve its

competitive position with a differentiation strategy (more power in the marketing area) the

organization may accept a lesser logistic efficiency of the adopted solution that this supposes,

although, this measure should not mean that different alternatives are not approached for its'

analysis and study.

At the other end, if the company chooses a strategy based on leadership in costs, the selected

packaging will be closer to a standard format already existent and with a logistic efficiency made

suitable and tested (with lower costs) that can, however, oblige the sacrifice of some of the

possibilities of differentiation of the packaging . In any case, independently of the adopted

strategy, the levels of present-day competitiveness force companies to attempt to combine the

benefits of both strategies and, therefore, design and implement the ”perfect ” packaging

(differentiated and with low logistic costs ).

With this last approach, starting from its' strategies, the companies define its proceedings in

different fields, in particular, in the commercial field and in the logistic, being defined

respectively the chain of commercialization and the supply chain, the packaging design being a

common point in the achievement of its objectives. Nevertheless, the key factor to achieve

success in this process is to contemplate all of the requirements that the packaging must fulfil

together with the designing requirements of the product in such a way that the launching of a new

product is possible (or a modification of an existent one) on the market. In this context, the

position of the packaging strategy in relation to the company's other strategies will be directly

related to the importance that the packaging is given within the company.


On the other hand, granted that company environment changes (clients, technology, legislation,

competition, ... ), it is necessary to approach the designing of the packaging from a dynamic

perspective and not from a static one (parallel to the life cycle of the product), which forces the

establishment of a control mechanism that permits securing the availability of the best alternative

of packaging at each moment based on indicators, such as comparison with the competition's

packaging, costs or tendencies.

The result of all these considerations is proposed in the management model for the design,

development and control of the packaging as indicated in figure 1.

Figure 1. The management model for the design, development and control of packaging

TECHNOLOGY

LEGISLATION

ECONOMY

...

CLIENTS

COMPETITION

SUPPLIERS

BUSINESSSTRATEGY

LOGISTICSAREA

COMMERCIAL/MARKETING

AREA

... ...

PACKAGING DESIGN

LOGISTIC SYSTEM (Direct + Inverse)

SWOT ANALYSIS +

MARKETING-MIX

DEVELOPMENT PACKAGING

CONTROLPACKAGING

... ...

PRODUCTDESIGN


As a previous step to the packaging designing process analysis, it is necessary to remember two

aspects: on the one hand, the hierarchy structure of packaging, and on the other hand, the

functions or requirements that they must satisfy.

Thus, in the first place three different categories are established: the primary packaging (the

product's protector and, in many instances, it is in contact with it; also known as consumer

package), the secondary packaging (which has the function of containing and grouping several

primary packaging) and the tertiary packaging (consisting of several primary or secondary

packaging grouped in a pallet or unit load).

In this way, when contemplating packaging as a whole the natural interaction among different

levels would become manifest, depicting the important dependence among them. In fact, the

adaptation of a set level of packaging should not be contemplated if the adaptation of the set of

all the levels of grouped form is not also considered.

Secondly, it is necessary to contemplate the diversity and complexity of functions that a correct

packaging must satisfy. Along these lines, the model proposed by Johansson et al., (1997) will be

used, which establishes three basic functions: the logistic function (to facilitate the manipulation

of goods, the identification and the protection of the product), the commercial function

(knowledge of consumer demand, attractive design and communication), and the environmental

function (facilitate the re-utilization, the recycling and the reduction of the consumption of

packaging materials. All these functions act as requirements of design in packaging.

From this division, the authors have established within the logistic function three large sub-

functions (protection, production and flow). In turn the sub-function of flow has been split into

three new requirements (purchase and supply, efficient flow and information), as can be observed

in figure 2. This figure shows, in like manner, the importance of contemplating existent


technologies of packaging at each moment as a source of alternatives, which allows achievement

of a better adjustment to the previous requirements.

Figure 2. The requirements of design in packaging

The detailed analysis of the previous functions brings to light that the packaging system is

characterized for being subject to different design requirements from different areas within the

company and the different companies within the supply chain. In this way, for example, the area

of marketing demands from packaging differentiation and size adapted to consumption (that of

the customer and of the channel); the area of production demands a packaging sufficie ntly

standardized which permits it to optimize the number of useful changes in manufacturing lines,

obtaining high velocities and performance of the same. On the other hand, the area of purchasing

requires a packaging that allows a reliable supply in agreement with needs and the cheapest

possible cost, while in the area of logistic it needs a packaging that makes good use of the volume

COMMER

CIAL

REQUIRE

MENTS

COMMER

CIAL

REQUIRE

MENTS

ENVIRONMENTAL

REQUIREMENTS

ENVIRONMENTAL

REQUIREMENTS

PRODUCTION

PRODUCTION

INFORMTION

INFORMTIONPR

OTECTION

PROTECTIO

NEFFICIENT FLOW

EFFICIENT FLOWPURCHASE AND SUPPLYPURCHASE AND SUPPLY

LOGISTIC REQUIREMENTS

PACKAGING TECHNOLOGIES

PACKAGING TECHNOLOGIES


and the available weight in the loading unit and in the logistic resources (storage, manipulation

and transportation).

Having reached this stage, it is necessary to itemize more deeply the previous requirements

contemplating the effect on all the companies of the supply chain, that is, packing companies,

distributors (platforms of distribution and retailers) and third party logistics, following Saghir's

proposals and authors´ experience. From the results of this analysis table 1 is obtained; thus

Saghir already sets out the different views that the packing companies, logistic platforms,

retailers and logistic operators (third party logistics) have. This view is complemented and

expanded by the authors of this paper with the implications of packaging manufacturers, as can

be observed in the table 1.

The table shows the different requirements (in agreement with the functions presented

previously) that companies, of a certain supply chain, grant to a suitable design of packaging.

With the previous table in mind, it would be possible to appraise the importance that each one of

the previous requirements has in the supply chain in terms of the strategic evaluation of each

factor (evaluation that companies grant to the strategic importance of the requirement) weighted

by the number of parts of the supply chain that find themselves affected by the aforementioned.

In like manner, the existent relationships among these requirements and the three hierarchic

levels within packaging are identified. Thus, packaging is intimately connected with the product

itself, at least the primary packaging, for which the choice of the aforementioned packaging

depends on the properties of the product and of the perception of the consumer of the same.

Independently of the price, the aspects of marketing and the packaging appearance is found

among the most important factors that affect the product positioning. In this way, the selection of


the primary packaging is often decisive (and at least it is intimately related) in the election of the

correspondent secondary packaging and, sometimes, even for the tertiary.

DIS

TR

IBU

TIO

N P

LA

TF

OR

M

RE

TA

IL O

UT

LE

T

Image and promotion of sales * * 1 1Sales * * 1 1 1Ergonomics for the user (facility of use) * * 1 1costs of design and development of packaging * * 1 1Costs of breakage and claims * * * 1 1 1 1Environmental impact of packaging * 1 1 1 1 1Cost of waste management (reverse logistics) * * * 1 1 1productive flexibility manufacture of packaging * * * 1Manufacturing costs of packaging * * * 1Package and packing costs * * * 1Flexibility of the packing and package process * * * 1Protection of products * * 1 1 1 1Abilility to pile * * 1 1 1 1stability * 1 1 1 1Weight of packaging * * 1 1 1 1Supply reliability of raw materials for manufacture ofpackaging * * * 1

Costs of raw materials for packaging * * * 1Supply reliability of raw materials for manufacture ofpackaging 1Cost of packaging * * * 1 1Cost of supply of packaging * * * 1logistic cost of finished product to client (manipulation,storage, transportation) * * 1 1 1 1Efficiency in picking * * * 1 1 1efficiency in manipulation to shelf * * 1Use of shelves´ retail outlet * * 1Height of unit loads * 1 1 1

INFORMATION Efficiente logistics identification & information * * * 1 1 1 1 1

TE

RT

IAR

Y P

AC

KA

GIN

G

PA

CK

ER

DISTRIBUTOR

ENVIRONMENTAL REQUIREMENTS


PRODUCTION REQUIREMENTS

PROTECTION REQUIREMENTS

FLOW REQUIREMENTS

PURCHASE AND SUPPLY

EFFICIENT FLOW

COMMERCIAL REQUIREMENTS

DESCRIPTION

TYPE OF PACKAGING EFFECTS STAGE OF THE SUPPLY CHAIN

PA

CK

AG

ING

MA

NU

FA

CT

UR

ER

TH

IRD

PA

RT

Y L

OG

IST

ICS

PRIM

AR

Y P

AC

KA

GIN

G

SEC

ON

DA

RY

PA

CK

AG

ING

Table 1. The importance of the design requirements of packaging in the supply chain.

In addition, the previous decision also depends on which part of the supply chain has the most

influence in the decision of the primary packaging. The parameters that they can influence in the

aforementioned decision are two: On the one hand, the degree of power in the chain and, on the


other hand, the importance of the brand. If the distributing companies dominate the packing

companies, the importance of packaging can be in what the retailer considers priority. This

situation is far from the nearly utopian situation described in the previous epigraph concerning

the management of the supply chain where confidence and collaboration are essential (this being

the spirit, for example, of the initiative ECR).

It is pertinent to highlight that the secondary container is one of the elements with more potential

of influence in the carrying out of political logistics, since it represents the "frontier" between the

logistic system and the packaging system. Studies such as those belonging to Henriksson (1997),

Johnsson (1998) and Saghir (2002) expose the conflict between the legitimate interests of the

marketing area and those of the logistic area when having to make a choice among distinct

packaging alternatives. Once established the strategic evaluation of each of the designing

requirements of the packaging it is necessary to establish a suitable organizational structure and a

suitable methodology which permits the carrying out of this process successfully.

In relation to the organizational structure, it should be multi- functional and multi-company in

order to contemplate all of the logistic, commercial and environmental requirements that the

packaging is subjected to. Thus, the authors propose an organizational structure to accomplish the

design and rationalization of the packaging based on three different teams: the Design Team, the

Implementation Team and the Support Team (see figure 3).

The Design Team is the central nucleus which the project revolves around. The team in charge of

leading the study and making decisions of implementation of new packaging intimately related

with the design of new products. In this way, this team is responsible, not only of establishing

courses of action but, also, of carrying out the follow-up of the adaptation of agreed measures.


All the areas related with the packaging design, such as logistics, production, marketing,

purchasing, quality, etc. should be represented in this Design Team.

The Implementation Team, however, has the role of carrying out the decisions agreed on by

Design Team, proposing and examining packaging alternatives that subsequently will be

presented for approval by the Project Team. In like manner, it is the team responsible of

coordinating all of the activities necessary for the carrying out of tests (selection and the hiring

of packing and package equipment, the request of samples from suppliers, measurements, etc.).

This team's composition can be, either permanent or non-permanent, depending on the

peculiarities of the packaging that is being analysed (for example, according to the kind of

market, the type of channel to which it is directed, productive technology, etc.)

Figure 3. Organizational Structure for the Design of Packaging

Finally, the Support Team has the role of serving as a consultative organ for the Design Team

and the Implementation Team, especially in technical matters, typically presented by

DESIGN TEAM ofPRODUCT/PACKAGING

IMPLEMENTATIONTEAM 1

DISTRIBUTORS

MANUFACTURERS OFPACKAGING

PRODUCTION LOGISTICS COMMERCIAL PURCHASE QUALITY ...

IMPLEMENTATION TEAM i

...

SUPPORTTEAM

COMPANY REMAINING SUPPLY CHAIN

DESIGN TEAM ofPRODUCT/PACKAGING

IMPLEMENTATIONTEAM 1

DISTRIBUTORS

MANUFACTURERS OFPACKAGING

PRODUCTION LOGISTICS COMMERCIAL PURCHASE QUALITY ...

IMPLEMENTATION TEAM i

...

SUPPORTTEAM

COMPANY REMAINING SUPPLY CHAIN


representatives of the suppliers of packaging and by the channel of commercialization. The result

of the coordinated work of these teams is the feasibility of the design and implantation of the

packaging, insuring that all the different requirements that were set out initially are looked at,

taking the four basic decisions associated to the packaging design, that is, the selection of

materials, the selection of graphic art, the selection of the packaging dimensions and the group's

selection (number of primary containers per secondary container).

In addition, from a methodological focus, the authors establish 7 stages for carrying out the

design and the implantation of the packaging: the definition of objectives and the range of the

study (products included in it), the design of the study (definition of organizational structure and

the methodology of work ), the present-day analysis of the situation and market trends, the

analysis and selection of alternatives of packaging, the carrying out of tests and validation of

alternatives, the implantation of new packages and the follow-up and improvement of implanted

solutions.

Having arrived at this point, it seems reasonable to establish a series of actions that could be used

as guide or reference to the companies in this designing process, based on the concept of "Best

Practices". Relative to the concept of "best practices" we suggest that "benchmarking" should be

considered as a "systematic procedure to identify the best practices and modify the present-day

knowledge to attain a superior performance" (Camp, 1989) or as a "method for the continuous

improvement that implies a progressive and systematic evaluation and the incorporation of

products, services and external processes known as representative of best practices" ( Macneil et

al., 1994). In practice, this concept supposes the adoption of the philosophy of "improve

performance without using methods of reinventing the wheel which are expensive, uncertain and

extensive in time" (Santhouse, 1999) and suggests that there is a number of variables that have a


significant impact in a company's success which competes in a given sector and that Leidecker et

al. (1984) had already defined as critical factors of success.

In this context, from a revision of the existent bibliography on the subject (among others: Paine

(1991), AECOC (1996), DULOG (1997), Henriksson (1997), Johansson et al. (1997), Johnsson

(1998), Cervera (1998), Twede (2000), Saghir (2002) and Torrado (2002)), the authors have

established a relation of best practices related to the design of packaging that are set out in table 2

and have been catalogued in two large groups: those of an organizational character and those

associated to the requirements of design (which have been classified according to the

classification of designing requirements, that is, commercial, logistic and environmental

requirements ).

Given that each of the above-mentioned best practices, not all are critically equal in its

application which will depend, basically, on the positive consequences that they will have on

each one of the designing requirements and of the actual strategic importance of each one of

these requirements. Thus, on the basis of previous bibliographic revision and the personal

interviews carried out by the authors in the study that will be presented later, we can combine

tables 1 and 2, identifying the relative importance of each practice in the context of the strategic

importance of the set of designing requirements (see table 3, at the end of the paper ).

This model is based on the technical QFD'S functioning (Quality Function Deployment), a

method developed in Japan at the end of the 60's by the investigators Shigeru Mizuno and Yoji

Asao, with the objective of developing a system of quality assurance that would permit

integrating the needs of clients in the design of products, before these are manufactured.

Deepening a little further in the utility of the proposed method, the relative importance obtained

in each practice can be contrasted with the levels of implantation or evaluation granted by each


one of the collectives of the supply chain studied with the objective of identifying "gaps" or

opportunities for improvement related with packaging.

DESCRIPTION OF BEST PRACTICES

COORDINATION BETWEEN BUSINESS AREAS IN THE DESIGN OF PACKAGING

COLLABORATION WITH DISTRIBUTORS IN THE DESIGN OF PACKAGING

COLLABORATION WITH MANUFACTURERS OF PACKAGING IN ITS DESIGN

DOCUMENTATION OF THE DESIGN PROCESS OF PACKAGING

USE OF COMPUTER TOOLS IN THE DESIGN OF PACKAGING

CONTEMPLATE THE EFFECT OF PROMOTIONS ON THE DESIGN OF PACKAGING

PROOF OF COMMERCIAL ACCEPTANCE IN THE MARKET OF NEW PACKAGING

USE OF LCA TECHNIQUE IN THE DESIGN OF PACKAGING

PLAN FOR PREVENTION OF PACKAGING WASTE

"GREEN SPOT" IN PACKAGING

EXCHANGE OF PALLETS

REUSE OF PACKAGING

FLEXIBLE SYSTEMS OF PACKAGING

EFFICENT AND AUTOMATIC SYSTEMS OF PACKAGING

PROOF OF RESISTANCE IN THE MARKET OF NEW PACKAGING

NON-CROSSED PALLETIZATION

DEFINITION OF MAXIMUM WEIGHT OF UNIT LOAD

PROTECTION OF UNIT LOAD (CORNER BRACKETS, SEPARATING SHEETS,...)

KNOWLEDGE OF PRODUCTIVE PROBLEMS OF MANUFACTURERS OF PACKAGING AND PACKERS

DOCUMENTED SPECIFICATIONS OF THE QUALITY OF MATERIALS OF PACKAGING

STANDARDIZATION OF FORMATS AND QUALITY OF PACKAGING

PURCHASE OF PACKAGING THROUGH A BUYING OFFICE

KNOWLEDGE OF "AECOC RECOMMENDATIONS FOR LOGISTICS"

PACKAGING DIMENSIONS IN ACCORDANCE WITH MODULE 600*400mm

USE OF EUR PALLET

DEFINITION OF MAXIMUM HEIGHT OF LOAD UNIT (ACCORDING TO RAL)

EFFICIENCY OF VOLUMEN AND/OR WEIGHT OF UNIT LOAD AND PACKAGING

USE OF COMPUTER TOOLS IN THE PROCESS OF PICKING

PALLETIZATION INSTRUCTIONS AVAILABLE IN THE SUPPLY CHAIN

IDENTIFICATION OF PACKING WITH INK INJECTORS OR LABELS

USE OF BAR CODES EAN 13 IN CONTAINERS

USE OF BAR CODES EAN 128 IN PACKING AND LOAD UNITS

USE OF ELECTRONIC DATA INTERCHANGE (EDI) WITH CLIENTS

USE OF ELECTRONIC DATA INTERCHANGE (EDI) WITH SUPPLIERS

GOOD ORGANIZATIONAL PRACTICES

TYPOLOGY



FLOW REQUIREMENTS

INFORMATION REQUIREMENTS

PURCHASE AND SUPPLY REQUIREMENTS

GOOD DESIGN

PRACTICES

LOGISTICAL REQUIREMENTS

PROTECTIVE REQUIREMENTS

PRODUCTIVE REQUIREMENTS

EFFICENT FLOW REQUIREMENTS

Table 2. The selection of Best Practices in the design of packaging

Application of the packaging management model to the Spanish food sector

Within the context commented in the previous epigraph, is presented the application of the

management model presented in a study carried out by a team of the University of Vigo (Spain)


amongst 307 companies of the Spanish food sector (food packers, packaging manufacturers and

distributors) set out below in Table 4.

In the application of the model proposed in the Spanish food sector, when identifying the

importance of each of the packaging design requirements it was decided to prorate the

evaluations of each of the collectives’ contempla ted (packers, distributors and packaging

manufacturers) and to use a scale of 1-5.

Universe: Spanish distributing

companies with over 6

million € turnover

Spanish packaging

manufacturing

companies with over 6


Spanish packing

companies of food

products with over 6


Method of

collection of

information

Personal and postal

techniques with the

support of a mixed

and structured

questionnaire

Personal and postal

techniques with the

support of a mixed and

structured questionnaire

Personal and postal

techniques with the

support of a mixed and

structured questionnaire

Size of universe: 166 companies 380 companies 1.499 companies

Valid

questionnaires

30 distributing

companies (rate of

answers 18 %)

68 manufactures of

packaging (rate of

answers 17.89%)

209 packing companies

(rate of answers

13.94%)

Interviewee’s

profile

Logistics managers Directors and

production managers

Logistics/production

managers

Table 4. The technical file of the study of packaging in the supply chain of the Spanish food sector


Thus, for packing companies the most important requirements are the protection of the product,

followed by commercial and productive aspects. This proposal is similar to that shown by

distributing companies, given that the protective requirements continue to be the most important

factor, followed by the commercial factor. Finally, the packaging manufacturing companies state

that the most important requirements are those of protection, followed by those of productive,

logistics, and commercial requirements. In like manner, there exists unanimity in three groups,

and the least important aspect is the environmental factor.

The mean values of each of the designing requirements have crossed with the same consequences

as those of the application of best practices, in accordance with the systematic commented in the

previous epigraph, obtaining the relative evaluations shown in table 3 (at the end of the paper).

The evaluation or level of implantation of each of the best practices presented in the theoretical

model reflects the answers of the companies of the study, be it the percentage of companies that

use the identified practice or the importance granted to that practice in a scale of evaluation 1-5 of

Likert ( where 1 is "poorly valued" or "not very important" and 5 "highly valued or very

important"). These aforementioned evaluations have been assimilated to a percentage (to

maximum mark of 5) in order to be able to carry out the comparison.

Examining in more detail the table of results, we obtain the result that the level of importance

and/or of implementation of best practice s of an organizational nature is below the strategic

importance that these companies have and in all the effected collectives, except collaboration

with packaging manufacturers. In addition, it is highlighted the strategic importance of all best

practices presented in the previous table.

In relation to best practices associated to the designing requirements, it is indicated that the most

important ones (see table 5), from a strategic point of view, are those of knowledge of the


recommendations of RAL of AECOC, the efficiency in volume and/or in the weight of load units,

and those of packaging, the re-utilization, the use of the pallet EUR and the standardization of

formats and packaging qualities. In all these practices, the level of importance and/or

implantation stated by companies is below strategic importance except in the use of the pallet

EUR (all the collectives studied) and in the standardization of formats and qualities (only

packaging companies).

DESCRIPTION OF BEST PRACTICES

RE

LA

TIV

E S

TR

AT

EG

IC

MP

OR

TA

NC

E O

F "

BE

ST

PRA

CT

ICE

"

PA

CK

ER

S

DIS

TR

IBU

TO

RS

MA

NU

FAC

TUR

ER

S O

F P

AC

KA

GIN

G

COORDINATION BETWEEN BUSINESS AREAS IN THE DESIGN OF PACKAGING 100% 47.85%

COLLABORATION WITH DISTRIBUTORS IN THE DESIGN OF PACKAGING 94% 48.20%

COLLABORATION WITH MANUFACTURERS OF PACKAGING IN ITS DESIGN 81% 91.18%

DOCUMENTATION OF THE DESIGN PROCESS OF PACKAGING 100% 33.97% 76.47%

USE OF COMPUTER TOOLS IN THE DESIGN OF PACKAGING 86% 31.58%

CONTEMPLATE THE EFFECT OF PROMOTIONS ON THE DESIGN OF PACKAGING 68% 76%

PROOF OF COMMERCIAL ACCEPTANCE IN THE MARKET OF NEW PACKAGING 26% 40.19%

USE OF LCA TECHNIQUE IN THE DESIGN OF PACKAGING 27% 12.92% 11.76%

PLAN FOR PREVENTION OF PACKAGING WASTE 23% 53.11% 30.00% 67.65%

"GREEN SPOT" IN PACKAGING 25% 93.78%

EXCHANGE OF PALLETS 23% 74.02% 84.62% 67.21%

REUSE OF PACKAGING 81% 20.10% 33.33% 50.00%

FLEXIBLE SYSTEMS OF PACKAGING 25% 74.40% 76.60%

EFFICENT AND AUTOMATIC SYSTEMS OF PACKAGING 25% 69.60% 71.80%

PROOF OF RESISTANCE IN THE MARKET OF NEW PACKAGING 49% 60.29% 82.35%

NON-CROSSED PALLETIZATION 39% 21.57%

DEFINITION OF MAXIMUM WEIGHT OF UNIT LOAD 48% 52.45% 64.60% 29.51%

PROTECTION OF UNIT LOAD (CORNER BRACKETS, SEPARATING SHEETS,...) 50% 60.60%

KNOWLEDGE OF PRODUCTIVE PROBLEMS OF MANUFACTURERS OF PACKAGING AND PACKERS 22% 61.40% 42.80% 56.80%

DOCUMENTED SPECIFICATIONS OF THE QUALITY OF MATERIALS OF PACKAGING 16% 77.99% 89.23%

STANDARDIZATION OF FORMATS AND QUALITY OF PACKAGING 63% 76.40% 51.60%

PURCHASE OF PACKAGING THROUGH A BUYING OFFICE 12% 23.33% 40.00%

KNOWLEDGE OF "AECOC RECOMMENDATIONS FOR LOGISTICS" 100% 47.06% 63.33% 25.00%

PACKAGING DIMENSIONS IN ACCORDANCE WITH MODULE 600*400mm 58% 65.40%

USE OF EUR PALLET 70% 95.50% 92.6% 78.69%

DEFINITION OF MAXIMUM HEIGHT OF LOAD UNIT (ACCORDING TO RAL) 51% 66.67% 68.6% 75.4%

EFFICIENCY OF VOLUMEN AND/OR WEIGHT OF UNIT LOAD AND PACKAGING 91% 73.60% 68.6% 80.60%

USE OF COMPUTER TOOLS IN THE PROCESS OF PICKING 44% 11.76% 46.67%

PALLETIZATION INSTRUCTIONS AVAILABLE IN THE SUPPLY CHAIN 57% 72.55% 72% 77.05%

IDENTIFICATION OF PACKING WITH INK INJECTORS OR LABELS 31% 56.20%

USE OF BAR CODES EAN 13 IN CONTAINERS 25% 90.60%

USE OF BAR CODES EAN 128 IN PACKING AND LOAD UNITS 55% 53.59% 40.60% 35.38%

USE OF ELECTRONIC DATA INTERCHANGE (EDI) WITH CLIENTS 40% 36.36% 30.77%

USE OF ELECTRONIC DATA INTERCHANGE (EDI) WITH SUPPLIERS 29% 16.75% 47.40% 29.23%

EVALUATION/ APPLICATION OF

COMPANIES


TYPOLOGY



FLOW REQUIREMENTS

INFORMATION REQUIREMENTS

PURCHASE AND SUPPLY REQUIREMENTS

GOOD DESIGN

PRACTICES

LOGISTICAL REQUIREMENTS

PROTECTIVE REQUIREMENTS

PRODUCTIVE REQUIREMENTS

EFFICENT FLOW REQUIREMENTS

Table 5. The “Best Practices” in packaging design in the Spanish food supply chain

Other practices of less strategic importance, but whose level of importance for companies and or

level of implantation is lower, is the use of the technique LCA (Life Cycle Assessment) in the


packaging design, the use of non-crossed palletization, the use of computer tools that give

support to the process of picking in packing companies, the use of the bar code EAN 128 in the

load units and in packing and the use of electronic interchange of data with clients and suppliers

(in the latter case, only for packing companies).

Conclusions

The marked competitive surroundings in which companies develop their activities in, especially

those belonging to the food sector, make that they should carry out actions to improve the

standards of quality, service and cost that they have on offer in the market. This need has some

important implications in the design, development and implementation of packaging. In this, the

increase of complexity in the management of the supply chain and in the chain of

commercialization of products has not gone hand in hand with a change in the management of the

design of packaging.

Along these lines, the model proposed in this paper, presented from a comprehensive perspective

of the supply chain, permits us to connect strategic proposals and the operative activities in the

packaging designing process, identifying, at the same time, the opportunities for improvement in

companies that leads to an improvement of its competitiveness. This model fills an existing space

at an academic level in the analysis of the consequences that packaging has in the correct

functioning of the supply chain.

Thus, granted that it is very difficult that a sole business area or company contributes different

views points associated to the design, development and implantation of packaging (meaning the

protective, commercial, productive, logistic and environmental focus), it seems reasonable that a

formal systematic exists, so that in a consensual form, this process is tackled. In this process, not


only the internal company departments should participate but, packaging manufacturers should

also actively take part and the actual commercial distribution (clients) should take part in

consonance with the initiative JIT and ECR.


PA

CK

ER

S

DIS

TRIB

UTO

RS

PA

CK

AG

ING

MA

NU

FA

CT

UR

ER

S

ME

AN

DIS

TR

IBU

TIO

N P

LA

TFO

RM

RE

TA

IL O

UT

LE

T

3.97 3.93 3,7 3,7 Image and promotion of sales1 1 7.4 (a)

3.97 3.93 3,7 3,7 Sales 1 1 1 11.13.97 3.93 3,7 3,7 Ergonomics for the user (facility of use)

1 1 7.43.97 3.93 3,7 3,7 costs of design and development of packaging 1 1 7.43.97 3.93 3,7 3,7 Costs of breakage and claims 1 1 1 1 15.33.25 3.04 3,56 3,56 Environmental impact of packaging 1 1 1 1 1 17.83.25 3.04 3,56 3,56 Cost of waste management (reverse logistics) 1 1 1 9.93.75 3,89 3,89 productive flexibility manufacture of packaging

1 3.893.75 3,89 3,89 Manufacturing costs of packaging 1 3.893.75 3,89 3,89 Package and packing costs 1 3.893.75 3,89 3,89 Flexibility of the packing and package process 1 3.894.3 4.03 4,27 4,27 Protection of products 1 1 1 1 17.14.3 4.03 4,27 4,27 Abilility to pile 1 1 1 1 17.14.3 4.03 4,27 4,27 stability 1 1 1 1 17.14.3 4.03 4,27 4,27 Weight of packging 1 1 1 1 17.1

3.55 3.62 3,89 3,89Supply reliability of raw materials for manufacture ofpackaging 1 3.89

3.55 3.62 3,89 3,89 Costs of raw materials for packaging 1 3.893.55 3.62 3,89 3,89 Supply reliability of raw materials for manufacture of

packaging 1 3.893.55 3.62 3.89 3,89 Cost of packaging 1 1 7.783.55 3.62 3.89 3,89 Cost of supply of packaging

1 3.893.55 3.62 3.89 3,89 logistic cost of finished product to client (manipulation,

storage, transportation) 1 1 1 1 15.63.55 3.62 3.89 3,89 Efficiency in picking 1 1 1 11.73.55 3.62 3.89 3,89 efficiency in manipulation to shelf 1 3.893.55 3.62 3.89 3,89 Use of shelves´ retail outlet

1 3.893.55 3.62 3.89 3,89 Height of unit loads 1 1 1 11.7

INFORMATION 3.55 3.62 3.89 3,89 Efficiente logistics identification & information 1 1 1 1 1 19.5

"SER" = MEAN * (NUMBERS OF "1")

EFFECTS STAGE OF THE SUPPLY CHAIN

TH

IRD

PA

RT

Y L

OG

IST

ICS

DISTRIBUTOR

PAC

KE

R

PAC

KA

GIN

G M

AN

UFA

CT

UR

ER



LOGISTIC REQUIREMENTS PURCHASE AND SUPPLY

EFFICIENT FLOW


STR

AT

EG

IC E

VA

LU

AT

ION

OF

RE

QU

IRE

ME

NT

(SE

R)

IMPORTANCE OF REQUIREMENTS OF DESIGN


FLOW REQUIREMENTS

DESCRIPTION

Table 3. Improving opportunities in the design of packaging in the supply chain of the Spanish food sector (a)


Image and promotion of sales 7.4 (a) 1 (a) 1 1 1 1 1 1 1 1 1 1 1 1Sales 11.1 1 1 1 1 1 1 1 1 1 1 1 1 1Ergonomics for the user (facility of use) 7.4 1 1 1 1 1 1 1 1 1costs of design and development of packaging 7.4 1 1 1 1 1 1 1 1 1 1 1 1 1Costs of breakage and claims 15.3 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1Environmental impact of packaging 17.8 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1Cost of waste management (reverse logistics) 9.9 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1productive flexibility manufacture of packaging 3.89 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1Manufacturing costs of packaging 3.89 1 1 1 1 1 1 1 1 1 1 1Package and packing costs 3.89 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1Flexibility of the packing and package process 3.89 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1Protection of products 17.1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1Abilility to pile 17.1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1stability 17.1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1Weight of packging 17.1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1Supply reliability of raw materials for manufacture ofpackaging 3.89

1 1 1 1 1 1 1Costs of raw materials for packaging 3.89 1 1 1 1 1 1 1 1Supply reliability of raw materials for manufacture ofpackaging 3.89 1 1 1 1 1 1 1 1 1 1 1 1Cost of packaging 7.78 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1Cost of supply of packaging 3.89 1 1 1 1 1 1 1 1 1 1 1 1logistic cost of finished product t o client (manipulation,storage, transportation)

15.6 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1Efficiency in picking 11.7 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1efficiency in manipulation to shelf 3.89 1 1 1 1 1 1 1 1 1 1 1 1Use of shelves´ retail outlet 3.89 1 1 1 1 1 1 1 1 1 1 1Height of unit loads 11.7 1 1 1 1 1 1 1 1 1 1 1 1 1 1Efficiente logistics identification & information 19.5 1 1 1 1 1 1 1 1 1 1 1

239,987 225,24 195,16 239,987 206,54 141,5 53,953333 56,84 49,1067 52,9733 48,3867 169,447 52,6 52,6 102 82,6667 101,1 104,787 45,1333 33,8067 131,107 26,0733 209,593 122,517 146,067 107,753 191,567 93,0067 119,8 64,1067 52,5133 115,24 83,4267 61,3067

100 94 81 100 86 68 26 27 23 25 23 81 25 25 49 39 48 50 22 16 63 12 100 58 70 51 91 44 57 31 25 55 40 29

ABSOLUTE STRATEGIC IMPORTANCE OF THE BEST PRACTICE (SER (a)* BEST PRACTICE (a)+…)

RELATIVE STRATEGIC IMPORTANCE OF THE BEST PRACTICE (% OF THE HIGHEST ABSOLUTE STRATEGIC IMPORTANCE OF THE CATEGORY- ORGANIZATIONAL OR DESIGN)

US

E O

F E

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PROTECTIVE REQUIREMENTS PURCHASE AND SUPPLY REQUIREMENTS

EFFICENT FLOW REQUIREMENTS INFORMATION REQUIREMENTS

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(A

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DESCRIPTION

STR

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GOOD DESIGN PRACTICES

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N P

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EX

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AN

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OF

PA

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FLOW REQUIREMENTS


ENVIRONMENTAL REQUIREMENTS PRODUCTIVE REQUIREMENTS

CO

LLA

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RA

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N W

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DIS

TR

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THE

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IN IT

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US

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R T

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LS IN

TH

E P

RO

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SS

O

F P

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ING

US

E O

F E

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PA

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T

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RC

HA

SE

OF

PA

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AG

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TH

RO

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OF

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OF

"AE

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EN

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NS

FO

R L

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PA

CK

AG

ING

DIM

EN

SIO

NS

IN A

CC

OR

DA

NC

E

WIT

H M

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600

*400

mm

ST

AN

DA

RD

IZA

TIO

N O

F F

OR

MA

TS

AN

D

QU

ALI

TY

OF

PA

CK

AG

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RE

US

E O

F P

AC

KA

GIN

G

Table 3. Improving opportunities in the design of packaging in the supply chain of the Spanish food sector (b)


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