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Part of BillerudKorsnäs Group This document contains information belonging to Paccess which is privileged and confidential. Any unauthorized copying, use or distribution of this material is strictly prohibited.

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Should be running right after I hit the podium. I’ll adjust notes and what not for 15 seconds.


TLC CONFERENCE Packaging Protection Overview March 17, 2014 Rick Hawley

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Part of BillerudKorsnäs Group This document contains information belonging to Paccess which is privileged and confidential. Any unauthorized copying, use or distribution of this material is strictly prohibited. 3

Presenter

Presentation Notes

We have a program that allows us to see a large amount of new items for a large retailer One time we received an attempt at round boxes! Not the best for the supply chain.


Presenter

Presentation Notes

Excessive, creative use of tape An example of the carton and how it ought to be


THE CHALLENGE WITH PACKAGING GLOBALLY SOURCED PACKAGING IS NOT DESIGNED WITH SUPPLY CHAIN EFFICIENCY OR BRAND NEEDS IN MIND

The Result…..Loss of Packaging Control • Lack of packaging cost transparency • Packaging not optimized for the supply chain, over/under specified • Excessive freight spend • Unapproved changes made by factory • Packaging doesn’t meet performance standards • Inaccurate product data; product claims, weights, measures • Barcodes not readable at automated distribution centers

Who Has These Challenges…..Brands that Source Packaging Globally • Retailers • Private Label • Apparel • Footwear • Toy

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• Automotive • Home Goods • Fresh Produce Suppliers • Sporting Goods • Heavy Industrial

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Presentation Notes

Paccess is in this space – to help companies solve this challenge with packaging Specifically this is the inbound product supply chain when product is manufactured overseas and import to North America or Europe There are many different brands that have this problem. Even if you’re a brand that owned and operated by a retailer


THE ELEMENTS OF GOOD PACKAGING THE COMPONENTS OF GOOD PACKAGING DESIGN THAT WORKS FOR THE SUPPLY CHAIN – EASY TO SAY, HARDER TO ACHIEVE

Design the right box

Size the right box

Source the right box

Pack the right box

Protection is the number one goal of packaging!

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Presenter

Presentation Notes

Today we will be talking about packaging development and what to consider for protection We’ll also talk about the testing needed and how the National Motor Freight and Railroad packaging rules are used We’ll talk a little about


SUPPLY CHAIN WE LIVE IN THIS WORLD

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THE TREMENDOUS COST OF DAMAGED PACKAGING THE NUMBER ONE GOAL OF PACKAGING IS TO PROTECT THE PRODUCT. THE REASON IS SIMPLE, THE COST OF RETURNS AND DAMAGED PRODUCT IS HUGE

According to an Aberdeen Group Study in 2010 ...the average manufacturer will spend 9% to 15% of total revenue on returns

“Reverse logistics is no small matter in the supply chain ... “Total U.S. revenue impacted by returns is estimated between $52 billion and $104 billion.”

Unsaleables are estimated to be a $15 billion annual cost to the grocery industry (or 1 percent to 2 percent of gross sales on average)

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Presenter

Presentation Notes

It is difficult to get a specific number for just protection related issues The one that is closest is the Unsaleables number for the grocery industry – roughly half of unsableables are due to protection Reverse logistics and returns are increasingly becoming an area of C level focus because of the potential value driven by solving those problems


CORRUGATED BOARD BASICS TRANSPORT PACKAGING MATERIALS

Liners and Medium

Fluting: ACBEF ... Other microflutes

Singlewall board

Doublewall and Triplewall

Starch based adhesive

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THE PACKAGING DESIGN PROCESS THE WAY WE APPROACH IMPLEMENTING A TRANSPORT PACKAGING PROGRAM WITH PROTECTION IN MIND

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Presenter

Presentation Notes

This is generally the steps for developing a transport packaging program This could be 150 product factories and could be in several S. Asia countries We find that many product vendors hide costs in the packaging or use packaging as a revenue source – most companies are focused on the product


NATIONAL MOTOR FREIGHT RULES AND PACKAGING THE CARRIER RULES ARE CALLED ITEM 222 FOR THE NMFC AND RULE 41 FOR THE UFC (RAIL)

Minimum strength standards that must be met for claims

Performance based specifications depending on the weight and outside dimensions of a carton with its product

ECT added as a performance spec in 1991 = good news!

ECT allows for greater strength at lower basis weight (amt of fiber in paper)

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Presenter

Presentation Notes

These tables use outside dims and weight to determine minimum performance spec We used to choose a spec two steps higher in order to specify packaging in China – we don’t need to do that any more The performance of a box is important for the BMC – the box makers certificate


BMC EXPLAINED

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Burst strength of the carton – the amount of force to puncture. There’s also an ECT version that’s similar

This is the summation of weight per thousand square feet of all facings in the board excluding medium and adhesives or other additives.

Not to exceed outside dimensions

Not to exceed fill weight


THE PERFORMANCE TESTS ON A CORRUGATED BOX EDGE CRUSH TEST AND BURST (OR MULLEN) ARE THE TWO TESTS RECOGNIZED BY THE NMFC (MOTOR FREIGHT) AND UFC (RAILROAD) ASSOCIATIONS

TAPPI – Technical Arm of the American Pulp and Paper Industry

Establishes testing methods for testing paper and packaging

Two relevant tests T811 – Edge Crush Test T810 – Burst or Mullen

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Presenter

Presentation Notes

These two tests are the basic tests you perform in order to understand the performance of a box – I’m going to discuss another set of tests in a minute Sometimes there are regional ways to order a carton – in S. China, in some industries like toys they refer to pacakging by the papers: A3A, B3B, or A33A, or B33B which refers to loosely the papers used in the construction – however that notation doesn’t tell you what you really want to know: the ECT strength or the Burst strenght


USE BURST OR ECT? THERE ARE A LOT OF OPINIONS ON WHEN TO USE A BURST OR ECT – THE ANSWER IS “IT DEPENDS ON YOUR SUPPLY CHAIN”

Burst specification – a function of the liner – puncture resistance Apparel and softgoods Floor loaded containers – smaller cartons Rough handling Where product leaves open voids

ECT is used when product in the supply chain requires a lot of stack strength When product is shipped in unitized loads (pallets and film wrapped) Stacked long periods of time before sale or use If you have high stacking heights in your DC or other parts of the supply chain – some DC’s do not have racking When stacking strength is more important than puncture resistance

Work with packaging engineers to build packaging at the paper levels – specific liners and mediums that meet both ECT and burst or your specific supply chain

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Presenter

Presentation Notes

ECT is different than Burst in terms of the paper – When the carriers rules allowed for ECT, that meant that the cost of packaging could come down a little when compared to a burst spec only. ECT Was allowed as a spec in I believe 1991 Burst is the physical property of the liners to resist puncture resistance. If you see elements of the supply chain that is like the movie I showed in the beginning then you will have


ADDITIONAL TESTING DEPENDING ON SUPPLY CHAIN IN THE COLD SUPPLY CHAIN OR SHIPPING VERY HEAVY ITEMS, ADDITIONAL TESTING MIGHT BE USED TO DETERMINE THE BEST SPECIFICATION

Flexural Stiffness of Corrugated Board T820

BCT – Box Compression Test – platen device used to measure the failure point of the carton

ECT and the McKee formula – calculates the ability of a box to carry the weight of cartons on top

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U = box outline in mm d = thickness of corrugated board in mm

Presenter

Presentation Notes

The goal of these tests is to get the best performance for the money Some times the supply chain requires that you look at the anticipated degradation in order to make sure that when packaging will survive the environment Creep is a box failure characteristic when the box fails due to excessive moisture and compression – stacked for long periods of time – CREEP


PAPER APPROXIMATELY 70% OF THE COST OF A SHIPPING CARTON IS THE PAPER

Virgin fiber from well managed forests is best for overall strength and moisture resistance

Paper can only be effectively recycled 5-7 times

Kraft paper used in the US for protective packaging – has mostly virgin fiber, but some recycled content – 75/25

OCC – old corrugated containers Trim waste from paper mills and converters

Paper’s that are FSC or SFI certified come from well managed, sustainable forests

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TRUE PERFORMANCE BOX COMPRESSION TEST (BCT)

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Presenter

Presentation Notes

BCT = Box Compression Test Standard Conditions; average humidity short time compression test Humid Conditions; short time compression test Humid Conditions; stack of corrugated boxes short time compression test Humid Conditions; long time compression test Humid Conditions; stack of corrugated boxes long time compression test


BILLERUD FLUTE® - 220 G/M2 HOW FAR CAN WE REACH?

Billerud Flute® 220 g/m2 – so strong that it can replace wooden boxes!

PaperOutside liner Kraftliner WS 440 g/m² A-flute Billerud Flute 165 g/m² Center liner Kraftliner WS 440 g/m² A-flute Billerud Flute 165 g/m² Inside liner Kraftliner WS 440 g/m²

Package

BCT [N] 29500BCT [kg] 3000FEFCO code 201LxWxH 1000x1000x1000

PaperOutside liner Kraftliner WS 440 g/m² A-flute Billerud Flute 220 g/m² Center liner Kraftliner WS 440 g/m² A-flute Billerud Flute 220 g/m² Inside liner Kraftliner WS 440 g/m²

Package

BCT [N] 32000BCT [kg] 3260FEFCO code 201LxWxH 1000x1000x1000

Before Now


REPLACING WOODEN PACKAGING WITH PAPER

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Presenter

Presentation Notes

Reasons to use Paper instead of wood: Lighter weight Easier to recycle Less cost than solid wood No need for fumigation


IS YOUR SUPPLY CHAIN A GOLDMINE? IS THERE HIDDEN VALUE IN YOUR SUPPLY CHAIN? SOMETIMES THERE’S NICKELS, DIMES AND QUARTERS PER UNIT HIDDEN IN YOUR SUPPLY CHAIN.

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Presenter

Presentation Notes

Many brands don’t really control packaging When you began buying product from overseas, it came with a box Brands like Nike or Mattel have manufacturing in their DNA – Most retailers do not – We see it all the time, brands and retailers alike have inadvertently outsourced packaging decisions to someone who doesn’t know your supply chain and how to meet your packaging requirements If this is you, then there is likely hidden value in your supply chain


THERE’S VALUE IN CONTROLLING PACKAGING WE HAVE MANY EXAMPLES. WE GENERALLY SEE SAVINGS IN IMPROVED FREIGHT DENSITY AND IMPROVED MATERIALS, AND ALSO REDUCED DAMAGE

Right sizing the packaging to the product Increased freight density – more product units per CBM shipped 10% – 40% improvements 4%-9% freight density improvement moving from Doublewall to Singlewall shippers

Retail and Transport Packaging Redesign Smaller more efficient structures Raw material specifications that are “right fit” for the product and distribution systems Innovative structures that enhance the brand in retail Design in “Green” initiatives 5% - 30% improvement through design

Reduction in Damage Going from excessive to an acceptable damage number – for example, 16% to less than 2%

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THANK YOU!

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Presenter

Presentation Notes

In the big wide world there are a lot of variations and forces at work in the supply chain. Are you ready?


ADDITIONAL SLIDES - APPENDIX

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COATED WHITE TOP KRAFTLINER

KORSNÄS DESIGN For high quality flexo pre-print/screen/digital Superior print quality and reproduction of images High gloss

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High strength and bulk gives considerable yield saving potential Food safety – 100% pure fibres Grammages: 130, 145, 160, 175 and 200 gsm

KORSNÄS DECOR For high quality post print flexo Excellent print quality and gloss Washboard reduction in post print thanks to: High strength and stiffness – can withstand forces better High surface smoothness – less printing pressure, less glue

High strength and bulk offers considerable yield saving potential Food safety – 100% pure fibres Grammages: 120, 145 and 170 gsm

KORSNÄS SUPREME Designed for high quality offset printing and litho-laminated packaging Superior print quality and reproduction of images High strength and bulk gives considerable yield saving potential

Food safety – 100% pure fibres Can be supplied in sheets Grammages: 160, 175 and 200 gsm


WHITE TOP KRAFTLINER

KORSNÄS CLASSIC Extremely high-strength properties for:

Demanding constructions Dramatic weight savings

Washboard reduction

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High quality consistency for high printing speed and corrugator runnability Food safety – 100% pure fibres – resistance to moisture Grammages: 130, 160, 175 and 200 gsm


FULLY WHITE KRAFTLINER

BILLERUD PURE WHITE High and consistent whiteness Superior runnability Based on 100% primary fibres Produced in compliance with FDA and BfR food packaging norms

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Mainly used for food applications including fruit and vegetables Grammages: 80, 90, 100, 110, 120, 135, 170, 190 gsm

BILLERUD PURE BRIGHT Enhanced whiteness Designed for packaging of luxury products such as beauty care and fashion products

Based on 100% primary fibres Grammages: 80, 90, 100, 110, 120 and 135 gsm

BILLERUD PURE ARCHIVE Fully bleached liner specially designed to be used for archive boxes Fulfilling requirements for imposed preservation and durability

Certified for performance in accordance with ANSI/NISCO Z 39.48, ISO 9706 and ISO 16245. Basis weights: 120, 135, 170 and 190 gsm


THE RIGHT LINER FOR THE RIGHT PRINT APPLICATION

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HIGH QUALITY PRE-PRINT HIGH QUALITY POST-PRINT

OFFSET litho-laminated

FLEXO

FLEXO Premium

FLEXO Basic

SCREEN, INKJET, OFFSET

KORSNÄS SUPREME

KORSNÄS DESIGN

KORSNÄS DECOR

KORSNÄS CLASSIC

BILLERUD PURE WHITE

BILLERUD PURE BRIGHT

Meets all requirements An excellent choice in most situations

Premium Basic

Premium: Demands on high resolution and screen count, highest gloss and very good colour reproduction in high quality process printing. Basic: Basic process printing, vignettes and solids. Possibility to achieve a matt appearance.

Compared to uncoated grades, coated grades require more drying capacity and finer anilox screening in order to achieve best print result.


SEMI-CHEMICAL FLUTING

BILLERUD CENTRE LINER Semi-chemical liner based on 100% primary fibres Specifically designed for use as center liner in double wall constructions

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New possibilities for cost and performance optimisation of the corrugated construction Basis weight: 105 gsm

BILLERUD FLUTE Superior semi-chemical fluting based on 100% primary fibres Extremely high strength for boxes exposed to long demanding transport chains and humidity

High creep resistance which means high strength and durability over time with constant load in tough climates

Produced in compliance with FDA and BfR food packaging norms Mainly used for food applications including fruit and vegetables and for premium heavy duty goods Basis weights: 120, 130, 140, 150, 165 and 175 gsm

BILLERUD FLUTE LIGHT Low grammage semi-chemical fluting Produced from 100% primary fibres

Particularly suitable for micro corrugated and food contact applications Basis weights: 105 gsm

BILLERUD FLUTE S Semi-chemical fluting with consistent quality and excellent runnability Recycled fibre content Particularly suitable for fruit and vegetables and industrial products

Produced in Skärblacka which is certified in accordance with ISO 9001, ISO 14 001 Basis weights: 112, 127, 140, 150 and 165 gsm


ANALYSIS OF PAPER PROPERTIES

CCT, Corrugated Crush Test The maximum compression force per unit length that a laboratory corrugated test piece can support until the onset of break, where the force is applied in the direction of the flute tubes. SCAN-P42

CMT, Corrugated Medium Test The maximum force, expressed as the mean force in Newton, that a laboratory corrugated test piece will withstand before the flutes collapse, under an increasing force applied perpendicular to its surface. ISO 7263

Z-strength The maximum tensile strength per unit area, expressed in kPa, that a paper can withstand until the onset of break, when the force is applied perpendicular to its surface. SCAN-P80


CORRUGATED BOARD/BOX ANALYSIS

ECT, Edgewise Compression Test The maximum compression force a test piece of corrugated board can withstand without collapsing, with the flutes standing perpendicular to the plane. (ISO 3037)

4-point bending stiffness Bending stiffness relates the bending moment to the resulting deflection in the elastic area, and is mainly determined by the thickness of the material together with the quality (mainly tensile stiffness) of the inner and outer liners. (ISO 5628)

BCT, Box Compression Test The maximum compression force a corrugated box can withstand without collapsing. The BCT value can be estimated theoretically by using the ECT-value, the bending stiffness in both machine and cross-machine directions and the periphery of the box (McKee formula). (ISO 12048)

FCT, Flat Crush Test TAPPI T825

Bottom deflection UNE 49706, UNI 6719

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