the packaging summit, 13 -15 may, 2008, rosemont, … packaging summit, 13 -15 may, 2008, rosemont,...
TRANSCRIPT
The Packaging Summit, 13 -15 May, 2008, Rosemont, IL, USA
Robert Wilson. ChairmanAnia Krolak. Consultant
Johan Carlsson. Consultant
PACKAGING DESIGN VS. PROCUREMENT
The Pöyry Group
Net sales € 720mPersonnel 7,200
EnergyPersonnel 1,800
Infrastructure & Net sales € 220mPersonnel 2,400
Paper, PackagingNet sales € 280mPersonnel 3,000
EnergyNet sales € 220mPersonnel 1,800
Infrastructure & EnvironmentNet sales € 220mPersonnel 2,400
Consulting•Consumer Packaging Strategies•Packaging Procurement•Sustainable Businesses
•Renewables•Markets and Policies•Sector/Producer Strategies•Plant Design and Operations
•Waste Management•Municipal Waste Strategies•Organics•Policy Framework
Sustainability: As a Business Driver - Where it Began…
Greenhouse gases, Climate changeCarbon
Forest certification
Geneticallymodified
organisms
1994 1997 2000 2003
Level of
Attention
Low199019801970
Old growthforests
Recycling
Clear cutting
Nuclear power
Hg
BOD SO2
Extreme
HCHO
The environment has been a growing force over 30 years. Issue follows issue, but with a residual accumulating impact. The collective direction is one of ‘sustainability’ – of life, quality, aspiration.
2007
Health
Chemicals (REACH)
Sustainability
+PackagingWaste
Time
Water, Air, Food ?
Based on survey of issue intensity – articles, profiles, debate
Packing design and procurement are drawn into this
Packaging Design vs. Packaging Procurement
Marketing
New Product Development
R&D
New Packaging
Design Packaging Procurement
LogisticsManufacturing
Conflict ?Resolution ?
Packaging Design
Value <1% of sales New product, renovation
Packaging Procurement
10-15% of sales= cost reduction
Differentiation vsCommoditization
Qualification. New KPIs• Carbon, GHG• Embedded Water• Waste, Obsolescence• Recyclability• Transport – food km
Perception vs Scorecards
•Complexity reduction•Supply chain opt.•Cradle/Gate to Gate•Make/buy
Value per Shelf Space vsTotal Costof Ownership
Competitive Advantage• Closed Loop• Total Cost of Shelf Space• Cradle to Cradle• Business outsourcing
Legislate vs Innovate
Role of Packaging
•Product protection,•Decision to buy (FMT), •Promotions•Production efficiency
Perception of Packaging
Consumer perceptions: • Tied into Climate Change• Overpackaging, waste• Labelling confusion• Retail driven, CSR• Consumer vs Customer
Sustainable Packaging
Eco-design• New materials, pack. factors• Less is more• Localisation• Alignment to customer
Conflict AreasEvolution
Common ground
Conflict/R
esolution
Pack Design vs. Pack Procurement Objectives
design
procurement
purchasing leverage
product safety
supply chain optimization
brand consistency
manufacturingcost reduction
securityof supply
packaging competitiveadvantageTCO
brand revival (renovation,promotions)
brand differentiation
brand loyalty
consumer delight
productsafety
packaging competitiveadvantage
supply chain optimization
manufacturingcost reduction
brand protection
product & pack qualification
waste and obsolescence management
waste and obsolescence management brand
consistency
brand protection
product & pack qualification
Finding Common Ground
design
procurement
purchasing leverage
securityof supply
TCO
brand revival (renovation,promotions)
brand differentiation
brand loyalty
consumer delight
Conflict/R
esolution
Common ground
Search for the right balance and the new common ground
packaging competitiveadvantage
waste and obsolescence management
manufacturingcost reduction
supply chain optimization
Case Study: Innocent, UK
• Innocent (£76.6/USD150 Mn sales) procurement strategy is fully integrated into the sustainable pack design.
• Design. New sustainability initiative – packaging, brand
• Procurement role. The company abandoned PLA-based bottles because commercial PLA-based packaging composting was ‘not yet a mainstream option’ in the UK.
• In September 2007 Innocent became one of the first British company in the world to put its drinks into 100% recycled PET bottle.
• Planes are not used to transport its fruit and, whenever possible, alternatives to fossil fuels ar e employed. 10% of profits is given to charity.
Packaging competitive advantage: collaborative design and procurement
packaging competitiveadvantage
packaging competitiveadvantage
Case Study: Waste and ObsolescenceNew Focus, New (common) KPIs. Design and procurement get realigned
waste and obsolescence management
waste and obsolescence management
Raw MaterialProduction
Raw MaterialDistribution
Product Manufacture
Product Distribution
Retail and Consumption
Disposal/Recycling
Cradle to Cradle(Total Cost of Shelf Space)
Closed Loop(Packaging-in Packaging-out)
Gate to Gate
• Carbon Footprint…. carbon neutral, offsetting• Embedded Water• Recyclability, Reuseability… packaging• Transport… food and product miles (km)• More to come
‘ New’ KPIs
Case Study: Top Global Brand Owners Manufacturing cost reduction: Business process outsourcing offers flexibility to deal with complexity
manufacturingcost reduction
manufacturingcost reduction
BUNDLING
Print, Product and Brand managementPrinter consolidation, designPromotions, obsolescence managementBrand support – consistency
Supply Chain IntegrationMultiple category streamsSupply chain analytics, logistics, ITGrowth facilitation
Financial and Security ManagementWorking capital managementData and information managementPackaging, brand and identity securitySocial, environmental returnsQuality and assuranceEnvironment complianceChain of custody
ManufacturingPack/fill, FlexibilityProcurement, sourcing, demand planningMaterials performance, specification
Business Process Outsourcing
Drivers• Annual cost savings
create the momentum for outsourcing
• ‘Annual’ KPI reset. Outsourcing paid on achievement
12
Case Study: Closed Loop Supply Chain
• As nearly 70% of recovered post-consumer plastics waste is exported mainly to China, rHDPE availability in the UK is very limited.
• The manufacturing base for food-grade rPET and rHDPE has only started to develop in the UK, new supply chains are created to guarantee the quality and continuity of deliveries. As a result, companies are forming closed loops.
• Driven by Marks & Spencer (M&S, upmarket supermarket chain) commitment to require the food-grade of rHDPE for milk bottles, manufacturers such as Veolia (MRF), Closed Loop London (plastics recycler – a £30 m investment), Nampak Plastics (HDPE bottle blow moulder), Dairy Crest (milk producer) and have formed a closed-loop supply chain.
• Other Closed Loop examples – Direct, real time GHG offset purchase.
Supply chain optimization
supply chain optimization
supply chain optimization
Customer
packaging competitiveadvantage
waste and obsolescence management
Conclusions – Packaging Design vs Packaging Procurement
Conflict ? Resolution ?
Design and Procurement work together to achieve the customer need and competitive advantage from sustainable packaging
supply chain optimization
Closed loop systems provide the substrates for securing supply chains of environmentally preferred materials.
manufacturingcost reduction
Business process outsourcing provides the flexibility, access and cost to support design and procurement complexity
New KPIs direct the way in which design and procurement engage.
Pöyry Consulting LtdCentury HouseStation WayCheamSurrey SM3 8SWUnited Kingdom
tel: +44 20 8770 [email protected]
Robert WilsonAnia KrolakJohan Carlsson