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Supply Chain efficiency is the key

Increasingly, supply chain and packaging operations are becoming integrated services, boosting efficiency and reducing companies’ environmental footprints, says DHL’s Julian Kent. By reviewing the capability of storage facilities, opportunities can be identified to eliminate duplication, improve responsiveness and minimise management effort. The skills and competence of local management are essential to give customers confidence that needs will be met in a safe and cost effective environment.

Producers of consumer products need to standardise the format of packaged goods to ensure storage and distribution costs are minimised. For example, perfect pallets are required to allow automated warehouses to function, and pallet heights that have been maximised for transportation often require reworking on arrival, to suit local racking configurations. Likewise, a single pack format produced at a central location may not suit every market where the item is sold. This drives the need for localised co-packing capability and the supply of associated secondary packaging materials.

Using this insight, early identification of requirements can reduce any potential financial impact. Customers are increasingly asking supply chain providers to deliver a complete service which integrates the downstream packaging operation, including the design and supply of specific secondary packaging materials. Where the supply chain company links these associated elements, a true end to end service can be achieved, delivering significant cost reductions and operational benefits.

The early involvement of an end service provider will also help to identify potential issues at a stage where solutions can be found to prevent any unwelcome surprises later in the process. In fact, the involvement of the co-packing operator in the design process to manipulate the product, identify assembly issues and ensure the item meets retail standards, has increasingly become part of customers’ briefs.

As customers look to develop efficient processes, a key objective is to reduce transport movements. When co-packing is undertaken within the central distribution warehouse, a number of product movements can be eliminated from the overall process. The goods no longer need to be picked, loaded and transported to a dedicated location, instead they can simply be moved within the site to the co-packing area, and packed using materials that have also come from within the warehouse.

In addition to improving transport efficiency, an integrated warehouse and co-packing centre reduces project timescales. This often provides an advantage when reacting to short notice retail opportunities.

Efficient transportation will also have a positive impact on the environment, another key objective for logistics providers, retailers and manufacturers. By minimising a given pack size, the quantity of goods moved in a single journey will be maximised. This reduces the number of journeys needed for a given overall volume, with cost and carbon emission benefits.

Putting theory into practice is Chainalytics who cut the size of the packaging for a prepared food product by one-eighth of an inch. In doing so, it eliminated 100 tonnes of carbon dioxide emissions and 146 tonnes of paper and cartonboard annually, a significant result.

Being aware of our customers’ environmental agendas has increased the use of environmentally friendly and sustainable packaging materials. This has included void fill and cartons from accredited vendors where pick and pack is part of the solution. DHL’s Envirosolutions waste, recycling, and environmental compliance product suite guides customers, through innovative, waste management and recycling practices integrated into the supply chain. Recycle and re-use programmes and the latest technology contribute to support customers in achieving environmental targets.

Working closely with customers’ manufacturing operations allows supply chain providers, such as DHL, to provide more tailored, specialist services to suit their needs. Ultimately, this increases the efficiency of the supply chain, getting packaged products to customers’ faster, with increased efficiency and lower environmental impact.