Visualizing packaging flows leads to savings
“Many companies are not aware that the value of their reusable packaging is so high,” says Kristen Thomas from Tconsult, who focuses on the efficiency of packaging processes. “Companies often miss the overview and control of their packaging flows.” And that is a shame, she says, because packaging, pallets or trolleys represent a considerable value, which creates a cost item if, for example, folding crates are stolen or pallets are stolen, which happens regularly.
Kristen sees that little attention is paid to packaging within companies. For example, there is often no possibility for employees to integrate the registration process into the work and there is no training course. Tconsult maps out the packaging flows and sees that the companies it analyzes can easily save 200,000 euros on an annual basis. “Depending on the industry and the complexity of the supply chain, the financial risk of packaging loss, damage and theft is between 10 and 30 percent of the pool of registered items. We don’t want to talk anyone into a problem, but rather create awareness.”
As an example, Kristen mentions a large FMCG company that supplies fresh produce to retail and producers of fresh products. When Tconsult visualized the packaging flows, it turned out that 30 different types are in use, of which folding crates are the largest part. The total value of the package is 23-30 million euros. This leads to a financial risk of 0.8 to 1.4 million euros for the packaging that is in use. This high number of different types of reusable packaging is caused by working with seasonal products and many different suppliers.
Due to the many different types of packaging, there was little insight into the outgoing flows, resulting in a lot of loss. So much loss that the company had 2.5 times the required packaging in stock rather than attempting to get back what had been spent. There is now a good overview of the packaging materials and outgoing flows are registered, which means that the stock has been reduced to 1.25 times the requirement, which results in considerable savings.
Loss and Damage
The greatest risks with outgoing packaging are loss and damage. “A risk is that packaging is lost because it is not visible. Sometimes packaging is not returned or is returned to the wrong supplier. Another risk is that the materials, which are often rented, are damaged. If there is no clear record, damage often leads to discussion about who is responsible. If there is evidence that the item was not in possession at the time of damage, it is easier to disclaim financial responsibility.”
In order to prevent problems and costs with packaging, it is important to map out the packaging flows and to record agreements with suppliers, Kristen says. “When companies look at the financial aspect, it quickly becomes clearer. Counting and recording in the financial administration is very helpful.” Based on its own and other research, Tconsult has established that in about 43 percent of the companies that work with packaging, pallets or trolleys for multiple use, there is no or only manual registration of the packaging flows.
Still, registering, preferably digitally, because physical documents are more error-prone and can easily be broken or lost, is the solution for managing packaging for multiple use, says Kristen. For example, Tconsult has developed the TellApe app with which packaging stocks can be tracked and documents can be digitized. Another advice Kristen gives is to transfer the responsibility for the packaging to the supply chain manager or to appoint an external manager for this.
An additional advantage of digitally registering packaging is that a lot of data becomes available, which makes it possible to make predictions in the field of packaging, but also for other business aspects. In addition, it ensures that the sustainable aspect of packaging for multiple use comes into its own. Proper registration ensures that packaging is returned to the supplier and does not disappear, intentionally or unintentionally, from the regular flow after one-time use. An important aspect because companies are increasingly concerned with sustainability. “The use of reusable packaging has exploded in recent years. Companies take into account the sustainability factor by using reusable packaging, but do not retrieve them so that they are non-reusable,” concludes Kristen.