Logistical packaging is a crucial element in the physical distribution system, which helps in enhancing the system’s efficiency and effectiveness of the supply chain of the company. Proper packaging for logistics application takes care of the cost, which otherwise would have been incurred in the form of product damages during transit, ultimately resulting in loss of opportunity and customer dis-satisfaction. Hence, logistics packaging is designed keeping in view the following objectives.
1. Material Handling
Packaging is the means of providing safe delivery of the product in usable form to the ultimate customer. The physical distribution includes number of activities such as storage, transportation and handling. Most of the damages to the product take place during the handling operation at the time of loading and unloading at the starting, trans-shipment or destination points. The types of the equipment, which are used for handling of packages, and their capability and conditions, play a vital role in controlling the product damages. The handling systems vary considerably at different points in the distribution channel. Hence, these factors should be taken into consideration along with the sensitivity of product and the cargo while designing the packaging. In fact, many points are uncontrollable, but remedial measures have to be taken, based on the historical statistical data to pinpoint the areas, operations, skills and facilities to avoid future damages.
In majority of places, the loading and unloading operations are done manually. The reasons for product damages during loading and unloading operations are:
- Height of loading platform
- Method of handling
- Vehicle condition
The extent of package damages may be less if proper loading height is provided. This will reduce the height of fall while dropping packages, resulting into reduced impact and minimum damages. The method of handling can be improved through proper training and education to the loaders. Physical condition of the loading area of the vehicle, where cargo is held during the vehicle movement, contributes a lot in minimizing the damage to the cargo. Normally, the damages take place due to:
- I rregular truck bed affecting the stability of packages on the uneven contours.
- The gaps between the truck bed planks causing obstacle to the movement of package during unloading and causing damage to it.
- The protruding bolts and angles behind the drivers’ cabin damaging the packages.
- The partially loaded truck may not allow the consignment to be secured to the place during transit, and may hit at the sides or rear-end of the truck body causing serious damages to the packages.
- Ropes used for tying the consignment on the fully loaded truck damaging the packages.
Even a well-designed package with all safety factors (which will increase packaging cost) incorporated in it will not solve the problem of product damages, if precautions are not taken during loading and unloading operation. The remedial measures are:
- Usage of additional levelling and packing material at the critical places on the truck bed
- Packages to be designed on modular concept to avoid dimensional mismatching
- Special provisions for rope tying
- Avoid rolling of packages on floor.
Similarly, to reduce damages during unloading operation, the provision of proper unloading platforms to reduce the drop height or usage of proper material handling equipment is recommended. In the warehouse, proper packaging will enhance material handling efficiency and improve warehouse productivity resulting into reduction in the operating costs.
The major cost element in logistics operation is transportation. For the low unit value product, the transportation cost varies from 10 to 50 per cent of the product cost. The transportation cost for the consignment depends on the following factors:
- Gross weight
- Gross volume
- Stowability—size and shape
The gross weight carrying capacity of the carrier and the storage space of the carrier is fixed. However, with proper package design using lightweight packaging material, more tonnage per unit volume can be accommodated. Hence, the incidence of transportation cost per unit weight of the goods carried can be reduced considerably. Similarly, for utilizing full space of the carrier, the size and shape of the consignment package plays a major role. By using the concept of modular packaging, this problem can be solved to a great extent.
The odd sized and shaped consignment attracts higher freight charges per unit weight or volume of the given consignment, as the carrier’s space and weight carrying capability is underutilized, while the cost of freight for a given carrier between two locations is fixed. The extra-heavy consignment with odd shapes requires special care and efforts for packaging, which is a non-standard design. In some cases, the odd-shaped items can be overcome through proper design of packaging to avoid special freight charges that it would have otherwise attracted.
The other unanticipated element, which many times adds to the logistical costs, is transit damage claims. This happens due to poor consignment packaging, which rips open or gets damaged during transportation. The package may not withstand the varying carrier conditions and the environment in which it travels. That is why for sea cargo, the sea-worthy packaging (special design using teak wood) is specified to protect the consignment and withstand hostile sea environment. The cost of sea-worthy packing is 30-40 per cent more than the normal packing for inland transport. For shipments by air, the use of lightweight material is recommended, as air shipment attracts highest freight tariff amongst all the available travel modes. Hence, depending on mode of transportation, the consignment packages are designed to take care of the environment and multimodality of travel.
In the case of container transportation, as all precautions are taken care of, the primary packaging need not be so elaborate. One of the greatest advantages of container packing is considerable reduction in cost of primary packaging. For example, for transportation of high-value fashion garments through box containers, an innovative way of logistical packaging is being used. They have developed special hanger fixtures to keep the garment in hung position during the journey. This saves a lot on primary packaging of the product (Figures 9.7 and 9.8).
Storage is a critical element in the logistics operation. It plays a vital role in ‘make and sale equation’ of the manufacturing organization. The finished products are stored in the captive warehouse till they are dispatched to the distribution warehouses in the field or directly to the customer. The period of stay in the warehouse is not fixed and depends on the nature of demand. The finished products occupy the floor and cubical storage space in the warehouse. Because of limitation of the available space, there is a need to have maximum storage density. Hence the finished products should be packed in a manner to ensure maximum space economy. The odd shapes of the products can be overcome through proper packaging; permitting rational storage, which is not otherwise possible.
The warehousing capacity utilization depends on the material storage system. However, packaging plays an important role for cubic space utilization of floor space. Well-designed packaging will ensure maximum storage density for the given shape and size of the product. However, the vertical space up to ceiling of the warehouse can also be utilized, provided the packaging can sustain the stacking load. In single-story warehouses, the ceiling height may go up to 30-40 feet. In case of consumer goods like TV, vertical stacking is allowed maximum up to five cartons. This is because the weight of the stack is directly coming on the product itself rather than the package. If the box is made little stronger (provided cost add-ons are not disturbing the pricing structure of the product), the stacking height can be increased, adding to the space utility of the warehouse. The increased stack height may call for investment in material handling equipment. Hence, the storage, material handling and packaging are three sides of the triangle, which should be balanced so as to have maximum productivity from the system.
The logistical packaging has to play an important role of communication during its journey from place of shipping to the place of delivery. Following information is of vital importance for consignment to reach at the right place in good condition:
- Contents of the package (product, weight, quantity, size)
- Type of goods (hazardous, explosive, perishable, radio active etc.)
- Name of the manufacturer
- Name of consigner (place of origin)
- Name of the consignee
- Country of origin
This information is required to be put on the label on the package, which can be read from a reasonable distance. As per the regulations, the carriers will not accept the consignment or inspection agencies involved in export/import cargo will not accept or allow it for shipping.
Information regarding the handling of the package is required to be put on the logistical packaging. The handling instruction includes the position and damage precaution for the chemical container, temperature to be maintained for temperature-controlled processed food, pharmaceutical and agro products, and stacking consideration for fragile products such as glass etc.
Tracking of the consignment is an important function of packaging. The consignment is moving through multiple storage, material handling and transportation systems at various terminals along with other consignments. For keeping track of the movement of the package, it should be identifiable using some bar coding system. This will minimize the loss of package due to misplacement, pilferage or theft (Figure 9.9).
Source: Sople V.V (2013), Logistics Management, Pearson Education India; Third edition.