25 FAQs About Packaging Supply Chain Optimization
We recently conducted a webinar on Packaging Supply Chain Automation which saw professionals from diverse industries and profiles participate. Through the 45 minute duration of the webinar, we saw active participation from the audience and some very interesting questions on packaging supply chain optimization as a broader topic.
Alas, time was a constrain and there were only how many questions we could’ve answered during the 15 minutes Q&A. However, we wanted to ensure that all questions were answered and this blog post is an answer to all those questions.
We’ve covered most questions that were asked (except for those that were too specific and dependent on more information).
Take a read and let us know in the comment section if you’d like us to add to this list of questions on packaging supply chain optimization.
If you'd rather save a PDF, find it here --> FAQs by 400+ Brands on Automated Packaging Procurement Answered
Automated Packaging Procurement
Q1. How to manage inventory space for a large number of SKUs?
Other versions of this question were
- How to manage inventory of more than 150 SKU in small space?
- How to maintain the inventory for 150+ SKUs based on customer pull?
- What are the methods to track packaging inventory in the plant?
- What is the best option to manage inventory in the FMCG industry?
- Is there any method to reduce our carton’s inventory or inventory carrying cost?
- How to avoid space shortage in the storage of packaging materials?
A. Inventory space can be utilized better if it stores more of your product and less of your packaging. This means you need to keep the ‘minimum’ amount of packaging inventory at your warehouse.
So, irrespective of the number of SKUs you deal with, this can be easily executed by doing three things-
- Precisely defining inventory levels
- Keep a constant check on inventory consumption
- Setting up an auto-replenishment system
Bizongo’s Procure Live has all these three functions. Procure Live, along with Bizongo’s vast operational network can help you store less & yet deliver more.
Q2. How has Bizongo automated its warehouses?
A. We identified that there are majorly two areas where automation is extremely necessary:
Purchase Orders: While working with multiple brands, we noticed how raising a purchase order is time-consuming. For instance, you’ll need to determine the requirements based on demand and create a purchase order. Then get it approved from concerned stakeholders. When the seller receives the purchase order, the production will begin right from sourcing raw materials. Finally, it is delivered to your warehouse. All of this takes anywhere between 25-30 days.
Open POs can drastically reduce the hassle from this lengthy process. Here, you give the vendor a PO with no upper cap on the value for a particular duration, say a month. During that duration, required packaging will be manufactured and supplied as per consumption. You will now be addressing one consolidated invoice at the end of the month instead of multiple POs
Inventory Replenishment: The fear of losing sales or revenue makes companies over-stock packaging inventory resulting in needless consumption of working capital and warehouse space.
That’s why consumption is a better metric to track. Packaging stock will be replenished based on its consumption, saving cost and eliminating the possibility of obsolete inventory.
This consumption tracking will be done in real-time through the buffer inventories at clients & Bizongo’s warehouses. These buffer inventories will be divided into green (safe stock level), yellow (medium-priority stock level) and red (emergency level). If this buffer inventory at the client’s end falls below the green mark, an automatic order will be generated & sent to Bizongo, who will then send out the shipment at the earliest. If the stock level dips to red, Bizongo will expedite shipment the very same day.
All of this is being managed through a digitalized platform enabling Bizongo to offer 100% availability of packaging at lower inventory.
READ: Packaging Challenges at the Warehouse and How to Solve Them
Q3. How do you increase OTIF by optimizing distribution?
A. On-time In-full (OTIF) has been an age-old metric to track the supply chain health. These are the 3 steps that can help you improve your OTIF:
- Localize procurement of packaging material within a 400-500 km radius.
- Maintain the right stock levels: Avoid out-of-stock situations. Build a system efficient enough to adhere to your demand-supply cycle even when there are fluctuations. Best way to do this is to automate your ordering & replenishment process.
- Regularly monitor performance: Analyze regularly to check your OTIF health. Real-time monitoring will help you act faster in any case of disruption.
Q4. How to improve sales impact via inventory management?
Other versions of this question were
- What is the cost impact of packaging on the supply chain?
- How to manage a lower inventory of packaging materials without affecting sales?
- Is the packaging saving on the process and inventories or majorly on aggregating the quantity (bulk buying)?
A. Improving sales essentially means improving revenue.
When it comes to packaging inventory management, the biggest mistake that we have seen across organizations is holding on to inventory for long durations ranging from a week to a month. This basically blocks your working capital which then negatively affects your revenue.
The easiest method to eliminate this issue is to implement a system that helps you prevent both overstocking as well as understocking. Our tech-enabled system seamlessly introduces automation in the process which results in optimum inventory management. This system needs you to keep minimum packaging inventory.
Q5. How to provide min-max inventory value to vendors for regular item movements? Explain the safety stock concept.
A. Min-max inventory value depends on various factors such as perishability of goods, available warehouse space, consumer behaviour, lead time etc.
However, there are formulas to calculate these numbers for yourself.
Maximum sock level is the number beyond which you should never stock your inventory.
Maximum Stock Level = Reorder Level + Reorder Quantity – (Minimum Consumption x Minimum Reordering Period) [prima seller]
where,
Reorder level= Quantity at which you need to place the next order
Reorder Quantity= Quantity to be ordered when your inventory is at reorder level
Minimum Consumption= Daily minimum consumption
Minimum Reordering Period= Minimum time taken by the vendor to send you your packaging
Minimum stock level/Safety Stock Level is the absolute minimum number of products you need to have in order to fulfil market demand.
Safety stock cushions companies against seasonal fluctuations and poor visibility on supply schedule. Additionally, it provides a buffer time to replenish packaging material stock, meet unpredictable consumption and eliminate stock-out cost.
Based on consumption, here's how you can calculate safety stock?
Safety Stock = Daily Consumption x Lead Time x Safety Factor (for demand fluctuation)
Q6. How much time does it take for Bizongo to optimize inventory management for a new company through supply chain automation?
A. Time is a very subjective element. However, we can assure that once the first-time engagement between the client & Bizongo is complete, auto-replenishment gets quicker with every passing order.
This first-time engagement will involve everything from understanding the clients packaging demand, their working ecosystem and client expectations. With that clarified, the flow of data in real-time becomes seamless so as to ensure optimum inventory at all times.
Q7. Can Bizongo integrate with systems like Microsoft ERP & SAP
A. Yes. We believe the blending of systems is critical for optimum functioning of any organization. Nonetheless, software integrations need some study in terms of how two software can be merged together yet maintaining their separate features.
We currently do have a set of clients whose software is successfully integrated with our tech-based packaging platform, Procure Live. If you have a similar requirement, please write to us at marketing@bizongo.com
Q8. What is the maximum number of SKUs that can be accommodated by the Bizongo inventory system?
A. There is no limit to the number of SKUs that can be accommodated by Bizongo’s inventory system. Our capabilities of building catalogues & our in-house industry-wise product categorization have helped us to easily manage more than 1 lakh SKUs as yet.
Q9. How can we confirm the requirement/material delivery details at the station level?
A. Receiving granular information across your packaging supply chain is not possible manually. Incorporating technology into your procurement process can address this question for you. For example, at Bizongo’s we use Procure Live, our tech-platform for packaging procurement. This offers 100% visibility right from order placement to distribution. All information, be it order status or inventory status, can be tracked through the digitalized system
Q10. How to ensure 0 packaging stock-outs?
A. Here are 4 steps that can ensure that you never go out of stock-
- Audit your inventory
- Calculate safety stock
- Determine your warehouse logistics requirements
- Automate your reordering system
Read in-depth about these 4 steps in our guide to preventing packaging stockouts.
When you automate your packaging material supply, you can deliver products in a timely manner. You’ll be able to offer better customer service and win some loyalty. Plus, you’ll save cost.
Q11. What is the best software available to support your packaging SCM?
Currently, Bizongo’s Procure Live is the only software platform in the market that has been developed to manage the packaging supply chain seamlessly.
Most other software available is meant for the overall supply chain and can be used for packaging as well. The implementation of these software packages is intensive both in terms of cost & resources and may not be beneficial if you are looking to automate only your packaging supply chain.
Packaging Design, Development, & Quality
Q12. Is there a way to choose packaging colours that will make the product stand out?
A. Colour is a very subjective aspect of packaging. The colour you choose can be an outcome of factors such as your target audience, your product, your country or your brand values.
In such a scenario, there can never be any right or wrong. However, what can be, is a systematic method or reasoning while choosing these colours. This systematic method is called colour psychology and brands across the world have been using this while decision making for a brand or packaging colour.
In this Color Psychology guide, you will get to know the science behind 10 different colours and why 20 different brands are using them.
Q13. How to ensure consistent packaging quality with vendors?
Other versions of this question were
- How to maintain packaging quality standards?
A. Ensuring consistent packaging quality across vendors is a combination of 3 things
Awareness of Requirements
We’ve observed that there is often confusion within the team handling the procurement process over the exact requirement. This leads to misinformation, loss of information and eventually the wrong product being manufactured and dispatched. This can typically be categorised as a process problem and can be addressed by publishing the required product specification digitally for everyone to access (even if that means sending an email to the entire team). At Bizongo, we manage this through our digital platform Procure Live where we have created a customized catalogue of products with their specifications for individual businesses.
Predefined Testing Measures & Quality Standards
Every packaging product has a set of testing procedures to ensure that the required quality is met. For example here are 9 corrugated box testing methods to ensure consistent quality of corrugated packaging material. Find out these testing methods for every packaging category you procure, identify the ones important for you and ensure these tests are done on a sample set of every dispatched order. You can ensure these tests are done regularly asking for a quality certificate to be generated at the time of an order dispatch which can be sent along with your order.
Adoption of Technology
Lastly, adopt technology. Digitalization usually makes processes watertight and can help you ensure quality without the constant need for human intervention. For example, Artwork Flow - our artwork management system enables its users to proof the packaging colour on their artwork for FREE. This ensures consistency in colour irrespective of where you get it manufactured from.
Q14. How can we develop packaging for spare parts in consumer durable industry?
A. Well, there isn’t really ay one right way of developing spare parts packaging for the consumer durable industry. It would involve knowing more details like which product will be going inside the packaging, it’s size, fragility, how it will be transported, where will it be stored etc.
If you like to know further drop us an email on marketing@bizongo.com with more details of your requirement.
Q15. How to deal with liquid product packaging form a logistics point of view?
A. The way liquid packaging is dealt with during logistics would really depend on the primary packaging of the product and the type of product that goes in the packaging.
Glass bottles, plastic bottles, plastic cans, tin cans, tin containers, tetra packs, and laminate pouches are some commonly used packaging material for liquids. Now, how you deal with this during logistics would depend on what your product is what you have chosen as primary packaging for it. Tests would have to be run on it to check for load-bearing capacity and crack resistance due to environment. In the case of bottle tests like cap fitment would be needed. There are testing procedures available for the transit as well.
Here’s a detailed article on standard methods of testing rigid packaging. Similar testing procedures are available for other types of packaging as well.
Q16. How can we optimize secondary and tertiary packaging?
A. Well, there are many ways of optimizing secondary and tertiary packaging and the technique adopted would depend on the requirement. One common way of optimizing packaging is standardization, wherein packaging for multiple product SKUs is engineered in such a way that these products would require only one packaging SKUs.
However, as I said, the technique would purely depend on the requirement. Send us your requirements on marketing@bizongo.com and we shall be able to help you better.
Packaging Technology & Innovation
Q17. How to tackle frequent changes in artwork due to regulatory changes?
A. The secret to handling frequent artwork changes whether it is due to regulatory changes or any other reason is using a robust artwork management system. While the work is always going to be there, the effort can surely be reduced.
Here’s a handy guide to managing artwork changes easily and for FREE
Q18. How to avoid mixing problems when you're managing the inventory of similar looking products(design/colour little different)? A bar code system would work?
A. Product identification in warehouses can be a hassle, and we feel your pain. As you rightly mentioned, one available solution for this is barcode labels. Another solution is RFID tags (see video below). Which of the two you choose would depend on the scale of your operation and allotted budget for this requirement?
Q19. How important is tamper-evident packaging in the supply chain?
A. The importance of tamper-evident packaging in your packaging supply chain is directly correlated to either the value of the product or your brand reputation or both.
How you safeguard this value with packaging is what would be important. Currently, there are many tamper-proofing solutions we provide to clients depending on their requirement.
- There are different grades of tamper-proof courier bags popular with the eCommerce industry
- Various levels of tamper-evident tapes popular across various industries like food services, eCommerce, consumer durables etc.
- And lastly, there is security technology like RFID which is usually used by businesses to keep track of and safeguard their material handling solutions.
Q20. Is Bizongo doing anything in the field of Green Packaging?
Other versions of this question were,
- What is the future for sustainable packaging and what products can safely be categorised as sustainable?
- We are going plastic-free in packaging. Is it sustainable? What are the cost-effective alternatives?
A. With environmental awareness rising globally, there has been a strong momentum towards sustainable packaging solutions.
However, there are teething challenges the market is facing in providing these sustainable solutions. The first is the investment required for the research of these solutions is high. This has limited the number of eco-friendly options available in the market. Also, these solutions come at an added cost which neither the industry nor the consumer is prepared to absorb. This has made manufacturers wary of investing in the production of packaging that might not fetch the markup price. Importing again is cost-intensive.
In this direction, we are collaborating with manufacturing partners to make eco-friendly packaging available to our customers. There has been significant headway in this direction for the food services industry with paper, bagasse, and wood-based packaging championing the cause of the environment. Similarly, we’re also working with partners towards providing green solutions to other industries.
We’d love to hear from you if you’re looking for something specific.
Q21. What are some futuristic packaging innovations?
A. Well, it’s hard to make a list of these innovations. Across the globe, there are diverse innovations in terms of aspects like packaging design, packaging technology, and material used. The relevance of these innovations to you will also vary depending on the fact if it is industry-specific or industry agnostic. Keeping all these factors in mind here’s are some packaging innovations across product categories and industries. Lap it all up, take your pick, and let us know your personal favourite in the comments section.
Q22. Can we make a system in which, the packaging can be returned for reuse?
Other versions of this question were,
- What is a returnable packaging system?
A. Yes, there are different ways in which packaging products can be reused.
For example, Loop - a company in the United States has partnered with many leading brands like Pantene, The Body Shop, and Häagen-Dazs and is piloting the ‘milkman model’ of delivering products at the consumer’s doorstep and then later collecting the empty package for reuse.
Another example of reusable packaging is what is generally referred to as returnable packaging. This type of packaging mostly refers to material handling products like crates which can be returned after use. In the B2B scope, it is used in transporting intermediary products back and forth between warehouses and fulfilment centres. In the B2C scope, leading eCommerce brands like BigBasket are using it to deliver customer orders after which the crate in which the product came is returned.
Bizongo's Business Model
Q23. What are the other packaging solutions Bizongo provides other than corrugated boxes?
A. Our packaging solutions are spread across the spectrum and not restricted to corrugated boxes. In terms of packaging material, we have partnerships with manufacturers across India for primary packaging, secondary packaging, tertiary packaging, and material handling products. The procurement of these products is supported by our automated supply chain platform. Apart from that we also provide packaging design & development solutions and an artwork management solution. You can visit our website bizongo.com to get a full view of the scope of our services.
Q24. Do you have packaging solutions for FMCG (Food) products?
A. Yes, we do have packaging solutions for FMCG (Food) products. Would you like to discuss this further? If yes, drop us an email on marketing@bizongo.com with more details of your requirement and we can take the conversation forward from there.
Q25. Does Bizongo provide packaging vendor databases?
A. No, we do not provide packaging vendor databases. However, what we do provide is a structured system to procure packaging materials for your business from anywhere in the country, while ensuring that you have access to the best in class materials, price, quality and practices across our manufacturing partners. We make packaging sourcing, distribution, inventory management, artwork management and design hassle-free for enterprises, all at one place.
