The rapid growth of retail and manufacturing industries has led to a demand for easy-to-transport and environmentally friendly packaging. To meet such demands, the packaging industry must keep up by using new materials and innovative processes.
Moreover, packaging has gone from simple boxes and envelopes to complex systems that enable products to move across a global supply chain. Well-designed and cost-effective packaging is essential, as is finding methods to make packaging more efficient amidst an ever-evolving space.
Various external forces must be considered in packaging development because of the different needs in each market. Inflation, labor, and supply chain all play a significant role, and this article will discuss their effects on the packaging development process.
Packaging and Inflation
Inflation occurs when the price of goods and services rises or when purchasing power declines over time. The cause can be related to an increase in the money supply or a decrease in the demand for money, which causes people to spend more on goods and services.
Rising freight rates, material and transportation costs, and other price increases are some of the effects of inflation on the packaging industry. For instance, as prices of packaging materials increase, so do overall packaging costs.
Cost inflation continues to impact the packaging industry due to increased labor, energy, and transportation costs. In North America, petroleum-based energy accounted for 3% to 8% of total cash costs in Q4 2021. Thus, with a possible 45% increase in crude oil prices, energy costs for paper packaging were expected to increase by 3.4%.
In such cases, managing inflation-sensitive factors during your packaging development process is essential. Here are three strategies to consider.
Review your packaging operations
Reviewing your packaging operations helps you identify areas where you can trim costs, maximize profits, and ensure your customers get the best value for their money. You can review the basic unit price of your packing materials, see where your packaging costs may be hiding, and learn how to tackle them. Look at key areas such as your packaging’s suitability, design, efficiency, and availability.
Review packaging lines
Consider assessing isolated areas of your packing function. This includes the product you use the most volume of in your packaging or the production line for your most popular goods. For instance, you can analyze where you’re using materials such as stretch film and its quality. Reviewing your packaging lines is an effective way to start if you’re looking for ways to trim costs during inflation.
Invest in automation
Automation can help you deal with inflation by increasing your efficiency, allowing you to keep your costs low while still offering high-quality products and services. You can also use automation as an opportunity to develop new products or services that are unique and in demand since you won’t need as many employees to produce them.
Labor in Packaging Development
The cost of labor is always a consideration, and the availability of labor can be affected by the number of people looking for work and how much they are willing to work for. Labor also has to be compliant with safety regulations and other standards.
Apart from material shortages and production slowdowns, the problems hindering recovery from the COVID-19 pandemic are worker shortages, employee retention, and rising labor costs in the packaging supply chain. These labor conditions are challenges for producers, suppliers, and distributors, with transportation and logistics industries being especially affected.
Here are three strategies for managing labor in packaging development.
Consider collaborative robots
Collaborative robots or cobots can perform repetitive tasks with high precision while being safe and ergonomic enough to work alongside humans. This means they can do jobs requiring human input and interaction but not necessarily requiring human strength or dexterity.
Incorporate lean manufacturing
Incorporating lean manufacturing into your operations will increase system flexibility and efficiency, better conserve and manage resources, minimize waste (time, energy, and money), and improve production processes and balance. The goal is to keep operations simple yet effective.
Have technical support
Human intervention is still a necessary aspect in almost all industries. In this case, the more knowledgeable employees are, the better services they can provide. It equips them with the knowledge to work with artificial intelligence (AI), leading to efficient manufacturing and production.
Packaging and the Supply Chain
The supply chain is a process by which goods are manufactured, distributed, sold, and used. The two major functions of a supply chain are procurement and operations management.
The main challenge associated with managing supply chains comes from coordinating all production phases. This applies within each phase itself and across all stages as part of a whole integrated system that includes both internal and external components. Below are three strategies for managing supply chain issues in packaging development.
Localize the supply chain
Suppose your company uses a centralized offshore supply chain. If so, one of the biggest problems you may encounter is that your suppliers are located far away from where you manufacture your products.
However, if you have local suppliers near your production facility and can respond quickly to changes in demand or production, this problem won’t be as challenging. For this reason, packaging manufacturers like Meyers are strategically located in the Midwestern United States to efficiently serve brands across North America.
Look for an agile manufacturer
An agile manufacturer will be flexible, adaptable, and able to work with you every step of the way. They’ll help you identify potential problems before they start. When these problems arise, a reliable manufacturer can address them quickly and efficiently, keeping your product on track for its release date.
Standardize size and equipment
Standardized packaging sizes, materials, and equipment allow for uniformity in shipping practices and quality control. This process helps minimize waste throughout the production process and reduce labor costs by allowing fewer employees required for each task.
Building Towards Efficiency
Product packaging development involves multiple steps and several considerations. Various market forces can easily affect them and knowing how to handle these situations can help your business thrive in the long run. Furthermore, understanding how these affect your operations can help you prepare for future challenges.
Inflation, labor, and supply chains are constant factors that you need to address, but there are several packaging solutions that are available to assist you. Want to learn more about what your business needs? Talk to the experts from Meyers and bring your packaging solutions to life with professional packaging solutions.