How do You Pack That?
Einstein had it easy. To devise his theory of relativity, he just had to ponder things like mass, energy and speed of light. He never had to worry about the varieties of packing material experience. He certainly never had to mess with shipping rates or mounting environmental concerns or products that could go bad somewhere between the warehouse and the customer's front door.
Fortunately, you don't have to be a genius to know that your decisions about packing material can make or break your company. You just have to be alert.
If there were a unified theory of packing materials, it would be as follows: The marketer must use appropriate materials so that the items travel to the customers in a timely, safe, cost-effective manner and so that the customer's expectations are met or exceeded. This statement rests on two equally powerful, interlinked principles: No aspect of the packing and shipping should compromise the quality and integrity of the item. Nothing should threaten customer satisfaction. We can add an amendment to the theory. The packing materials, method of shipping and warehouse operation must be in harmony.
One thing is certain about packing material. Choices abound. Cartons, envelopes, bags, mailers, newsprint, peanuts, straw, bubble cushioning and more. Sealed Air Corporation, alone holds trademarks for dozens of different packaging materials. Probably the best known is Bubble Wrap®. A few others include Air Cap®, Corro-Foam®, Instrafill® and Jiffy Mailer®. Raymond A. Hajek, Executive Vice-President of Teneco Packaging-AVI, noted in a talk at NCOF that "when you're purchasing packaging material, you're purchasing a function."
These functions range from protection against rude shocks and hostile
temperatures to conveying a sense of luxury to protecting the
environment to all of the above.
"We use a variety of packing material for protection," said Brian
Bishop, Director of Operations for the Boston Museum of Fine Arts
Catalog. "At one time we exclusively used popcorn Styrofoam loose fill.
We abandoned that program as we received significant complaints from
customers about the [environmental impact]. Now we use recycled
newsprint. It comes in rolls and we wad it up. We will use peanuts if
it's absolutely the only way to ship an item."
"We use corrugated boxes and poly bags," said Leah Osborne, Assistant Distribution Manager for Lexington (Ky.)-based J. Peterman. "We use Ranpak's PadPak for breakable items such as plates. Such objects as a large compass or telescope we float in biodegradable, cornstarch peanuts." When a Peterman customer orders soft goods that exceed a certain dollar amount, a packer puts the item in a box and uses tissue. Less expensive items of the same weight and durability might go into a poly bag with newsprint stuffer.
Everything starts with the item's essential nature and its special needs. Yes, even merchandise has needs. For example, no purveyor of perishable foods would have as its motto, "Well, it was fresh when we shipped it out."
The 13-year-old Honey Baked Foods in Holland (Ohio) has developed a precise packaging scheme for its products, of which approximately 80% are perishable. Its best known product is spirally sliced bone end ham. It also offers other meats, seafoods, desserts and complementary packaged goods.
Scott Saverstrom, the company's Warehouse Operations Manager, says, "Our perishable products are wrapped in foil and placed in a poly bag that goes into a metalized mylar bubble bag with some reflectant qualities to keep the cold in. It contains a reusable gel (ice ) pack. The bag is physically sealed across the top and put in a customized Styrofoam container. Polyethylene film is placed around that to keep the lid on and protect it during transit. The film also serves as a tamper proof barrier."
Honey Baked Foods distinguishes between perishables such as spirally cut ham and highly perishables such as angus beef. For the latter, the steak selection goes into a corrugated gift box. The steaks are swathed in a "diaper" to absorb any condensation or drippage. The gift box nestles in a Styrofoam box packed with dry ice. No insulating bag is used because the dry ice "produces vapors" that would cause the bag to bulge and, under pressure, possibly explode. This makes it a really bad candidate for air cargo. The Styrofoam box is wrapped with the polyethylene film which happens to be permeable so that the dry ice-produced gasses seep out harmlessly.
Neither jewelry nor glassware face spoilage but they are vulnerable to breakage. That's why the Boston Museum of Fine Arts catalog switched from mailer to envelope for its costume jewelry which the museum ships in gift boxes.
"We found that by shipping the piece in a mailer," said Brian Bishop, the catalog's Director of Operations, "we could get lower costs but unfortunately the gift box would be crushed. So we began cutting out cardboard poster tubes into a depth that covered the depth of jewelry boxes; then we slip [the tube] inside the envelope."
The tube, a corrugated ring, is so tough that , according to Bishop, "you can stand on it."
Conversely, some items do quite well without cumbersome or complicated packaging. L. L. Bean uses bags for soft goods that weigh less than five pounds and, according to L. L. Bean's Sandra Norman, "wouldn't be exposed or damaged in shipping system." The company packs the majority of hard goods in corrugated boxes. ("I'm a strong advocate of corrugated boxes," says Norman. "It's a renewable resource with a lot of characteristics as far as cutting designing are concerned. For example, you can do angle pads and corner pads.")
Perishability and durability are but two characteristics. Shippers also
must add size and shape to the formula.
DM Management offers two catalogs -- Nicole Summers and Jay Jill. They
mostly feature women's apparel and accessories. When a 36-inch-long
umbrella made its appearance in one of the company's spring catalogs for
the first time, Gayle Beamis, DM Management's packing and shipping dept.
supervisor, sought a suitable package for the brolly. There were 200
pieces in stock. She took measurements, noted some ideas about how the
package would look and consulted with her vendor. A little more than two
weeks later, the vendor delivered 500 pieces (its minimum quantity). "I
think they took a stock sheet of corrugated and probably made a die."
Beamis attributes the speed and service to a good relationship with the
vendor.
L. L. Bean discovered that when it comes to futons, it has to look at the sum of the parts; i.e. some of the parts have to be packed separately. The arms and base had to ship in separate DM Marketing
Seasonality also can inspire separate pieces. Honey Baked Foods has created packaging schemes for its most popular groupings of product. At the holiday season's peak, picking and packing lines are geared for putting groups together. Additional lines can not be added to accommodate customers who want additional items in the same package. Those items are packed separately and sent out at the same time.
Cost follows function as a factor that affects packaging. Hajek of Teneco Packaging-AVI says that in addition to the obvious materials cost and shipping costs, the hidden costs of labor and warehousing/inventory also lurk. He cited an item that could be packaged by a material that costs three cents a square foot or by a material that costs five cents a square foot. Using the cheaper material requires five square feet. Packaging the item in the more expensive material uses 4.5 square feet. Voila! Using cheaper material for the package actually invites a higher shipping cost.
Employee training influences packaging material costs. DM Management
trains packers to use coded labels that help the selection of
efficiently choose appropriate size package, line it with tissue paper,
place catalog and inserts at bottom, insert the merchandise, seal the
package with white tape, select the appropriate shipper and method.
Coded labels help.
Hajek recommends deciding "up front" the quantity of packing material
needed per item and to ensure that the correct amount is used
consistently. He also advises the posting of "guidelines at your
packaging stations."
Another way to control costs is to get free packaging. The arrangement
between Overtons (a marketer of water-based sporting goods) and UPS call
for the courier service to provide boxes and envelopes. Mark Coffin,
Vice-President of Operations for Overtons, says the freebies are not
appropriate for everything the company ships but they are "an enticement
to the contract."
When DM Management negotiated postage prices with the United States
Postal Service, a delightful goody in the form of free mailing
containers also entered the picture. Reported DM's Beamis, "10 pallets
of mail bags just came in the back door. This will have a tremendous
impact."
Marketers also ship by affixing labels and paperwork to the product supplier's original packaging. Although this may pare some of the packaging cost, the real saving comes in the reduced cost of operations. It helps to eliminate the steps of unpacking and repacking. However, you must avoid the undesirable burdens of breakage and customer dissatisfaction. You can ward off these costs with magic spells. L. L. Bean prefers to subject vendor packaging to strict tests.
L. L. Bean's Sandra Norman says, "when we classify merchandise as a prepack, we test the package to see if it holds up in our warehouse system and also the shipping process -- inbound or outbound. We have a vendor manual with specific rules and guidelines for a supplier to provide packages." One example of a change came when testing revealed scratches on a table top. "The vendor was using staples," said Norman. "We had them go to a different sealing method."
A marketer can save money on storage space when vendors store the packing material in their own warehouses. That's one way that the Boston Museum of Fine Arts paints its masterpiece.
"We work with vendors who will warehouse our corrugated supplies and envelopes in their facilities," said the Museum's Brian Bishop. "With 24-hour notification, they deliver what we need. We don't want to tie up our storage space. We'll place an order for the season -- sometimes for the year if we can project accurately. . . . If, at the end of the year, we see we've had good pricing we'll take the remaining quantity and warehouse it here."
Inventory control is both an excruciating science and an exacting art. An insufficient supply of packing materials prevents you from serving your customers on a timely basis. A surfeit is nothing less than your company's money lolling in storage. Many marketers have turned to the just in time (JIT) approach. Crucial to JIT is the forecast which, like voting, should be done early and often. DM Marketing does monthly forecasts which it double-checks weekly. It particularly looks at supplies, staffing and demand. Once in a while the proverbial "uh oh" occurs when, for example, the shoe vendor shows up with an excessive back order.
Omaha Steaks not only deals with the tenderness of beef; it also must forecast and take delivery of dry ice on a daily basis. "We don't wan to inventory dry ice," says Tom Hartley, Distribution Center Manager for Omaha Steaks. The stuff dissipates. Depending upon the size of the ice, loss could be as much as 20% a day. Hartley adds that Omaha Steaks aims for exactly the amount needed. How close do they come? "Very close," says Hartley.
What do others have in common with Omaha Steaks. They know there's also a sizzle that has to be sold. Marketing considerations (and often departments) affect the packaging material.
"We look at it as an aspect of customer service," said Brian Bishop. "We
want the right size box, and we want it to protect contents so customer
receives an order as it was seen in catalog.. . We purposely do not
promote our box simply because it might be an invitation to tamper.. .
.We've reopened the d discussion, however, and are considering a
different presentation maybe for fall." The Boston Museum of Fine Arts
does have a gift boxing program, particularly for holiday season.
As part of its marketing approach, the Honey Baked Foods trademark goes
on just about all the packing material. For example, it appears on the
Styrofoam lids and on the corrugated cartons. The company definitely
goes for "the wow factor," according to Scot Sandstorm.
"We review wrap seasonally," said Gayle Beamis of DM Marketing, "and advertise accordingly in our catalogs." DM uses white boxes. "We did have logo boxes," added Beamis, "and decided that plain white would help our costs. Esthetically it could be just as nice as having a logo box." The company uses tissue-lined enameline boxes (shirt size or coat size) for some gifts. The wrapper ties a ribbon around the box which is then inserted into another box. There is a nominal charge to the customer but no profit to DM Marketing.
In his talk at NCOF, Raymond A. Hajek, of Teneco Packaging-AVI offered this checklist to test how well your packaging plays to the consumer: Is my package easy to open? Does it create a mess when opened? Is it easily disposed of? Does it prominently display a recyclable symbol? Does it contain full information on how to return items? Does it reflect out corporate image? Does it convey the quality of the product?
One commandment seems to affect every area in which packaging material plays a role: Thou shalt have good relationships with thy vendors.
"An important part of any company's strategy as far as cost control and savings go," says Scott Saverstrom of Honey Baked Foods, "is that you have to have a close tie with your vendors. Nurture it; build upon it." Such a genuine relationship yields a desire to work with each other and the important cement of candor. Price hikes, due to increased costs, can be dealt with in an atmosphere of mutual respect.
"We want companies to make money when they deal with us," says
Saverstrom. "We encourage them to pass through their costs. We just
don't want our materials to rise in cost at a rate that is greater in
proportion than the vendor's costs." He added that additional plusses
from a good working relationship are identifying hidden costs and
working together to lower them. This includes negotiating to pay
invoices on 60 or 90 days.
Vendors-- such as RanPak, Sealed Air Corp. and Tenneco-AVI -- also will
help you set up their systems and supplies in your facilities.
"It's a consultation process," explained Kathleen Owczarski who does Marketing Communications for Sealed Air Corp. "We talk to the person; find out what it is they are shipping; do package design for it; and bring it to a lab for test. Customers often do their own tests to see how well it survived. There is a lot of consultation. Is automation better for them? Do they have or want just in time inventory? Can they work even faster and commit to shipping dates more easily if they centralize their packaging? If they have a high productivity requirement, they might want to automate. They still might need individual work stations where they can still use systems off-line."
"We do system engineering," said John Naccarato, RanPak's Marketing Director. The vendor helps customers and prospective customers find the right location for RanPak's PadPak or PadPak, Jr. The systems essentially enable the user to manufacture two or three-ply kraft paper packaging for items and wrap them on the spot.
"The secret to reducing costs with PadPak is to use it correctly," said Naccarato. "People tend to overpack. We'll show how to fill every void and use less of the product."
Hajek's NCOF talk also included a checklist for the evaluation of a
packaging materials supplier. His recommended questions are as follows:
Are their deliveries on time? Do you always receive the products
ordered? Is the quality as promised? Will they inventory and make just
in time deliveries? Do they offer a complete product line so you can
have options? Will they Test Package Performance for you? Do they
consult and offer solutions or just supply materials? Do they offer a
package designs service? Is your sales person supported by a customer
service representative? Do they measure their own performance?
The answers to these seemingly simple questions yield a complex answer.
In fact, nothing is simple about the seemingly humble packaging
materials. Executives who must make decision must do so in an
environment of constant change. Vigilance and openness to new ideas are
highly desirable responses.
"Every day," said Scott Saverstrom, "we keep our eyes and ears open to
new ideas. They might come from new employees or temps coming on during
the peak season , as well as suppliers. We're always looking for a
better way of doing something that saves money and results in the
customer getting the product in a wholesome condition.
From: Wellcome Foundation Archive
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