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35 min read
How EPR is Reshaping What Total Cost of Ownership Looks Like
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3 min read
Managing multi-site packaging operations is a challenge at any time. Each site may have different equipment, processes, and capabilities. While this may work on a local level, inconsistencies across sites often cause major inefficiencies on an organizational level when demand rises.
Peak season magnifies these underlying hidden issues. These issues can become worse with certain external pressures, like supply chain shortages, unexpected equipment maintenance, weather conditions, and shipping surcharges.
Improving packaging processes across multiple sites ensures that throughput remains high, and product quality is consistent.
Here are five hidden cross-site risks your packaging operations team should plan for before peak season ramps up.
HIDDEN RISK #1: Inconsistent Packaging Standards Across Sites
ISSUE
Having separate packaging standards, including different pack methods, materials, specifications, or processes for similar products results in different quality, throughput outcomes, and increased costs.
IMPACT
Inconsistent packaging standards across sites cause different levels of protective packaging and customer experiences, influencing product and brand reputation. The product should look the same regardless of the facility that produced it or shipped it.
AMPLIFIER
When packaging projects are pushed to a larger scale, inconsistencies can become more apparent.
SOLUTION
Standardization of materials, packing procedures, and operations criteria ensure alignment and a consistent final product. Optimize communication across departments and sites1 to improve visibility and insights.
HIDDEN RISK #2: Lack of Total Cost of Ownership Visibility
ISSUE
Without a standardized approach to packaging procedures and materials, it’s difficult to see the true cost of ownership—the total cost producing and shipping a product—across your packaging operations.
IMPACT
Total cost of ownership2 goes beyond materials. When measured separately, the costs of labor, damage, freight, waste, and reshipping reduce operational efficiency and increase your expenses. Differing approaches mean that you do not have total visibility into the performance of your operations.
AMPLIFIER
With each site acting independently, you’re not able to leverage your resources and optimize your operations throughout your organization. Or worse, packaging decisions implemented at one site may cause hidden costs elsewhere.
SOLUTION
Use data to analyze the current state of your operations across all sites to consolidate SKUs, develop solutions to decrease damages in transit, and standardize processes.
Are you optimizing the total cost of ownership?
Our Packaging Materials Decision Scorecard helps you assess your Total Cost of Ownership in 6 key areas, including damage prevention, freight considerations, and EPR readiness.
HIDDEN RISK #3: Compliance & Extended Producer Responsibility (EPR) Exposure
ISSUE
Tracking and reporting procedures can get complicated for packaging operations located in multiple states. Different interpretations of what it means to be compliant lead to confusion and exposes your organization to unnecessary risks.
IMPACT
State regulations are already complex, but EPR raises the stakes. With each state passing different EPR requirements and fee structures, the threat of non-compliance and the possibility of expensive fines rise.
AMPLIFIER
Production volume increases during peak seasons, and material substitutions are made to perform better in more extreme weather conditions, making it more difficult to manage. When standards, materials, and documentation vary by location, it’s difficult to ensure compliance.
SOLUTION
Build a cross-functional team that includes stakeholders from various departments and locations to improve visibility, establish processes and responsibilities, and document reporting.
HIDDEN RISK #4: Packaging Capacity—Local vs. System-Wide Demands
ISSUE
Focusing solely on local site readiness and failing to plan for contingencies across your entire packaging operations can become problematic when unexpected issues arise.
IMPACT
Increased demand causes bottlenecks and puts a strain on a local facility’s ability to handle all of the orders. If unprepared, other sites may not be able to absorb production shifts, causing delays and lost revenue.
AMPLIFIER
Unplanned equipment maintenance, production delays, or supply chain challenges may be fine under normal circumstances, but when demand is increased, multiple sites can get maxed out.
SOLUTION
Review your production capabilities and determine what maximum capacity looks like. Reference past issues across all locations and create contingency plans to shift operations as needed.
Summer Packaging Operations: Risk Assessment Scorecard
This self-assessment helps you evaluate six key areas throughout your packaging operations to determine what you need to prioritize and invest in to reduce heat exposure risks, materials exposure, and improve consistency.
HIDDEN RISK #5: Training & Pack-Out Consistency Challenges Due to Volume Pressure
ISSUE
The fluctuation of pack-outs, or how products are packaged, from site to site differs when it comes to training standards. This slowly affects the consistency of the pack-outs for similar items, product protection, reduced productivity, and brand perception.
IMPACT
Inconsisent pack-outs may cause damage in transit, increasing costs to repackage and reship, affecting customer experience and your brand reputation.
AMPLIFIER
Labor-related issues escalate during peak season as resources become strained. The combination of short staffing, increase in temporary workers, shift changes, and variation in staff experience becomes more apparent.
SOLUTION
In addition to onboarding seasonal workers, schedule refresher training for regular staff, provide documented standards, and conduct operational checks to ensure pack consistency.
Don’t Wait Until Peak Season Arrives to Tackle These Hidden Risks
Review your packaging operations from both the local and organizational levels to identify strengths and address weaknesses. Evaluate operational readiness and determine what to prioritize. Consider testing solutions in a few locations before standardizing them system-wide. Assess what is needed to ensure compliance and present a consistent brand experience.
Addressing cross-site inconsistencies early helps your team prepare for the added pressure and complexity that come with peak season demand.
Read how we collaborated with KeHE to consolidate and standardize their packaging SKUs to simplify their proccess and increase efficiency across their 20 locations throughout the U.S. and Canada.
Resources
- Packaging Digest: How to Optimize Your Packaging Department
- Pregis: Smarter Packaging Starts With Total Cost of Ownership
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