4.3.3 Warehousing issues
Traditional warehouse order picking can be considered as a packaging operation.
In a typical warehouse for consumer goods, large packages, e.g. full TLs
or full palletloads are received. These are dismantled into smaller units, e.g.
shipping containers or consumer packages as orders are picked. The orders are
then repacked into mixed loads for delivery to logistical customers such as
retailers. Sometimes the orders are so small that individual items are picked
from shipping containers and re-boxed into a delivery package. Sometimes the
delivery package is simply an original box or pallet repacked with a mixed
load. In other cases, returnable pallets or totes are used to deliver to the retailer.
Modern warehouses are called distribution centres, to emphasize that they
only profit by moving goods. To a distribution centre, storage represents unproductive
assets. The productivity of warehousing is very important because order
picking and materials handling are generally very labor-intensive. There is a great
LOGISTICAL PACKAGING FOR FOOD MARKETING SYSTEMS 105
deal of emphasis on tracking and managing productivity. Cases or orders picked
per hour, trucks loaded or unloaded per hour, and pallets received and put
away per hour are examples of warehousing productivity measures.
Packaging can add productivity to order picking operations when products
are packed in order quantities and cases that do not require additional labor to
open or split. For example, if five is the standard order quantity, then products
should be bundled into fives, rather than the traditional case quantities of 12,
24 or 48. The persistence of packing old-fashioned dozens is curious, given
more rational reasons to specify other counts.
The trend in distribution is to speed up the order filling process, and many
warehouses are now no more than cross-dock operations. They quickly assemble
the mixed load orders as shipments are received, or simply transfer already
mixed loads from a single manufacturer to delivery trailers. In cross-dock
situations, there is an increased demand for packaging to be modular and
automatically identifiable to facilitate mechanized sorting.
On the other hand, some warehouses still serve a significant storage function.
Packaging can improve storage efficiency when packages are dense and
maximize the use of cube space. Most warehouses store in, and pick from,
racks. Shipping containers and palletloads should be sized to fit the racks (and/
or visa versa). The stacking height, and therefore the required compression
strength, is determined by the warehouse configuration. The stack height is
only one palletload if racks are used, or it may be 3–4 palletloads high on the
floor. Compression strength is affected by the strength of the shipping container
and whether the contents help to support the load and the stacking pattern.
Corrugated fiberboard box walls alone can rarely provide sufficient compression
strength for long term storage, because the corrugated fiberboard weakens
in the presence of relative humidity and over time. Stack compression failure
damages product and is also a safety hazard because a stack can fall over and
injure or kill workers.
Two other protective factors are best controlled by the warehouse: pests and
temperature. Although packages can be made to resist insects and mice, it is
better to keep the warehouse clean to eliminate their presence. Effective hygiene
and pest control procedures must be implemented. Spillage should be promptly
cleaned up, and traps should be set in key pathways.
Most food warehouses have at least three temperature zones: ambient storage
for shelf-stable foods and general merchandise, a refrigerated area for fresh food,
and a frozen storage area. With more varieties of fresh produce, freshly prepared
meals, dairy products and bakery items, the demand for refrigerated storage
has grown. Some refrigerated warehouses, especially those dealing with a wide
variety of fresh produce, have several different-temperature rooms where each
fruit or vegetable can be stored in its most advantageous climate. Most warehouse
loading docks, however, are not refrigerated, and this can be a severe
breach of the cold chain, especially if loads are staged on the dock for a long
106 FOOD PACKAGING TECHNOLOGY
period of time. Although insulation can be added to packaging, it is usually
more efficient to control the temperature of the facilities, especially in conventional
supply chains for food.
Since packages are handled many times in warehouses, they must provide
protection from impacts. And since they are often packed into mixed loads for
shipment, they need to provide protection from stacking and puncture by other
types of packages. They should be compatible, if not modular, to facilitate
stacking and cube minimization.
Packaging also needs to make it easy to find the right items when picking
orders. Easy to read stock keeping unit (SKU) identification is essential,
regardless of whether it is read automatically or in the old-fashioned way. The
markings should be concise and legible, on all four sides if necessary. The
name of the manufacturer, brand, size and count should not be obscured by
advertising messages. Packages have to be read when they are received, put
away in the correct location, picked, repacked, and shipped. Good packaging
communication can prevent shipping mistakes.
In many cases coordination is lacking among the members of a supply chain
to implement a common automatic identification symbology. One packaging
solution for warehouses is the use of slave pallets or in-house stickers which
have a license plate bar code, magnetic strip, or RFID tag. The license plate
can be used to track and record the status of palletloads throughout the single
facility.
4.3.4 Retail customer service issues
Once a supply chain customer, such as a retailer, manufacturing plant, or contractor,
receives a shipment, logistical packaging has to perform a new set of
functions. The package needs to be opened easily without damaging the
contents. Handling and the unpackaging operation should be quick and efficient,
and reclosure may be desired. The product should be easy-to-identify,
and the package may be required to display, provide special instructions, for
installing and using the product. The package should minimize the customer’s
cost of disposal. Traditionally, retailers did not have much control over the
packaging that they received. Most large manufacturers planned packaging to
best suit their own operations, and small retail customers had little power to
request improvements.
Increasingly, however, food marketing channels are dominated by large
retailers who demand specific types of packaging. For example, grocery chains
increasingly specify the durability of shipping containers and the information
needed, prohibit some box styles, and help their suppliers to redesign packages
to better maximize cube utilization in transit. Some retailers even control the
consumer packaging and sell their own brands. Discount chains often specify
that fast-moving products are to be packaged on display-ready small pallets
LOGISTICAL PACKAGING FOR FOOD MARKETING SYSTEMS 107
that generate minimum waste. Some retailers demand that produce suppliers
use standardized reusable totes, described in Section 4.5.3.
Increasingly, manufacturers find that designing packages to add retail value
can be a profitable strategy to increase sales. Packaging affects the retailer’s
direct product profitability for every product, because a retailer’s profit is
directly related to the operational costs for opening packages, displaying and
selling products. For example, bar codes that permit automatic scanning at
a retail check-out counter reduce the cost of price marking, check-out, inventory
control and reordering. Since packaging affects a retailer’s productivity,
cooperation between manufacturers and retailers can improve system-wide
profitability.
The most important customer service trends are more display-ready cases,
intelligent labelling and easy-open features like film wraps or reinforced strips
that rip through corrugated fiberboard. Easy-open features also can help reduce
customer-caused damage from razor blades. The graphics on most pointof-
purchase display cases are of high quality and designed to attract attention.
Some retailers are even requesting electronic security devices and
RFID tags which could allow all of the cases on a mixed load to be scanned
simultaneously.
Another retail trend is the efficient consumer response (ECR) strategy, in
which products are packaged by suppliers in mixed cases to bypass the traditional
warehouse order-picking operation. Packages may contain a number of
different SKU’s packed to order. They are shipped through a cross-dock operation
controlled by the retailer, where packages are sorted using bar codes into
trailers to be delivered directly to retail stores. In such cases, the markings and
package size need to facilitate efficient sorting and control.
4.3.5 Waste issues
The cost for discarding shipping containers is generally paid by logistical
customers like retailers. Besides the environmental impact, disposal is costly
and can severely reduce a customer’s productivity. There is a clear incentive
for firms to reduce, reuse and recycle logistical packaging waste in order to avoid
or reduce disposal costs.
This economic incentive has caused logistical packaging to be less of a
target for legislation than has been consumer packaging waste, where disposal
is an external cost. In Europe, where there is packaging waste legislation, the
provisions for logistical packaging are different from those for consumer
packaging. They usually result in the packer-filler paying a tax that funds
a recycling infrastructure and reduces the retailer’s disposal costs.
Each strategy – reducing, reusing and recycling – has an economic impact
beyond disposal costs. Reductio
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