Unlike their consumer counterparts they may not have sexy shapes or glitzy graphics, but transit packs can hold the key to cost effective supply chains writes Pauline Covell
Whether it contains expensive consumer durable items such as computers or auto parts, health and beauty products or food, a good transit pack may make the difference between profit and loss. If it allows the slightest amount of damage to occur to its contents the result is returned goods. And that is bad news. Bad news not only in terms of costs for the packaging users, but also in the long term repeat business with their customers.
Workhorse of the transit world, corrugated fibreboard provides the cushioning that is so essential to protection against the bumps and drops of road, rail, air and sea. And it has seen somewhat of a revival with today’s rapidly changing production needs and environmental and legislation conscious world, as Chris Trevisick, commercial manager of VPK Packaging company, Rigid Corrugated, points out: “Customers have lead times that are getting shorter and shorter. They need packaging availability at short notice.”
Rigid specialises in producing corrugated cases and inserts for “high service demanding” customers – those who have “fluctuating supply needs”. Typical markets are food, contract packaging fillers, especially health and beauty and packaging bottle suppliers.
“Corrugated is still a good, strong medium. It is also flexible as you can increase the depth, length and design of the case quite easily, ” he adds. “Markets today are driven by the supermarketeers. They call the shots. Take Aldi, for example. They are moving towards high quality transit boxes inside the store.
“Packaging buyers are constantly changing and each one has to make their mark. So a key element in our service is to engineer the costs out. We employ packaging engineers and designers specifically to provide that for our customers.”
Designing those cases and containers to suit their contents is an essential, but often-unsung skill. It’s a skill that not only leads to damage reduction but also can take costs out of production. D S Smith’s 2003 Silver Starpack award, for example, recognised this skill for a BC flute double wall design for a range of five boiler kits of differing shapes and sizes. The end user Boulter Buderus was faced with warehousing and stock problems. There was an additional problem: some of the kits were being sent in two separate cases, which sometimes resulted in half the high value kit being lost in transit.
D S Smith designed just one case and fittings common to all the kits. The clever part is that two die cut pads, attached to the fitting, are used to take up the height differential across the range. As a result packaging costs have been reduced by 45%, storage space by 48% and packing time by 26%.
Service is an issue reiterated all around the business. Tony Thorne, CEO of David S Smith Group – commenting on whether or not there was over-capacity in the corrugated transit packaging sector – says: “It depends on the country; the UK is probably bang in the middle if you take a snapshot across Europe. If you add up all the nameplate capacity and divide it up by the number of hours available, then yes there is more corrugated capacity than we need.
“What’s very important for our industry to understand, however, is that it’s your capacity to meet delivery times rather than your nameplate capacity that really counts. We are a service industry. There’s more cost associated with the service around our products, than with the products themselves.
“Because of the service issues you’re only likely to achieve perhaps as little as half its potential output; not because you can’t run it at full capacity. If you price on the basis of constantly hitting full potential performance you’ll be disappointed.”
Will people look at price? “Yes they will, not because they want to beat up on their packaging supplier but because, in many instances and particularly in the whole area of supermarket packaging, for many of the branded products the cost of the packaging is a significant part of the cost of the product on the shelf. It’s quite different where you’re looking at an industrial product – a TV set, or a machine tool – where the cost of the packaging is relatively small in relationship to the cost of the item.
“It’s up to the packaging company to demonstrate and prove its ability to work in taking cost out of the chain that’s important, rather than simply taking cost out of the product.”
Fragile, high cost items sometimes call for extra protection. Institute of Packaging Starpack Awards judges described one Gold Star and Technical Innovation winner this year as: “An unequalled solution for the packaging and transportation of desktop PCs.” Sealed Air took the awards for its corrugated and PE foam combination pack for Research Machine’s Crusader computer, instruction manuals, cables and software.
Comprising a BC flute outer, an accessory tray and Twist and Fit Stretch Stratocell PE foam, the design uses “minimal materials courtesy of the properties of the foam, which can withstand multiple drops. It is both reusable and recyclable, highly functional and provides high performance, easy handling and good economics.”
The built in tension of the stretch feature allows the protective pack to grip the product, which is claimed to improve greatly the ease of loading into the outer case.
In a closed loop situation transit packaging is sensibly designed to be returnable. A good example is in the automotive industry where parts frequently travel straight from supplier to the assembly lines. SCA Packaging Industrial Division’s award winning design for BOS Automotive contains 72 electric sunblinds destined for Toyota.
The bulk container comprises a heavy duty triple wall corrugated sleeve with HDPE vacuum formed top cap and base/pallet and innovative internal expanded PP end mouldings which hold the parts vulnerable to damage. The mouldings are configured in six pairs (two per layer) each locating and sufficiently separating the sunblinds, claims SCA. Clever features are the plastics locking devices included in the sleeve. These lock to both pallet and lid so there is no need to strap the container. A drop front is included for easy access when loading and unloading. The pack is nestable for return journeys and the pallet includes four-way entry forklift truck access.
At the other end of the size scale are individual mail order packages designed to withstand the rigours of the postal or courier services. A typical example is a perfume transit mailer engineered and produced by Smurfit (South West) for Broad Oak Toiletries. Prior to using the new design the company was posting the glass bottles in a B flute box with no added protection. Broad Oak was understandably experiencing a very high level of breakages and customer complaints. Whilst seemingly simple, the solution has been to provide an interlocking box, containing a cleverly designed fitting that forms a bottle cradle, suspending the bottle in the middle of the pack creating an air void of protection.
The designer resisted the temptation simply to wrap the bottle in a cushioning material – while providing protection, this material would also take up storage space as well as involving the hassle of hand wrapping. In addition, the pack can be adapted to accommodate any shape of size of perfume bottle, while appearing tidy and presentable to the receiver. Smurfit claims the pack is cost-effective and has also significantly reduced breakages and complaints. Limited parts also means minimal storage space is required.
Consolidation across the world has been a feature of the corrugated business throughout the last couple of decades. The large players such as Mondi, SCA, D S Smith, Smurfit and Linpac have all been involved some way along the line.
“Through a policy of acquisition SCA Packaging has led the consolidation movement in the packaging industry,” claims the company.
Recent examples have been its acquisition of Specor Systems, producer of customised packing in Wisconsin and Minnesota, USA; the Spanish company Bertako was another target acquired by SCA in 2002 and in Denmark it has restructured its operations after the acquisition of Danapak, Danisco and Soren Berggren (Metsa Corrugated).
Will there be more contraction? “I see it as dynamic. I think the bigger companies will seek to increase their share of the market, and some of that will be through acquisition,” says Smith’s Tony Thorne.
“But I also think that you do have the opportunity for the smaller players to set up or expand their own businesses. This is a local business. Simply by being big doesn’t automatically ensure that you’ll be successful. The economies of scale in corrugated are quite different from say the economies of scale in manufacturing glass.”
Comments Rigid’s Chris Trevisick: “Yes there is a trend towards consolidation in the rest of the industry, but VPK is not focused on growth through consolidation. It is keener on those who are involved in working with companies who have a high service demand. Our growth will come from profitable businesses or those we can make profitable.”