Packaging Compliance: A Global Perspective
Packaging Compliance: A Global Perspective
Of the developing countries involved at the UN COP26 Summit in Glasgow last year, India was way ahead in the ambition of its commitments. Led by PM Modi, India is committed to increasing the generation of non-fossil fuel-based energy to 500 GW, which will account for more than 50% of our energy requirements in 2030. We also agreed to cut carbon emissions by 1 billion tonnes. Accounting for a business as usual scenario, India’s carbon emission would be tallied above 4 billion tonnes without special efforts to reduce carbon emissions. Essentially, this means we will cut emissions by about 22% percent by 2030. India will also cut its carbon intensity by 45 % in the same period, which means we will allot renewable energy to a larger cross-section of industry and commerce sectors to reduce dependence on fossil fuels.
The targets are ambitious but achievable. The reason we say achievable lies in the definition of net-zero. Simply, net-zero by 2050 means that the world, our country included, will be able to offset carbon emissions to the environment by balancing them with carbon removed from the atmosphere. There are many ways to orchestrate this balance—packaging material, used by 99.99% of manufacturers in the country, adds to the waste management requirements and often ends up in landfills. We need to reimagine the role of packaging and how a switch to sustainable packaging as per MoEFCC policy can help us reduce the environmental strain and open new business opportunities.
What do the MoEFCC Guidelines Cover?
The new policies coming into effect over the last 18 months and through 2022 can pose a challenge for manufacturers. The Plastic Waste Management Amendment Rules, 2021, announced in August by the Union Ministry of Environment, Forest and Climate Change (MoEFCC), identified that 20 identified SUPs will be phased out by next year. These are generally classified as lowest utility and highest environmental impact. In India, 18 states have already implemented a complete SUP ban, but the upcoming July milestone will extend the legislation across the country.
- Plastic packaging material regulations were increased to 75 microns from 30th September 2021 and will subsequently shift to 120 microns thickness from 31st December 2022.
- Non-woven plastic carry bags shall not be less than 60 Gram Per Square Meter (GSM) from 30th September 2021.
- The manufacture, import, stocking, distribution, sale and use of the following single-use plastic, including polystyrene and expanded polystyrene, commodities will be prohibited from 1st July 2022.
- The policy regulations cover a variety of products, including – earbuds with plastic sticks, plastic sticks for balloons, plastic flags, candy sticks, ice-cream sticks, polystyrene Thermocol, packaging films around sweet boxes, invitation cards, and cigarette packets.
- The regulations do not apply to shall not apply to commodities made of compostable plastic.
Improving Packaging Safety Guidelines:
We are also witnessing stricter regulations regarding packaging material safety, especially for food products. The use of specific material for perishable or shelf food products does not allow recycled plastic or newspaper packaging. Policymakers have also mandated that it is the responsibility of the printers and producers of food packaging to ensure there is zero transfer of printing ink to the food product and that the packaging material does not have any reaction or potential for contamination in the storage and transport supply chain. Regulations like these necessitate a rethink on manufacturers to ensure they do not fall afoul of the laws. With a growing consumer awareness surrounding organic food and environmental footprint, brands must ensure that this transformation happens immediately.
For example, the government has banned using a solvent commonly found in printer ink called Toluene. Also called methylbenzene, a hazardous, clear, colorless liquid that turns into vapor when exposed to air at room temperature. Toluene has been linked to several acute and chronic health concerns, including eye and throat issues, breathing difficulties, and increased risk of developing allergies and asthma.
The Complex Reality of Global Packaging Compliance:
While India is taking progressive steps towards transforming the packaging industry into a sustainable, conscious, and safer ecosystem, developed markets like the USA and the European Union already have stricter standards and benchmarks.
The reason this complexity is essential to understand is simple. It is time for an Indian packaging manufacturer to look beyond India as a market. However, navigating the compliance terrain based on geographies can be complex. A digital, end-to-end, global packaging and supply chain solutions provider represents the ideal go-to consultant for help in navigating the complex layers of global packaging compliance.
Globally, brand owners have to also adhere to Extended Producer Responsibility (EPR) reporting legislation across the world. EPR makes brands responsible for declaring the packaging material on shelves and highlighting the end of the lifecycle process for the same material after consumption. The crux of the idea is to ensure that manufacturers are thinking beyond just the product’s sale to the consumer.
A quick tour around the globe of some of the largest producer economies helps us formulate the depth of the compliance complexity that a packaging manufacturer might encounter:
European Union
- They aim to effectively phase out single-use plastics in a bid to reduce marine contamination and pollution.
- Encouraged use of reusable containers through deposit return schemes (DRS). These schemes have gained much traction in countries like Sweden and Norway.
USA
- A total ban on the use, production and import of paper-based food packaging that contains PFAS. California has been exceptionally transparent about the findings linking PFAS to cancer, vaccine disruption and other severe environmental and bodily consequences.
- Misleading advertising on packaging will also be prohibited. There is a law to prevent the term ‘recyclable’ from being used on product packaging without verification to avoid misleading consumers who believe they are making ethical purchases.
Australia
- 100% of all packaging material should be reusable, recyclable or compostable by 2025.
- 70% of plastic-specific packaging should be recyclable or compostable by 2025.
- 50% of packaging components to be made from recycled material by 2025.
- Single-use plastic packaging will be obsolete by 2025
China
- China will ban all non-degradable plastic bags by 2025 in a 100% ban across all provinces.
- By the end of 2022, all major hotels and guesthouses should have stopped offering disposable plastic products, and by the end of 2025, smaller operations will be expected to have ceased as well.
The variance of compliance laws and their implications on customers of packaging material manufacturers in India is equally significant. One way for brand owners to avoid the risk of non-compliance is to go by the strictest design requirements for packaging that is sold worldwide. However, this may not always work. The more niche the need, the more challenging it becomes to maintain feasibility and efficiency to apply it to all packaging.
Suppliers also need to pay close attention to all the different requirements when deciding whether “worldwide” environmental labeling is a feasible and effective option for their specific case. Depending upon the types of products sold, the packaging materials used and the types of packaging components most frequently placed on the market, they can decide whether to create region-specific labeling and environmental claims or a worldwide labeling system.
Fuelling Global Packaging Ambitions
About five years ago, the Ministry of Commerce and Industry set up an independent committee to oversee and keep track of global compliance laws. The main reason to bring independent experts from organizations like the Indian Institute of Packaging, Export Development Authorities, industry associations and research institutes was to overcome the enormous rejection ratio of packaging material leaving Indian shores.
In 2018, the Indian packaging industry was the fifth largest globally. With the advent of the pandemic and the rapid shift to digital purchasing of standard requirements like grocery, the demand for packaging is bound to sky-rocket further. Yet, the Indian packaging industry only comprises about 4% of the world and is way behind markets like Brazil, China and the USA.
Clarity on global compliance laws, access to innovative packaging production technology, and material and capital to scale production are the prime growth areas Indian packaging manufacturers classify as the top priority. As global demand for sustainable packaging delivered at scale peaks in the next decade, Indian manufacturers can look at a two-fold growth from domestic and foreign markets.
Digitalizing the Packaging Supply Chain
For packaging manufacturers to take advantage of the latent demand in the market, a few upgrades are definitely required:
- Compliance laws and the constant monitoring of global trends to capitalize on future demand
- Better vendor management is the need of the hour as packaging manufacturers will have to look wider for more material options.
- Balance of volumes and pricing to take advantage of the optimum SKU RoI
- Design innovation to compete at the global level while staying price-conscious.
- Strict process and quality control implementation to ensure seamless delivery and a superior customer experience
These are core tenets of the Moglix approach to helping more than 700 customers and 16000 suppliers manage demand and supply worldwide. As one of the world’s largest packaging supply chain platforms, our endeavor to digitize end-to-end procurement is what manufacturers need to capitalize on the massive influx of demand for better packaging solutions soon.
Good Things Come In Sustainable Packaging
Good Things Come In Sustainable Packaging
In 2019, India produced 660 lakh tons of plastic waste. Nearly 43% of this, roughly 280 lakh tons, is packaging waste. Most of this is single-use plastic. Let that number sink in.
There has been a seismic shift in customer behavior, demand for goods, and a multitude of supply chain disruptions in the past two years. The COVID19 pandemic has changed the way we consider purchase decisions and accelerated a shift to digital buying for the large swathe of middle-class India. The Indian Institute of Packaging (IIP) estimates that the packaging consumption in India has increased by more than 200% – from 4.3 kg per person per annum to 8.6 kg pppa.
Paper is a more sustainable option than single-use plastic. Industry figures indicate that more than 49% of all paper produced in India is used for packaging. Given the global demand for craft paper in markets like China and the US leading procurement demand, India and other emerging economies are feeling the pricing pinch.
India’s COP26 Commitments and Compliance Framework for Sustainable Packaging
The Glasgow Climate Pact has clearly demarcated two important considerations. Net-zero emissions are the obvious first. However, the path to get there will be customized to ground realities. India finds itself at a critical reboot stage with regards to the transition map for governments, large enterprises, and MSMEs to hit the ground running with digital transformation.
The Cost of Climate Change Report spells out a dire implication of climate change. It is estimated that 3-10% of our GDP will be compromised by 2100 while increasing average poverty rates by 3%. If we are to achieve a target of becoming a $5 trillion economy by 2030, we will have to achieve a real GDP growth rate of 12.5% and create 90 million jobs in the non-farm sectors. Integral to the roadmap for achieving this vision is the substitution of existing high carbon content packaging materials, suppliers, and processes with more sustainable packaging materials, suppliers with such manufacturing capability, and demand aggregation in the end-to-end packaging supply chain.
The Plastic Waste Management Amendment Rules, 2021, announced in August by the Union Ministry of Environment, Forest and Climate Change (MoEFCC), identified that 20 identified SUPs will be phased out by next year. These are generally classified as lowest utility and highest environmental impact. In India, 18 states have already implemented a complete SUP ban, but the upcoming July milestone will extend the legislation across the country. The shift to more sustainable packaging material will be swift, and manufacturers need to display vision and plan to ensure they are not plagued by supply chain disruptions in the transition process.
The Search for Sustainable Packaging Material Substitutes Begins:
The government’s push for the compulsory use of plastics of a minimum of 75-micron thickness from December 2021 and a minimum of 120-micron plastics from July 2022 will generate demand for sustainable packaging and drive investments in these new products categories. The packaging product categories that are likely to increase demand are seaweed, organic fabrics, corn starch, wood, paperboard, recycled cardboard, and paper.
It is time for the Indian packaging ecosystem to move away from a siloed approach. Technology adoption is the need of the hour, not only for building better packaging material but also for the digital transformation of the packaging supply chain. Technology adoption in packaging materials can facilitate capacity expansion, bring economies of scale, and reduce unit costs. On the other hand, collaborative data sharing among the stakeholders in the supply chain can get greater visibility into demand and supply mapping across locations in India, pricing, and agile distribution.
The demand for single substrate packaging alternatives is set to soar. The cost and environmental benefits would be tremendous if we could bring that down to a single layer of substrate packaging. Consider an example of an FMCG manufacturer who currently uses three layered packaging materials: BOPT, LDPE, and a metal pack. Here are some examples of alternative materials that could play a significant role in the packaging industry in the next few years:
Bio-based Plastics – Bio-based plastics typically use food crops such as corn and sugarcane, both available in surplus in the country.
Polylactic acid (PLA) – Transparent solid polymer that is similar to PETE polymer but has a significantly lower maximum continuous use temperature
Poly hydroxyalkanoate (PHA) – is a much more eco-friendly polymer that can handle high temperatures and decompose in soil and waterways. Both alternatives are made from fermented corn sugar, and they can decompose up to 90% within 90 days if disposed of properly.
Paper-based packaging – Corrugated box and other forms of paper-based packaging are biodegradable if it does end up in landfill, can be easily recycled by end-users, and the raw material is carefully managed (basically planting more trees)
Edible packaging – Natural polymers in food packaging, like Algae, seaweeds, polysaccharides, proteins, lipids, or composites.
Bridging the Packaging Supply Chain Digital Divide
Plastics account for nearly a third of carbon emissions in core manufacturing verticals like metals, mining, and construction materials. Next in the pecking order of importance are energy, agriculture, allied activities, logistics, and HVAC, which represent the highest contributors. FMCG, consumer appliances, e-commerce, hospitality, and F&B also add their fair share of environmental footprint.
The answer to standardization of data sharing on carbon emissions compared to alternatives across a cross-section of manufacturers, MSME suppliers, logistics, and warehouse partners is undoubtedly a digital platform that can account for industry and process variations.
Unfortunately, digital integration in India’s supply chain is at less than 5%, obscuring visibility into carbon emissions at each stage of the supply chain. Due to the lack of this visibility, brands and manufacturers find it challenging to identify partners for on-demand sustainable transition who have the manufacturing capacity to scale with them.
Simply put, the easiest path to sustainability is through measurement. By analyzing data on carbon emissions and viable alternatives, all stakeholders can make responsible choices to bring transformative change quickly, at optimum costs, and without friction in the current packaging value chain.
How Can Brands Play a More Prominent Role?
Product packaging plays a prominent role in the purchase decision of the consumer. Primary packaging makes all the difference to the customer’s first impression and the brand recall later. Take the case of the food and beverage industry – chocolates, soft drinks, processed foods, packaged whole grains, and cereals, for instance, are packaged using laminates. The pandemic has changed consumer perception around packaging as well.
Brands need to put technology at the center of their transformation, create robust governance models to govern operations, and collaborate with a broader ecosystem to make a significant impact footprint. The surge in deliveries, wastage of packaging, and a growing consciousness of the digital consumer will force brands to consider sustainable packaging options carefully. Most studies indicate that consumers also evaluate brand packaging on their green footprint and low-touch point processes (the lesser, the better).
Here are the most important reasons why brands should strongly consider transforming their packaging usage:
- Be the ‘right’ brand – Consumers prefer brands with more sustainable packaging than their competitors.
- Talent retention – By doing the ‘right thing,’ brands build the perception of being a responsible producer, which affects employees’ morale and loyalty.
- Reduction of carbon footprint and costs – extends to the financial and social responsibility aspect advantages, which are measurable.
- Investment opportunities – the world is veering towards investing responsibly, and larger AUMs focus on brands adhering to ESG norms.
While this builds a strong brand image, the path to packaging material and supply chain transformation is complicated and needs an end-to-end advisor who can envision upstream and downstream requirements, mitigate risks and provide solutions platforms that enable seamless migration. At Moglix, we work with more than 700 manufacturers, 16000 suppliers, 40 logistics partners, and 30 warehouses into a single ecosystem for 6000 packaging SKUs spread across 45 categories to create an unmatched collaboration ecosystem for all stakeholders.
What will Drive Sustainability in Packaging?
Like us, all stakeholders in the packaging supply chain ecosystem are acutely aware of the implications of a collective failure to adopt more sustainable best practices. By reducing the compliance costs with the amendments to the Plastic Waste Management Rules, 2021, we enable large enterprises to hit the ground running with agility.
Industry leaders should aspire to create a brand of impact by revamping and reimagining product packaging and supply chain processes with technology at the core. A seamless transition, however, requires much planning. The brand perception, economic and environmental costs are too significant for companies to take lightly.
The pandemic, coupled with the COP26 commitments for a greener future and government legislation to eliminate single-use plastic, should be viewed as a golden opportunity to hit the reset button. By placing digital technology solutions, material innovation, and process optimization at the core for a better tomorrow, the government, corporations, and the supplier ecosystem can usher in a new age of conscious commerce. That is why it is time to say that good thing come in sustainable packages.
Moglix Sustainable Packaging Supply Chain Solutions
We are Moglix; India’s largest packaging solutions provider. From reducing costs, enhancing branding, and meeting sustainability goals, we enable enterprises to reimagine their packaging supply chain by integrating economic and technical efficiencies in one metric: sustainability. To learn how you can leverage Moglix sustainable packaging solutions, please reach out to us at info@moglixbusiness.com
The Complete Package – How Grocers Will Keep Pace with Online Consumer Shift
The Complete Package – How Grocers Will Keep Pace with Online Consumer Shift
The Indian online grocery delivery sector competition has ramped up massively over the last three months. Since e-commerce grocery retailers have upped their commitments to customers on the delivery time, a tidal wave change is underway in the online grocery shopping experience. It can put a lot of demand on the speed and sustainability of product packaging. Post pandemic, there has been a sizable shift in the audience ordering grocery online, with some reports indicating a change in more than 25% from offline to online. The number is only set to grow further.
The Indian online grocery market will grow at a CAGR of 36% to reach approximately $38 billion by 2028. While safety and food quality should always take precedence, secondary packaging options can address most of the delivery needs of grocers. In response, packaging may demand a sizable upfront investment to Grocers, but over time, it will encourage customers to make repeat purchases and gradually shape consumer loyalty.
Here is what will drive the packaging ecosystem for Grocers, aggregators, and consumers:
Aggregators role for grocers: As more consumers shift to online grocery shopping, grocers will have to cater to bulk packaging supplies across categories. Packaging aggregators will play a crucial role by providing a convenient one-stop-shop solution for all types of packaging required by grocers. Furthermore, the balanced offering of quality packaging products/materials at an optimized cost with exceptional customer service will become essential.
At Moglix, we have strong pillars to deliver on our customers’ commitment to ensuring millions of Indians have access to fresh goods when desired. Firstly, a dedicated NPD team works closely with customers to simplify packaging demands and bring down complexity across various food categories. This helps save development time and material costs and enables a more sustainable footprint for each ecosystem link.
Aggregators need to also position themselves as the source of innovation and capitalize on new trends in packaging. A few examples of these trends are:
- Replacing bubble wrap with packing peanuts made out of corn or honeycomb structure
- Use of high strength to weight ratio fabric with minimum weight to insulate material in saddlebags
- Engineered corrugated cases as per the supply chain requirement
Trends and Advancements in Grocery Packaging: What’s New?
Extending the Shelf-Life of Edibles
Trends and advancements regarding perishable food items are also critical – e.g., There is a rising acceptance that the salt used for preserving meat items needs to be avoided for health issues and replaced with natural ingredients. Instead, lactate solutions have a bacteriostatic effect on meat and extend shelf life by 50-100%.
Sustainability and Compliance
Grocers have been using food-grade polymers, but there is a widespread shift towards sustainability with time. Materials have to be compliant with government regulatory norms, like the minimum microns rating will be increased from 50 to 125 from July 2022.
Material Use
From a material point of view, grocers need to familiarize themselves with PCR grade packaging material (PCR PET & PCR PE) for poly bags compostable polymer grades like PLA and starch-based films.
Last-Mile Delivery and Distribution
As the penetration of delivery services increases, grocers can take advantage of integrated aggregators like Moglix, which offers an unprecedented distribution footprint (35k pin codes), a unified supplier base that brings tremendous savings due to economies of scale.
Technology Integration in the Supply Chain
Technology or platform-oriented aggregators offer higher visibility and control on inventory, reduce wastage through Just In Time delivery, and improve customer service benchmarks. This allows grocers to integrate technology suppliers, category expertise, logistics, and warehousing in a single supply chain ecosystem.
With their packaging needs well taken care of, grocers can focus on reducing inventory wastage and engage with their customers for a more significant business impact.
Wrap Up: The Evolution of Packaging Materials and Designs
Wrap Up: The Evolution of Packaging Materials and Designs
Packaging, the technology, and the art of preparing the artifact for convenient transport, storage, and sale, has an exciting journey along with the beginning of humankind. Close observation reveals that the development of packaging materials and packaging designs evolved around the culture, global epidemic, and consumer behavior widespread around a given period. Let us look at how packaging has evolved.
Ancient & Medieval era (up to-20th century)
People produced and consumed most of the food locally during ancient times, so the food packaging was unessential. Ancient civilizations used vessels and containers made of natural materials like lotus leaves, shells, bamboo, palm leaves, gourds, coconut shells, and animal skin. Later on, there were discoveries of ores, minerals, and chemicals, leading to new packaging materials.
The Era of Dual-Use Packaging – Packaging for only high-value goods like jewelry, gift items, shoes, and premium foods. As the packaging materials were indispensable, people structurally designed these to serve dual functions after product use.
Building Brand Identity (1890-1910) –With rising trade, the phrase-” let the buyer beware” became popular. Hence, manufacturers turned to use packaging in innovative ways to establish their brand identity.
The Era of “Silent Salesman” (1920-40) –The rise of low-cost and clean packaging solutions allowed huge retail chains to come in who displayed products on the shelf.
Convenience as the Motivation (1950-70) –After the second world war, the consumer market exploded with the continuous innovations in aluminum and plastics. Hence modern-looking packaging materials were available at lower prices compared to traditional materials.
The Rise of Digital (1980-2000) – This era saw the rise in computing abilities and the evolution of printing technologies. As a result, execution and rapid scaling of business became possible. The growing fascination with plastics led to innovation in packaging designs, shapes, and materials that paved the way for use-and-throw behavior. Hence the non-decomposable packaging waste became the primary constituent of landfills.
Current Packaging Trends (21st century)
Environmentally Friendly Packaging (The Early 2000s)– The Environmental Protection Agency created stringent laws for businesses to reduce environmental impacts. Finding sustainable materials for environmentally friendly packaging and optimizing waste became a prime agenda. The industry started moving towards the circular economy from the linear economy.
2007-2021– A faster pace of life translated into consumption “on the go,” which, naturally, increased the need for packaging material for food. Let us look back at some of the best trends we have seen happening so far! Digital Printing – Digital printing enabled more options in personalization and customization when compared to other techniques. Examples of such personalization include Coca-Cola printing of customers’ names on the soft drinks containers.
We cannot talk about 2020 without talking about clean labels. Providing product information in a clear, concise, and transparent way augmented customers’ trust in the company’s brand name.
Coronavirus and Food Packaging- The COVID19 outbreak forced the surge of new developments. How long does the covid virus last on cardboard boxes? Does freezing kill coronavirus on food packaging? These questions aroused the greater interest of food brands and customers alike. Many food delivery brands experienced a rise in demand for new packaging ideas for food like disposable plastic packaging for food. The packaging industry focused on innovating packaging material for food to help food brands to meet these demands.
Touchless packaging – The pandemic has also accelerated the development of touchless packaging and operations like the design of touchless dispensers, touchless manufacturing & packaging of pharmaceutical instruments, personal protective equipment (PPE).
The Future of Packaging
The global packaging market is expanding with a 2.8% CAGR to reach US$1.05 trillion by 2024. Let us have a look at certain advancements which seem to dominate the future packaging market.
Optimized packaging solutions (Space and material saving) – Designing optimized packaging which occupies less space with thinner & stronger design, as storing and transporting mass amounts of packaging is also seen as less eco-friendly.
Smart packaging – Rise in the internet of things, RFID, biosensors, screens, compact power sources, and data storage will enable companies to receive comprehensive information on consumers and valuable data on buyer groups.
RFID tags relay information on the real-time location of product packages up to a distance of 100 meters and enable accurate product tracking. With blockchain, supply chain companies can document production updates to a single shared ledger for complete data visibility. Transactions are time-stamped and therefore businesses will be able to track a product at any time.
Edible packing – Use of natural polymers in food packaging, which are biodegradable, do not generate residue, have a low environmental impact, and are consumed by humans. Materials in use include polysaccharides, proteins, lipids, or composites.
Water Soluble packaging –Such packaging materials will dissolve in hot water. The main ingredients in this bio-based material are polyvinyl alcohol or PVOH, a synthetic polymer created without the heavy toxic metals to act as an alternative to plastic packaging like shopping bag retail packaging.
Self-cooling and Self-heating packaging – The package will self-heat and cool without an external heat source or power. It will be suited for military operations & natural disasters. The science behind this is an exothermic chemical reaction between anhydrous calcium chloride and water.
Active packaging / Antimicrobial packaging – With a CAGR of 6.62%, this market may reach a size of US $31.924 billion in 2026 from the US $20.386 billion in 2019. It will involve the addition or withdrawal of certain gases and liquids within food packages, which will inhibit the growth of pathogenic microorganisms and prolong the shelf life of food.
E-commerce Packaging – The e-commerce shopping experience will become more and more tailored to the customer allowing brands to accommodate their target market even further through packaging. Coming out of the pandemic, there is likely to be a surge in demand for sustainable packaging solutions. In fact, 82% of customers will likely prefer to receive their online order in cardboard boxes over poly bags.
Corrugated Packaging – To achieve sustainable goals, there will be a steep increase in applications for corrugated packaging materials. It will add up to a big win for corrugated box packaging. (30)
3D Printing – 3D printing will allow the packaging industry to manufacture for a much lower price by integrating manufacturing, warehousing, overseas shipping costs, and CO2 emission reductions. (27)
Wrap Up: Rise of Digitally Integrated Packaging Supply ChainsComing out of the COVID19 pandemic, technology integration in packaging will embrace new standards like digitally printed and serialized bar codes, variable data printing, and IoT. Higher technology integration will allow businesses and customers alike to have greater visibility and control on not only their product packaging but also performance metrics like product shelf life, wastage, costs, carbon footprint, and turnaround time across the end-to-end supply chain.
4 Essential Packaging Supply Chain Solutions for Manufacturers Ahead of Diwali in 2020
4 Essential Packaging Supply Chain Solutions for Manufacturers Ahead of Diwali in 2020
Exactly how robust are your packaging supply chain solutions? If you are a manufacturer, you understand that Diwali 2020 is going to put your packaging supply chain solutions to the ultimate test.
On the one hand, health and supply chain risks due to the COVID19 pandemic loom large. Sourcing the right packaging SKUs, optimising quality and cost, warehousing, and reducing last-mile friction are four major challenges this year. On the other hand, Diwali 2020 is the beginning of yet another busy festive season in India.
You and your team of supply chain managers need to map the pain points and make contingency plans. You also need to optimize your packaging supply chain management systems and be prepared to create great customer experiences. Here, we share a compact list of four essential packaging supply chain solutions that will help you prepare. Let’s explore.
Challenge 1: Sourcing the Right Packaging SKUs
Share the types of packaging solutions that you require with your packaging suppliers. Communicate your custom packaging solution specifications and ask for relevant samples and new product development capabilities.
Share the details of your brand persona and an outline of who your customers are. What are your unique supply chain challenges? Does your packaging resonate with your brand’s value proposition?
If you operate at the point of origin of the supply chain, prioritize the primary packaging SKUs that will contain the contents of your product. If you are a distributor, you need to focus on secondary packaging. If you have a country-wide distribution network, map the last-mile challenges and ask for relevant tertiary packaging solutions.
Pro-Tip: Look for an integrated packaging supply chain solutions provider that has a large network of local packaging suppliers across the country. Yoru supply chain managers will get a single point-of-contact and can get turnkey packaging solutions on-demand. Further, you will save big on procurement costs and supplier collaboration efforts.
Challenge 2: Quality and Cost Optimization
Create a list of quality specifications for your packaging SKUs. Map the overall order size and procurement costs. Share your packaging quality and cost requirements with your supplier. Furthermore, seek new ideas to save costs on your packaging from your suppliers.
While optimizing costs, also look at how your total packaging costs impact the unit economics and pricing of your products. Explore ergonomic packaging designs and products that allow you to accommodate more volumes per packaging unit.
Furthermore, give due consideration to the weight of the packaging materials and its direct bearing on the cost, insurance, and freight (CIF) of your supply chain. For instance, corrugated cardboard boxes, paper bags and paper boxes are lightweight and allow supply chain and logistics personnel to add more cargo per packaging unit. Doing so makes the shipping process more cost-effective.
If your enterprise is bound by environmental compliance regulations, ask your packaging suppliers to demonstrate their sustainable packaging offerings along with the corresponding impact on the carbon footprint.
Pro-Tip: Conduct a packaging audit at your plant locations periodically. A packaging audit entails a thorough diagnosis of your packaging supply chain and spend-analysis. You can derive intuitive insights from your data analytics to optimise the quality, costs, and risks in your packaging supply chain. A packaging audit is especially recommended to maintain smooth business continuity throughout the year and peak load seasons like Diwali.
Challenge 3: Warehousing and Inventory Stock-Out
The shortage of warehousing space and inventory stock-out are two pertinent challenges during the festive season. Map your warehouse capacity in advance and ask your supply chain managers to share data on the packaging consumption rates during the peak season. Engage with your packaging suppliers. Seek the details of the expected time of arrival (ETA), lead time and order processing time that they need to deliver any unplanned packaging orders in the face of an inventory stock-out.
Furthermore, opt for local sourcing options this year to steer clear of the risks of supply chain disruptions. Prioritize the location of your packaging solutions suppliers and their access to multimodal transport. Search for a packaging vendor with integrated logistics and supply chain management capabilities across India.
Pro-Tip: Choose an integrated supply chain solutions provider as your packaging partner with a large network of logistics partners and warehouses. If you are a multi-plant manufacturer opt for a captive supplier. A captive supplier is one that will hold your packaging inventories on their account books at your site location. Partnering with a captive supplier will ensure you JIT delivery of all types of packaging units at your site on demand.
Challenge 4: Last-Mile Friction
While last-mile delivery has always been a challenge in the B2B supply chain, this year’s COVID19 pandemic only compounds its magnitude. With social distancing norms in place and customers demanding access to products from the comfort of their homes, you need to reimagine the last-mile of your supply chain journey.
This is especially true for consumer goods, pharmaceuticals, e-commerce, food & beverages, and chemicals because of the limitations of shelf-life and expiration date. Gaining visibility into the last-mile journey is the key to ensuring that your products reach customers fresh, compact, and safe. Opt for cost-effective and smart packaging solutions like RFID tagging. Use digital packaging systems to ramp up your tertiary packaging, track the movement of your products, and reimagine the customer experience.
Pro-Tip: Leverage smart packaging technology to zero down the gaps with your customers. You can map end-user trends, consumption patterns, and purchase volumes. You can also adopt reusable and recyclable packaging by integrating technology with your packaging.
For instance, you can insert a sensor in standard wooden packaging boxes and track their reverse logistics, recycling, and reuse. Doing so, you can reduce both your carbon footprint and packaging costs.
Prepare for the New Normal and New Possibilities in Packaging Supply Chain This Diwali
This year’s Diwali will be different from yesteryears. Prepare your supply chain for the new normal. Ramp up your packaging supply chain in advance and be open to new possibilities during the festive and holiday seasons. Browse Moglix Packaging Solutions and connect with our experts to learn more.
3 Reasons Why Every Multiplant Manufacturing Business Needs a Packaging Audit
3 Reasons Why Every Multiplant Manufacturing Business Needs a Packaging Audit
If you are a manufacturer, your packaging supply chain manager is likely to list three significant packaging challenges.
- How do I reduce packaging costs?
- How do I identify and reduce the in-transit losses of my goods?
- How do I put my enterprise on track for continuous improvement?
If you face any or all of the above challenges, you are looking for a robust and periodic packaging audit program with the following benefits for your enterprise.
Explore the Cost Advantage of a Lean Supply Chain for Packaging
Optimizing the packaging inventory is a significant challenge. Holding high inventories of packaging SKUs can block your enterprise’s working capital. On the other hand, an inventory stock-out can directly affect your distribution and reduce revenue through lost sales. A packaging audit can enable you to rightsize your packaging inventory, unlock working capital, and reduce indirect costs. You can also explore EOQ levels of inventory by using artificial intelligence-enabled analytics and migrate towards a lean supply chain.
Reduce Wastage and Losses in Transit During the Supply Chain Journey
Pilferage, wear and tear, and spoilage during transit can lead to formidable losses to your enterprise. One way to reduce such wastage and losses is to re-engineer packaging as per the logistics lens. A packaging audit can enable you to map the logistical challenges across multiple modes of transportation and choose packaging solutions that provide the best fit for each stage of your supply chain journey.
Continuously Improve Through Total Quality Management in Packaging
The COVID19 pandemic has ushered in a new normal. How do you explore new avenues to stay competitive? Class C spend items like packaging cater to less than 10% of the unit costs of end products but are likely to affect more than 10X of the value of your goods if you get it wrong. A packaging audit can help you to discover the most significant opportunities to enable continuous improvement and total quality management in packaging.
Are you exploring a Packaging Audit for your Manufacturing Plant(s)? Testing and diagnosis are integral to both human and enterprise health. With a packaging audit across your plant locations, you can detect challenges early and adopt remedial measures with agility to reimagine your packaging.
If you feel that your packaging could be improved but don’t know where to start, please get in touch with us here. You can also learn more about our packaging solutions by clicking here.
How Can MSMEs and Regulatory Agencies Phase-Out Plastics from Packaging?
How Can MSMEs and Regulatory Agencies Phase-Out Plastics from Packaging?
Can MSMEs in India reimagine business without plastics? The challenges posed by the use of plastics in packaging calls for a crystal clear identification of the scope of the challenge, analysis of the plastic economy and its environmental impacts. It is also prudent to take a look at India’s current standing and approach towards resolving the challenge posed by plastics in the backdrop of global trends as diverse stakeholder groups including MSMEs and regulatory agencies continue to engage in dialogue and explore opportunities to find a sustainable solution.
MSMEs in India and the Plastic Conundrum: Untangling the Linkages
On June 25, 2019, the Report of the Expert Committee on Micro, Small and Medium Enterprises submitted by the Reserve Bank of India acknowledged the ban on plastics across diverse states as one of the major reasons that had led to a large number of MSMEs becoming non-performing assets (NPAs). The report further took cognizance of the societal and environmental purposes served by such bans but cautioned about “collateral damage’ to the economic health of the MSME sector.
What is the Economic Impact of Plastic Ban on the MSME Sector and Its Customers
Estimates assert that are 50,000 plastic manufacturing units in India with an overwhelming 90% of these being MSMEs. MSMEs that are engaged in the production and distribution of plastic materials employ 3-4 lakh people while catering to the requirements of a wide diversity of industries including FMCG, FMCD, automotive and infrastructure among others. A major driver of the demand for plastics in these industry verticals is packaging.
Why is Plastic So Important to these Industry Verticals for Packaging?
The heavy reliance of diverse industry verticals on plastics for packaging is not limited to the Indian economy per se. First, data published in a World Economic Forum study suggests that globally packaging is one of the largest drivers of demand for plastics. 
Table 1: Re-usage Rates by Materials Comparative Analysis
Second, plastic is the preferred material for industries in the modern economy. Ever since the production of the first synthetic plastic in 1907, Bakelite, global plastic production has been on the rise. In the last 65 years, the annual production of plastics has increased nearly 200-fold to 381 million tonnes. This is estimated to be equivalent to the mass of two-thirds of the world population. Two of the major reasons behind the surge in demand for plastic are reuse and recycling. Plastic can be reused and recycled, albeit a limited number of times.
Table 2: Y-o-Y Growth in Plastic Production 1950-2015
Third, plastics are derived from petroleum refining and therefore indexing the cost of plastic production to crude oil prices. Given the markup pricing that is used to determine the costs of plastic, the softening of crude oil price in the last five years owing to large volumes of shale oil production has provided a comfortable cushion to plastic manufacturers and further enabled them to pass on the benefits to diverse industry verticals, where plastic is in demand.
Why Does Single-Use Plastic in Packaging Pose a Challenge in the Indian Scenario?
India generates close to 26,000 tonnes of plastic waste every day. It is estimated that single-use plastic constitutes 43% of the quantum of plastic that goes into packaging. Single-use plastic by implicit meaning is used only once before being disposed of. However, a crystal clear definition of single-use plastic is yet to see daylight. A committee under the Ministry of Environment, Forest and Climate Change is working on finalizing an unambiguous definition of single-use plastic. The remaining 60% of all plastic is recycled in informal and unstructured plastic manufacturing MSMEs that produce very low-quality recycled plastic. Recycled plastic can be mixed with virgin material to produce high-grade plastic products.
How MSMEs and Regulatory Agencies Can Collaborate to Phase-Out Plastics from Packaging?
Data published by the World Bank asserts that India generates plastic waste in the range of 2.5 million to 5 million tonnes. In view of the current proportions of the challenge that India is faced with, it makes enormous good sense to suggest that MSMEs need to engage with regulatory agencies through a time-bound and outcome-based framework. Given that India has a consumption-driven economy, it shall be great to opt for a gradualist approach to enable MSMEs a cushion to absorb the economic impacts. A corporate income tax holiday to businesses offering sustainable packaging solutions can enable holistic ecosystem-wide reform by reducing the cost burden and further allowing such businesses to pass-on the benefit downstream.
How Moglix Business is Partnering with Customers to Offer Sustainable Packaging Solutions?
At Moglix Business, we are collaborating with our customers from a diverse cross-section of industry verticals to enable a seamless transition from single-use plastic packaging materials to sustainable packaging materials that are economically viable. We offer a complete suite of packaging solutions that includes primary, secondary and tertiary packaging. As a responsible business, we take cognizance of the need to be cost-efficient and set quality standards and to allow our customers to hit the ground running. As such, our packaging solutions are aimed at reducing the cost impact of the transition from 300% to 2.5%, thus allowing for the eventual phasing-out of plastics from packaging.
