Like everyone else working in the supply chain, packaging companies are finding it increasingly necessary to change with the times, and those changes will inevitably impact warehouse and transportation providers.
Many of the changes taking place were laid out in the recent research report, “Unpackaging Reality,” recently released by R.R. Donnelley & Sons Co., a worldwide provider of marketing and business communications products and support services.
“Material availability disruptions, labor shortages, and transportation challenges will impact supply chain timelines for the foreseeable future,” predicts Lisa Pruett, president of RRD Packaging Solutions.
“Know that advance notice is a powerful tool. A greater focus on forecasting, contingency plans, early order placement and acceptance of longer lead-times, these are all things that can help ensure availability and protect against those late-in-the-game disruptions.”
To obtain its insights, RRD surveyed 300 U.S.-based, mid- to senior-level procurement, brand marketing, and packaging engineering professionals across a variety of industries.
Like most business functions, packaging decisions are being made in a quickly evolving market, the survey found. Virtually all respondents — 96% — agreed that overall operations (such as budgets, timelines and sourcing) have been impacted by supply chain disruptions and inflation.
The results of this survey demonstrate how these changing dynamics have influenced product packaging, ranging from the development of reprioritized materials to forging new supplier management strategies designed to meet online consumer needs.
“Market disruptions don’t discriminate – you’re not alone in making tough decisions and changes to your packaging strategy,” according to the report.
Supply chain disruptions are said to raise concerns almost evenly spread across key functional areas of packaging. Product-related concerns were at the top of the list for 34% of respondents, packaging material-related concerns for 41%, and transportation-related concerns for 25%.
“With material delays happening in virtually every industry, we’re working with more and more companies who have embraced a substrate-agnostic approach,” offers Brian Techter, senior vice president of RRD Packaging Solutions
“This translates to improved availability for a wider variety of materials, which allows us to look at alternative stocks and production methods without losing momentum.”
Among the survey respondents, 65% say they have missed deadlines due to supply chain disruptions. 86% report increased timelines for a typical project. 41% say projects took up to four weeks longer than usual, another 31% reveal projects took up to three months longer than usual.
Material price hikes and supply shortages have presented the largest challenge over the past year, with 52% of respondents strongly impacted by material price increases, 46% by supply shortages, 37% by staffing challenges and 36% were equally strongly impacted by increasing demand and speed to market requirements.
“Gaining production efficiencies in the face of today’s volatile market isn’t impossible,” asserted Joe Schewe, RRD Packaging Solutions’ director of structural packaging design & engineering.
“Structural engineering can uncover several opportunities, including designs that reduce a package’s footprint. The use of less material — or alternative, more-readily available options — also helps introduce new freight and storage savings.”
Impact of Ecommerce
Ecommerce has increased over the past one to two years for over half (57%) of respondents. Of that group, 92% have seen their increases in packaging needs due to the growth of online orders.
This growth in ecommerce created an ongoing need for increased inventory, additional warehouse space, material substitutions and more staff.
Almost all (94%) of those surveyed agree that sustainability is a key consideration in packaging and label decisions. In addition, 66% of respondents said they have shifted to more sustainable packaging than what was used previously.
The RRD researchers found it interesting that 55% of respondents claim that recent supply chain disruptions moved their companies closer to their carbon emissions goals compared to further away.
Brands continue to use less material and are turning to recycled materials – both of which are helping them move toward more sustainable packaging,” explains Pruett.
“Due to limited supply of virgin fiber, now is an excellent time to conduct a structural design engineering review. We often see this due diligence translates into material usage savings through the use of lighter weight paperboard materials as well as a smaller packaging footprint.”
There was a broad willingness to pivot to different packaging materials in light of recent industry challenges – more than one third (36%) claim they are extremely willing to do so.
In addition, a majority of the organizations (81%) revealed that they did make changes to packaging design over the past one to two years.
These challenges have forced organizations to reprioritize packaging materials (68%), reprioritize budget (52%), reprioritize packaging design and aesthetics (49%), and sustainability goals (45%).
Nine out of 10 respondents indicate that recent disruptions to the global supply chain have caused their organizations to change how packaging is sourced; including 62% that have moved to greater diversification of suppliers.
Another 42% say they have outsourced manufacturing and/or fulfillment; 39% consolidated with fewer suppliers; 30% substituted specs; and 26% have chosen to reshore manufacturing processes to the United States from overseas.
These pressures also have spurred these companies to speed up their decision-making processes. Over the past one to two years, the majority of packaging decision-makers say they changed to planning ahead more by two to four weeks.
Only 13% of respondents report that they made no change in buying periods, while 19% say they currently are planning ahead by one to two weeks, and 33% add they are planning ahead by no more than two to four weeks.
On the other hand, 21% say they are planning ahead by one to three months, 12% plan ahead by three to six months, and 3% by 6-12 months or more.
A total of 78% agree that the top source of guidance or information used in planning comes from suppliers/vendors or direct manufacturers.
Following those are industry associations and publications at 44%; consultants at 36%; industry events and trade shows at 35%, and brokers and agencies at 26%.
