Supply Chain Collaborator? Plead Guilty

If you haven’t seen the “Global Supply Chain Benchmark Report” from Aberdeen Group, I recommend you get hold of a copy. It’s addressed to companies interested in improving their global supply chains, and it makes recommendations for doing so. The reason packaging suppliers should care about this report is because they play a part in one of the report’s recommended actions for best-in-class companies.

The report says most companies are “woefully inadequate in their automation and staff support for global trade.” One way to alleviate this problem is by improving collaboration with supply chain partners. “Companies that still operate via arm’s-length transactions with serial processes between their trading partners are at a growing disadvantage in process speed, reliability and agility,” the report continues.

The top processes for collaboration are visibility/alert management and resolution (57 percent of respondents); sales and operations planning (31 percent); transportation management (30 percent); forecasting (29 percent); and replenishment planning (25 percent). In total, 91 percent of respondents are doing some form of business-to-business collaboration today.

But here’s where you packaging partners fit in this picture, and could take advantage of a significant opportunity. According to the report, only 13 percent reported collaborating on product and package design. The report adds “…but this can drive significant savings for companies.”

How? Some high-tech companies are finding it is more cost effective to strengthen some of their products so they can have smaller, lighter-weight packaging, thus fitting more pieces into a container load for overseas shipping and decreasing transportation costs. That puts the onus on you to help them figure out how low they can go in their packaging specs before their more robust products get busted.

Of those companies that do collaborate, Aberdeen says 59 percent report that collaborative product and packaging design results in improved cycle times and improved process reliability.

These are important findings to cite in your next conversation with customers and potential customers. They’re also good ways to showcase your collaborative design capabilities, including your online tools. If you don’t have such tools, it might be a good time to think about developing them.

Third party logistics service providers are, and more and more of them see packaging suppliers as potential partners in helping them serve customers. Take Kuehne + Nagel, for example. This 3PL based in the Netherlands counts Unilever among its bigger clients. Tim Beckmann, distribution manager for K+N, tells me that part of his company’s close relationship with Unilever calls for giving them feedback about the materials they use.

“The choice of packaging materials can either help or hurt a supply chain,” he says. “It was important for Unilever to understand why the new box shapes its product developers were designing might be eye-catching, but they could also cause a catch in our distribution center’s product flow. Something like that is a potential bomb to an innovation project.”

Beckmann believes it’s important for packaging experts like you to have input to material handling projects throughout the supply chains carrying their boxes, both at customer sites and in 3PL distribution centers.

“We, as a third party logistics provider, have customers in common with your readers,” he concludes.

There’s an important take-away from both the Aberdeen report and Tim Beckmann’s input: Study your customer’s supply chain challenges and be the first to help these companies understand them. This will set you apart as a supply chain collaborator, not just a box pusher.

For more information on the “Global Supply Chain Benchmark Report,” visit www.aberdeen.com.