By Stephen McIndoe, VP Consulting, Be4ward
In my previous article, I discussed the next four tips on managing packaging complexity. In this next article, I look at tips 9 through 12. The first two continue on the theme of how to control non added-value complexity, and the second two start the theme of how to cope with added-value complexity.
9. Share components or packs
Are you maximizing the opportunities to share components or finished packs?
Shared components and packs can provide a great opportunity to increase component and pack volumes. However, to make this happen, it is necessary to identify markets and products that can successfully share components or packs. There are a number of criteria that you should consider when looking to group markets for sharing. These include geography, languages, regulatory rules, regulatory approval timelines, and sale price.
Choosing markets to share products needs to be considered carefully as it requires close collaboration between those markets when changes are being implemented. Therefore, it is better to have consistent groupings of markets rather than vary the sharing groups by different product. Standard market groupings also simplify the “where used” assessment during the change impact assessment.
A significant challenge with shared packs comes when there are different approval timelines or locally driven changes. This can result in more than one version of the shared pack being required, effectively driving you back to market specific packs.
10. Bundle changes
Are you maximizing the opportunities to combine changes to minimize the frequency of changes to components?
The concept of “bundling changes” is the grouping of multiple different changes affecting the same pack or component together to change the pack only once. An analogy that many of us are familiar with is that of road repairs. How often does the water company dig the road up one week, for the gas company to come and dig it up again a week later? The purpose of bundling changes is to minimize the frequency of change to components by coordinating changes together.
To be able to do this, you need to have an understanding of all of the parts of the organization where changes can be triggered from and a single shared forecast of required pack changes for each product. This is often maintained by the product strategy team, giving visibility of who wants to change what and when.
It is also necessary to understand which changes have mandatory timelines and which changes have latitude in timing so that they can be combined. One of the biggest challenges in managing bundled changes is keeping dependencies aligned, particularly if some of the deliverables are outside of your control. To assess how well you are managing bundle changes, measure the frequency of change for each brand, country, SKU, and component type in order to look for opportunities to improve.
11. Plan for runners, repeaters, and strangers
Do you have capability to supply product with different order and volume profiles, i.e. runners, repeaters, and strangers?
Products can be classified into three groupings:
The concept of runners, repeaters, and strangers provides an excellent method for production scheduling and supply chain management. Runners typically provide the bulk of the stable packaging volume permitting high line run times and often dedicated equipment. Repeaters don’t justify dedicated equipment but occur frequently enough to allow scheduling with runners and still packaged in reasonable batch sizes. Strangers present a greater challenge as their infrequent nature and small overall volume make them challenging to build into the production schedule, produce in economic batch sizes, and manage component supplies.
Supply sites will normally have to produce products for all three groupings, and increasingly, an individual brand can have all three types of product. It is therefore necessary to have the capability to schedule and pack all three. The application of many of the techniques in this booklet to minimize variation, increase pack or component sharing, or introduce postponement or late customization techniques can assist in managing the disruption created.
12. Manage order quantities of components and finished packs
Do you have processes to effectively manage order quantities of components and finished packs?
Considering the previous tip on runners, repeaters, and strangers, it is important to consider how volumes of components and finished products are managed through the supply chain. Packaging operations are under high degrees of pressure to maximize efficiency. Where high volume runner products are present, it is easy to produce in economic batch sizes and purchase commercially advantageous volumes of components.
However with stranger products, the preferred packaging batch sizes can often result in high levels of inventory of finished packs, which are at risk of obsolescence through shelf life expiry. Often this results in repackaging activity to move product from one market to another prior to expiry. In addition, the economic order quantities of packaging components can often result in high stock levels of components that have to be written off when a pack change is required.
It is therefore important to manage two dynamics to minimise the risk of obsolescence:
In my next article, I will discuss an additional four tips to cope with added-value complexity.
Other articles in this series: