Pretty Is as Pretty Does?

December 17, 2012
11:57 am

It is pretty on the shelf, but it can be a problem for the sustainable supply chain. In fact, unsuspecting consumers would never guess at the issues that the package on the shelf represents for the sustainable supply chain.
The package in consumer products is designed to market the product. The package is designed, redesigned and tweaked over and over again throughout the launch process. So much so, that you would think companies are getting it right; but, there are inherent problems. The package and the process of package development is a major source of corporate waste. While companies may have zero waste as a goal, the reduction of waste in packaging artwork management is a stumbling block. It is an area, based on recent research, where we find companies are going backwards not forwards. Here we share the results.
While the development of a package sounds simple, it is not. It is a major supply chain constraint, and the source of many product recalls. In 2012, 61% of consumer products companies want to improve packaging artwork management as a key initiative for global sustainability. This is both the minimization of packaging waste and the improvement in packaging materials to improve sustainability. Interest is increasing. It has roughly doubled in the last five years. To compare, in 2009, shortly after the release of the Wal-Mart scorecards, in a similar study, it was 39%.
While increasing in importance, companies are treading water on performance. Despite a twofold increase in the deployment of Product Life-cycle Management (PLM) over the past five years, many organizations are going backwards not forwards. Artwork approval time has increased by 30% and over 20% of product recalls are due to packaging artwork problems. The root issue is complexity. The second issue is market discipline. The third issue is regional/global governance. All are increasing in importance. Within the organization, the number of items has grown by 25% and the management of packaging in global networks is challenging. The answer has not been technology; despite the increase in the deployment of PLM, the amount of product recalled and destroyed due to packaging issues continues to rise.
So, what should a company do? Organizations have the best results when they:

Focus on Fundamentals. The process is very cross-functional To drive success have a clear process for understanding global requirements and governance for data fields in global roll-outs. This tight governance process needs to be carefully managed by an artwork steward in either the marketing department or the product development team. Product marketing teams often turn over quickly, so there needs to be training and alignment on packaging artwork management and global sustainability initiatives to make the reduction of waste an ongoing reality.
Manage it as a Network. The processes need to be mapped outside-in, and managed as a horizontal cross-functional process. While many companies source suppliers based on cost, sourcing artwork management suppliers should be sourced based on capabilities. Today, only 35% of the development process is managed internally. The design and management of packaging and artwork is spread across a complex network of designers and suppliers. To reduce waste, suppliers should be selected based on proven collaborative capabilities and software integration.
Measure and Track Progress Cross-functionally. Packaging artwork and the associated waste is a dirty job. In many enterprises, over 150 people touch the process and the littlest mistake can result in costly recalls. Training and process discipline is key. It is only when it is consistently measured and tracked that cross-functional alignment against the goal can happen.

So, the next time that you pick up a package, give it a bit more respect. Consider that it is the product of months of cross-functional reviews and approvals by scores of people. And, that when companies make the approval process a priority that they make a huge step forward in reducing supply chain waste, improving time to market, and delivering on the brand promise. To read more on this topic, check out our report on slideshare. What are your thoughts? We look forward to hearing from you!

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I think the analogy applies to today’s supply chains.

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Ten years ago, I started writing a book titled Stories of the Misguided Gold Diggers. The book was a collection of stories from two decades of stories of technology leaders perpetuating the myth of integrated end-to-end supply chain planning.

I dusted off the manuscript on Saturday. I think that we have a new chapter. Companies focused on putting Artificial Intelligence (AI) on top of existing architectures are putting AI Stupid on steroids.

Supply Chain Shaman