Packaging though an integral part of logistics also affects marketing and production function. Packaging helps in promoting the goods and informing the customer. As production employees often package the goods, the size, shape and the material of the package greatly affects production’s labor efficiency. Packaging greatly influences the entire logistics system. The size, shape and type of packaging material influence the type and amount of material handling equipment as well as how goods are to be stored in the warehouse. Likewise, package size and shape affect transportation in loading, unloading, and transporting a product. Material handling efficiency is strongly influenced by packaging.



Functions of Packaging

The functions of Packaging are as follows:


  1. Protection: It helps in the protection of materials and goods in the logistics process. This protection is from damage, theft, contamination and environment. It is generally not economical to provide absolute protection to the product from all possibilities. Hence a balance should be maintained between cost of packaging and providing adequate. protection. High cost and delicate goods require a high amount of packaging to avoid spoilage of goods. Therefore we normally see that the packaging in consumer durables such as television, computers are much higher as compared to packaging in soaps.
  2. Utility: It facilitates other logistics functions such as transportation’, storage and handling. Because of packaging and the concept of unit load. master cartons, pallets, containers, other functions of logistics such as transportation storage and handling becomes much easier and usually reduces the overall cost of logistics.
  3. Communication: Packaging, enables product identification and tracking, and displays product care information. With newer technologies coming in such as bar code scanners has helped in improving capabilities in product identification and tracking. Product identification and tracking helps in receiving, order picking and to improve the overall efficiency of the logistics process.
  4. Sale: Packaging also helps in improving the appeal of the product to the customer thus resulting in higher sales.


Packaging Design

While designing the packaging, the following considerations need to be looked into:

  1. The type of product that is to be packaged. If the product is delicate, it may require more packaging in order to protect the product from damage.
  2. The cost of the product. If the product is costly then it makes economical sense to protect the product with a higher amount of packaging so that the goods are not damaged.
  3. The amount of handling the product has to go through. If there is a lot of handling is to be done then the product should be packaged properly for protection.
  4. Packaging should be such that it should facilitate handling.
  5. Its ability to be reused. Sometimes packaging could be costly. In order to reduce cost per unit the package designed such that it can be reused. Example, soft drinks served in bottles, where bottle are reused many times over so that the cost of packaging (bottle) per unit of soft drink is low. Another example is that of containers which are reused.
  6. Its ability to be disposed. Once the use of packaging is over it should be disposed. There should be no problems while disposing the package. Therefore a lot of consumer durables are packaged in cardboard containers, which could be easily be disposed after its use.
  7. Its effect on environment. Care should be taken that packaging material should riot harm the environment. The environmental impact of using plastics and wood as packaging material should be looked into.


Palletization / Unitization

In palletization / unitization, the master cartons are accumulated and stacked to form a single larger unit. Palletization helps in handling, transportation, storing, loading, unloading, loss and damage. This helps to save money and improve productivity. Although the advantages of pallets are many, there are three major disadvantages:

  • Lack of standard pallet size: Pallets come in variety of shapes and sizes. This may cause problems in loading, unloading and packing.
  • Once the pallet is empty, it needs to be stored, which takes up some space that could be used for storing other products.
  • Costs of pallets are high. As it is used to store master cartons, it should be of sturdy material, which increases cost.


Pallets could be made of rigid containers where the product is completely enclosed or it could be non rigid, where the products are not completely enclosed.


Types of Packaging

Packaging is classified into two types :

  • Consumer oriented packaging in which packaging is designed for consumer convenience and appeal, marketing consideration and display.
  • Logistic oriented industrial packaging focuses on the handling convenience and protection during transportation, material handling and storage.


Industrial packaging is performed in four stages.

  1. First stage is packaging the product itself. For example, soft drinks are packaged in cans.
  2. Second stage is called Master cartons. In this case the packaged products are packed in larger cartons so that it can help in quantity handling.
  3. The third stage is that of formation of unit load. Here the master cartons are consolidated into a single, large unit to facilitate handling, transportation, protection and storage. This process may involve palletization, where the master cartons are mounted onto a standard size rigid platform.
  4. The fourth stage is called containerization. Here the unit loads are placed in rigid containers for protection and handling facilitation. Containerization helps in improving the efficiency in transportation, transfer across vehicles, and safeguarding from theft.


Examples of Packaging in industries


Cadbury, India, after the big problem of infested chocolates few months back has now imported machinery for auto-wrapping and put in place a new packaging system designed to keep infestation at bay. Armed with a new, air-tight packaging that is now exclusive to only Cadbury products in India and a system that trains its retailers and sales people on proper storage and handling of the product.

The company has spent over Rs.8 crore in importing auto-wrappers for the new packaging, introduced new foil and poly-laminated packaging.


Packaging at HP

Usinq Molded Cushions packaging for computers

HP’s system of packaging PCs uses molded foam cushions with built-in accessory trays to protect products during shipment and to conserve natural resources. This development reduced the number of packaging components from four to three; reduced the weight of packaging material by 15%, and the cost of packaging material by approximately 28%; and increased the ‘ number of PCs shipped per pallet by ‘133%, ultimately conserving fuel energy and reducing vehicle emissions.


Reducing unused space in product packaging

Using a new packaging system that utilizes high-density polyethylene for some of the digital camera models worldwide, HP reduced unused space inside the camera package by 25%, thereby increasing the quantity shipped per pallet by 50% while decreasing packaging materials use by half. As a result, in 2004 HP saved an estimated $1 million in packaging cost while reducing transportation impacts. Bulk pack system reduces material use


Bulk pack system reduces material use

In 2004, HP developed new bulk packaging systems for their scanner sub-assembly units, reducing packaging and providing significant cost savings. They redesigned their corrugated cardboard packaging globally to allow the layer at the top of each unit to secure and protect the unit stacked above it. In 2004, this improvement reduced the amount of packaging material used to ship HP scanners by 40 tonnes.


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