Articles by Day: June 28, 2022
Packaging supplies continue to be in high demand despite limited availability, with shortages expected to continue through to at least the end of this year. Our Cleveland 3PL providers are advising the best way to avoid major problems on this front is to forecast, plan, and order materials at least six months out.
Basically, if you’re expecting higher demand and product shipping around the holidays, the time to start ordering those packaging materials now and arranging for their storage.
Packaging materials include things like boxes, foam inserts, poly bags, adhesive tape, anti-static sheets, labels – all the items that ensure items are safe, protected, and clean. While packaging tends to be something of an afterthought for consumers, smart businesses recognize that the right packaging is mission critical. Improper packaging can lead to breakage, spoiling, rusting, leaking – or the product never even making it to its destination. All of this not only hurts the company’s bottom line, but also its reputation.
One analysis by Smithers revealed that in a single recent year, global spending on packaging supplies was more than $917 billion. Demand was expected to increase nearly 3 percent, crossing the $1 trillion threshold, by 2024. But that was before the pandemic, when e-commerce demand exploded.
Compounding matters is that the packaging materials industry hasn’t been immune to the seismic supply chain disruptions of recent years. Not only the pandemic, but extreme weather and a greater demand for sustainable materials has but a lot of pressure on suppliers.
Senior supply chain analysts with Gartner anticipate packaging supply is going to remind a challenge for companies through the 2022 holiday season. Lead time on packaging supply orders that used to take four to six weeks is now more like six months. Things like labels previously had lead times of somewhere around four to six weeks, but are now closer to three-to-four months.
Cleveland 3PL Can Help by Establishing Supply Chain Resilience
In addition to forecasting the need for packaging materials well in advance of expected demand surges (months instead of weeks in advance), companies might also consider working with a third-party logistics company.
There are numerous benefits to working with our Cleveland 3PL, but one that can make a huge difference on this front is helping to establish supply chain resilience.
Our services include not only warehousing and trucking, but packing, labeling, and kitting. We have close connections with suppliers of all kinds of packaging materials, and can work with customers to find alternative solutions when their original packing plans are jeopardized or uncertain.
Throughout the pandemic, there’s been a rush on paper product packaging – primarily folding boxes, corrugated boxes, and non-corrugated boxes. We may see this start to ease a bit as supply begins to finally catch up with the demand, but that might not be for another six months or so, which means companies need to think outside the box (literally).
We can help customers explore alternative packaging methods. That could mean sacrificing certain aspects that are the ideal (glossy coatings, colorful graphics, etc.), but less complicated and therefore more realistic for vendors to turn around by the deadline. As long as the package keeps the product clean, safe, and protected while it works its way to its final destination, that may need to take priority over certain custom aesthetics.
We work to help our clients formulate supply chain segmentation strategies. These involve optimizing certain processes for different needs/outcomes to serve customer bases that are diverse and/or growing.
For instance, the same product may be sold both in retail stores and online. Customers may be buying the same thing, but they have different needs when buying in the store than purchasing online. You might break up the inventory for those two segments and store – and package – them differently. Items sold in stores may require less packaging than those sold online.
Packaging needs can be segmented by material type, end-use markets, and regional markets. Efficient supply chain segmentation strategies can help reinforce your supply chain resilience, allowing you to be better prepared for challenges – whether that’s the expected (like an ongoing packaging shortage) or other hurdles not yet forecasted.
For information on 3PL Warehousing and Inventory Management Services in Cleveland, Contact On Time Delivery & Warehouse by calling (440) 826-4630 or send us an email.
How to find packaging materials in a ‘perfect storm’ of supply chain issues, June 16, 2022, By Jen A. Miller, Supply Chain Dive
More Blog Entries:
Benefits of Outsourcing Cleveland Inventory Management, May 27, 2022, Cleveland 3PL Blog