The Packaging Issue: Packaging takes center stage

This month in Modern, we fix the spotlight on packaging, a topic that’s now clearly top of mind for savvy materials handling professionals working in the evolving retail sector—and rightfully so.

The surging volume of smaller, more frequent orders that need to be filled due to the nature of e-commerce continues to increase distribution complexity and is pushing companies to leverage highly responsive materials handling systems to meet the demands of an ever-fickle consumer.

And while many e-tailers have re-engineered their businesses around these automated systems, they now find themselves searching for just the right packaging solutions to not only speed up the process, but to cut freight costs and maintain an environmentally sound position in the market.

The terrific case study that Modern recently ran on Staples’ continued order-fulfillment transformation summed up the state of packaging in e-commerce almost perfectly. Its highly automated supply chain process allows the second-largest e-tailer to now ship millions of orders to customers with the guarantee that any order placed before 5 p.m. will be delivered the next day to 98% of the U.S. population from its network of state-of-the-art fulfillment centers.

However, the Staples supply chain team found that not even the most sophisticated fulfillment process could solve their customers top complaint: excessive packaging. Based on this feedback, the company created a self-imposed goal of a 20% reduction in packaging by 2020 and then set out to find a solution.

In January 2012, the retailer launched its “smart-size packaging program” and deployed a system-wide rollout of a transformational new technology known as “on-demand packaging.” The technology allows Staples to automatically create a custom-sized carton specific for every less-than-full-case order it ships.

Today, these types of orders—also known as break-pack orders—account for approximately 40% of Staples’ order volume.

“It’s a remarkable change,” says contributing editor Maida Napolitano, who wrote the article. “Staples has reduced costs, they’ve given customers what they want, and it’s a positive, environmental story.”

This month, associate editor Josh Bond takes Modern readers deeper into the packaging challenge in his two-part article that first explores the technology that is helping companies to ensure speed and damage-free movement within automated systems, and then offers a snapshot of the automation that’s improving traditional packaging processes.

“Packaging is not simply about keeping up with throughput,” says Bond. “As the last touch point between a merchant and consumer, packaging speaks for the entire organization. Changes in packaging might improve the speed, efficiency and cost of fulfillment, but all those gains are lost if it negatively impacts customer satisfaction.”

And, if there’s any doubt of the importance that’s now being placed on packaging, look no further than the numbers being reported in regards to this month’s Pack Expo Las Vegas (Sept. 23-25).

According to PMMI, the association that produces the show, 1,750 packaging solutions providers (up 15% from 2011) will occupy more than 700,000 square feet of exhibit space. The association says this will be the largest event since the show opened in 1995.