3PL, warehouse fulfillment, packaging sustainable packgaging

Benefits of Eco-Conscious, Sustainable Packaging

As your business grows, so do your packaging requirements. More the products sell, the more packaging material is used. This gives you an opportunity to use your packaging wisely to your advantage as well as your consumer’s. A third very important view would be using your packaging for the benefit of the whole world. After it has served its purpose, which is, deliver the product to the customer, Packaging of a product generally becomes waste. As a responsible citizen of the word, everyone including your business should be looking to reduce waste. If you are not already, you should be looking for sustainable packaging solutions. They be called environmental friendly, Eco-friendly or sustainable packaging, but the basic principle is same, that is to reduce the consumption of resources used for packaging the product. PricewaterhouseCoopers conducted a study to understand the impact of sustainable packaging on the industry. Detailed report can be read here. As per the report, the pressure for sustainable packaging will continue to increase on the industry. There will be regulations that the industry will need to follow to ensure sustainability. The industry also needs to be more proactive to define what makes a packaging sustainable and how the sustainability should be measured.

 

So, what is sustainable packaging?

While there is no single definition or description that is accepted globally, sustainablepackaging.org has tried to describe what constitutes sustainable packaging. The key elements of sustainable packaging are

 

  • It is safe & healthy.
  • It meets market criteria for performance and cost.
  • It optimizes the use of renewable or recycled source materials and uses renewable energy.
  • It is physically designed to optimize materials and energy required for manufacturing the packaging.
  • It is effectively recovered and utilized in biological and/or industrial closed loop cycles.

 

Sustainable packaging is not only socially desirable but has business advantage as well. Let’s look at some of the benefits of adopting sustainable packaging.

 

Marketing Advantage/Reputation Boost. This is the one that has direct impact on your top line. Businesses that use environmental friendly practices generally have more favourable image in the market place. Increasing number of consumers are becoming environmentally conscious. When a brand makes an investment in environment friendly practices, it not only boosts its image amongst existing customers, but also gains new customers who are concerned about the environment. When customers, see a firm making a firm commitment to the environment, they want to support that brand. Most of the environment conscious consumers are very active on social media and social media, today, is a very important marketing platform. Imagine the kind of free advertising that you will get when these people talk about your brand. Moreover, many NGOs and Government agencies publish list of preferred companies or highlight the companies that have demonstrated the commitment to sustainability. The consumer activists are always looking at these sources and share their leanings on social media. Moreover, the newer sustainable materials increase the shelf life of many products, keeping them fresh for longer. (think cling film for vegetables) Many customers feel less guilty throwing away the packaging as it is now sustainable and doesn’t contribute to pollution (at least not to a very high extend).

 

Reduced resource consumption. Increasingly the companies that use recycled or sustainable options for packaging are discovering that it also comes with an added cost advantage. It is one of the known facts that sustainable packaging focuses on recycled material which leads to reduced consumption of precious, non-renewable resources. Redesigning the packaging to use lesser material and more compact shape helps in further reducing the use of that material. The key objective here is to reduce overall resource consumption, by reducing the amount of packaging used and reducing the energy used to produce them. Compact shapes translate into lesser space used for transporting, translating into more products being transported for same space and thus reducing the fuel or transportation cost. Given these facts, the investors and analysts have started loving the sustainable packaging options.

 

Reduced Storage. As discussed when using sustainable packaging, one the key objective is to reduce the amount of packaging used. Smaller packaging means reduced storage requirements leading to smaller bins and smaller warehousing requirement. This leads to savings in logistics not only for the supplier but also for the consumer. (Consumers need smaller space in their homes to store the product). Subsequently, the sustainability also helps by increasing warehouse productivity and reduces labour costs. Sustainable packaging also helps in disposing off the empty packaging/packaging. Smaller packaging is always easier to dispose and not to forget, it is easily processed (being sustainable). This reduces the overall disposal cost of packaging material.

 

Corporate Social Responsibility (CSR). Today, every business is required to do CSR activities. Be it reduced energy consumption in terms of heating, cooling or electricity, water, paper and other resources. Sustainable packaging furthers that cause and can be used to present the company as socially responsible one. You help reduce the carbon footprint of not only your company, but also that of your customers, your logistics providers and society at large.

 

Thus, sustainable packaging is a must that companies need to focus on; both for environment and their own benefit.

3PL, sungistix, warehouse, copacking,packaging

What are various 3PL (Third Party Logistics) Services

Many companies are still not comfortable with the idea of outsourcing their logistics operations as they are still unsure of what exactly does a Third-Party Logistics (3PL) mean and what value do they provide. In all fairness, the 3PL companies don’t make it any easier either. There are so many 3PL providers with so much breadth and variety of service, that a new client is often confused on how to categorize and compare these various players. Let us try and understand what is a 3PL player and what kinds of 3PL players are there in the market.

 

Who is a Third-Party Logistics Provider? There is no one definition of third party logistics or 3PL as it is more colloquially called, that is applicable all around. Let’s take a quick look to understand the evolution of 3PL, so that one can understand from the context. Earlier, in around 70’s there were only trucking companies. The shipper provided and loaded the final packaged material to the transporter, who then transported to the destination. Then came the IMCs. These Intermodal Marketing Companies, plugged between the shipper and the carrier. They accepted the package from the shipper and managed all the retail transportation engagement. Going forward these companies started offering other value added services such as warehouse storage, Packaging, financial needs and other services. The key to understand there is that these companies only provide services to the shipper and value for shipping company in terms of handling their logistics requirement, at any point, in their supply chain. Today the council of supply chain management professionals defines 3PL as outsourcing all or much of a company’s logistics operations to a specialized company. A Federal legislation passed in 2008 legally defines a 3PL as “a person who solely receives, holds, or otherwise transports a consumer product in the ordinary course of business but who does not take title to the product.” Thus, we can assume that any company that provides a logistics service in any supply chain, can be called a 3PL company. A transporter, a warehouse space provider, a special storage provider, a packaging service provider, a booking, tracking, auditing based or financial based service provider, or information service provider for these services, or provider of any combination of these services can be termed as a third-party logistics service provider or 3PL provider.

 

Now that we understand what is a 3PL provider is, let’s look at various kinds of 3PL providers.

 

Transportation based: Here the primary service offered is transportation. Trucking in various segments, from wholesale to retail to individual deliveries. They own the physical transportation machines, specialized transportation vehicles (cold storage trucks) and networks and system specialized for fleet utilization and route optimization. Their aim is to optimize the transportation cost (as opposed to other kinds of costs in logistics). They usually club various shipments based on transportation cost optimization. While these companies may offer other services such as warehouse, they are typically in association with a partner who provides those services.

 

Warehouse Based: These companies own the storage space at the distribution points. They specialize in warehouse operations. They make significant investments in warehouse space, warehouse technologies (cranes, lifts), automation to quickly move the products inside warehouse, specialized warehouse needs such as cold storage and hazardous chemicals etc. They have their operations specialized for optimum use of space and their systems optimized for movement of inventory such as FIFO, maintaining minimum and maximum levels of inventory, close monitoring of expiry sensitive inventory such as food products. Apart from inside warehouse operation, they also specialize in locations of warehouse, at critical nodal points such as important ports, or close to big markets. Large players usually operate multiple warehouses spread geographically at important points, having these warehouses interconnected with dedicated transportation. The warehouse based providers usually tie-up with Transporters to provide the last mile delivery to the customer. They will usually have tie ups with various transporters to cater to different needs of the customers.

 

Freight Forwarder: These companies do not own any physical asset. They tie up with various other logistics service providers, manage the relationships and operation between them, for their clients and give their clients an end to end logistics service. To elaborate a little more Freight forwarders, specialize in arranging the storage and shipping of merchandize on behalf of the shippers. They usually provide a full range of service such as inward transportation tracking, documentation preparation, warehousing, cargo space booking, freight charges negotiations, insurance and claiming insurance claims. Freight forwarders are especially useful if you are planning to operate in international markets. i.e. Your business involves import and export of material or finished products.

 

Financial based Logistics services provider: These companies specialize in the financial aspects of the logistics. They provide freight payment and audit service along with accounting, control and tool for monitoring and management of inventory. They also provide small financial solutions for logistics (getting the LOC for freight loading or unloading)

 

While many companies provide these individual services, quite a few also provide various combinations or all of these services. It is up to the client to decide, which one is best suitable for his business requirements. Clients also need to keep in mind the that players not only differ in the kind of service, but level of partnership the 3PL firms provide. This depends on the nature of engagement that exists between the business and it’s 3PL provider.

  • These relationships are on per transaction basis. This is kind of Postal service. You pay for each transaction and that’s it.
  • These relationships are based on long term contracts. The rates are negotiated for bulk volumes and systems are integrated for easy flow of information between the two entities.
  • These are more like partnerships. The 3PL will make investments in their business and you will be committed to them. Both, the client and the 3PL grow together.

Businesses outsourcing for the first time, may and usually do start from the transactional model. As they gain experience and the volumes of shipments grows, they move to more mature models of engagement, forging partnerships with their suppliers.

 

Outsourcing to a 3PL player may seem confusing at the beginning. There are a lot of players with different value propositions and you will need to invest time to choose the one that is right for you. However, once you have the right partner, you do not have to worry about logistics and focus all your energies into your core business practices that result in growth of your business.

Reasons why touring your potential 3PL Company is a good Idea

A 3PL provider is not just an outsourcing agency for your logistics requirement. They are more of a partner to your business. For manufacturing companies, you visit the manufacturing premises, meet and talk to the people working on your product and ensure that apart from your specifications, your core idea behind the product is understood by the manufacturing team, so that the spirit of the product along with the quality of manufacturing is maintained. Similarly, you should visit your logistics providers so that your logistics team understands your business values and helps you achieve them. You also need to be comfortable working with the logistics team of 3PL working on your project. Paying them a visit is a great way of achieving that mutual comfort. Let’s look at the objectives of visiting your 3PL provider in a little more detail.

 

Meeting the team: It is important to meet and understand the people who will be working on ground for your project. You might not meet every person on the team, but it is always a good idea to meet the key people, who will oversee your operations to understand how they work. Are they very formal or easy going? Are they relaxed and efficient or stressed and enjoying it? Are they laid back or stickler for the processes? While there is no right answer (you may not want someone to stick to the last letter of the process, when it is stuck, but just get the things moving), you may get a great understanding of their behaviour and see what works for you. Do you understand each other when you communicate i.e. In colloquial terms, do you speak the same language? Are they pro-active enough to spot the issues with incoming shipments and alert you before your shipment goes to the client?

The key here is to understand their personalities and build a rapport with them. You will be working with them every day. Knowing how they work and letting them know how you work, will make this relation more productive. Once back, you should be able to just pick up the phone and talk to them to get the problem sorted. Similarly, are you open to their suggestions? They might have some good ideas that you may have never thought of.

 

Understand the facility: You can’t put everything down on the paper. While you have read about their facilities, their equipment and verified that your needs are met, seeing the actual facility is something different. Especially so, if your product requires specific handling. For example, the ongoing cleanliness of the facility cannot be captured in a still photograph. For food products, how good is their cold storage? How do they arrange different SKUs in their cold storage? How is the meat and vegetable stored separately? (A well separated way of storing meat and vegetables could become another marketing plus for you). For fragile products, how sensitive is their handling equipment. Many times, packaging requirements of the product need to cater the requirement of storage as well. For example, if the warehouse does not stack your products one on top of other instead puts it on the shelves, then the packing material of your product can be a little less strong and thus save you some money. Similarly, a review of the loading facility may also help you optimize your packing needs.

 

Understanding their processes and procedures: During the contract, you stated your requirements and they are complaint with them. For example, if you are handling food items or medical supplies, they have the required certifications and thus will follow the strict procedures required for the continued certification. However, many well established 3PL players know that certifications ask for bare minimum. There’s a lot more than can be done, and some 3PL providers go beyond those minimal requirements, because they understand the benefits of doing so. Understanding their processes also gives you a chance to see if you can optimize any of your processes of packing and storage, during manufacturing. You can perhaps pick up a best practice that can be followed at your manufacturing processes (for product handling). How do they handle returns? How do they handle shipment of defective products back to manufacturer? You also need to know their systems capabilities and maturity. How deep or wide is their reporting capability? You can perhaps use some of the additional reports, that their systems offer, to your benefit. What will it take to integrate their systems with your systems, so that information can flow seamlessly. You are sure to get an understanding of such questions when you visit the facility.

 

Strategic fit: Every business has growth plans. They either want to grow rapidly in one vertical or one kind of product, or diversify to different products. Also, businesses usually set themselves a growth target i.e. how fast they want to grow. Personal visit will help you understand if your 3PL providers can support your growing needs. Are they large enough to handle your growing volumes? For seasonal business, can they handle the spikes in volumes? When you plan to diversify, do they have the storage facility for the different product lines that you are planning for, in future? What about transportation. Do they have tie ups with enough transporters to provide you with options (speed and cost)? What about backups transporters? How good is their service for your primary target market area/geography? What about your future market geography? Do they provide service in that region? You need to consider these questions if you are looking for long term partnership. Remember, these companies are also looking to grow and they too like to work with people who are moving ahead on their own growth path.

 

While choosing, a right logistical partner can be a critical element in your customer satisfaction, a right 3PL partner can also ease your own operations. Visiting the 3PL is important step not only to understand their facilities and operations, but it also ensures that you have done your due diligence, so that in an unlikely case, if things head south in future, you have your base covered. On the other hand, 3PL providers can be source of ideas that you might have not just thought of, but are good for your business.

How to Effectively Handle Customer Returns: Making the Process Smooth

 

No business likes their products to be returned. However, it is a reality that every business, whether online or offline, must deal with. There may be nothing wrong with your product yet a few customers would want to return it for various reasons and get a refund. You should note that there’s nothing wrong with getting a few returns. No product is meant for all customers. In fact, you should anticipate a few returns and be well prepared in advance to handle them. A ready and smooth return process will not only make your job easier, it will also increase your brand image in customer’s mind. Let’s look at few things that will make it easier for you handle the returns.

 

Well defined return Policy:  Since you anticipate returns, you must be define your return policy for customers, have it clearly displayed on your website and make sure that you customers understand it. Make sure it is visible to customers while they are making the purchase (may be via a link). The package of your shipment should contain printed return policy along with any other documentation for the product. If they want to read it online, it should be easily accessible on your website. The language of the policy should be easy to read and understand. It is important that customers understand clearly, that when your return policy says 60 days from date of purchase it does not mean 60 days from date of receipt of product. Similarly, other requirements for returns must be in such a language that customer understands it in first reading. Especially for refund, ensure that your policy for refund amount, refund mode and time of refund is clearly mentioned. After ‘where do I return this’, the second question that the customer will ask is ‘My money?’ This will reduce the hassle for you later in the process.

You can use your return policy as a marketing tool as well. If you are offering free returns, make sure you highlight it. If you are offering any coupons or incentives or returns within specific period, ensure that these are highlighted. If you are asking for a reason to return, ensure that reason is well understood by your team and complimentary product if offered to the customer.

 

Return Process:  Make the return process easy for the customer. Include a postage paid return envelope or a return label with the product, if applicable. Hopefully not many people will use it, but most of them would give you the credit for giving them this option. Include a small note saying something such as if they are not 100% satisfied with the product, they can use the enclosed return label to return the product. Customers like these small gestures. If there are any forms that they need to filled in, Pre-fill the obvious sections (customer details and product details) for them, so that it is easy for them to fill just the relevant information such as reason for return quickly. Since they don’t need to spend any time filling mundane details, they may spend that time to fill in detailed feedback in the form.

 

If you are not providing the return label, make sure that return address is clearly indicated in the documentation (bill, invoice etc.) at the delivery, your website and any other touch point where customer might look for it (if you have a mobile app, include the section for returns with these details). Provide a phone number, if possible a free phone number, for customers to contact, if they have any query about their returns.

 

Receiving and processing Returns:  On your part, ensure your logistics team, warehouse or storage knows how to handle returns. They should know where do the returned goods need to be stored and how are they to be processed. If there are unopened boxes with products that are good to be sold again, then verify and put them back on the shelf, to be sold again and mark them so in the system (i.e. update the inventory). If they are damaged, then send them back to the manufacturer or your manufacturing unit. If it needs to be disposed, ensure how do they dispose it. Once you receive the product, how will your team process the refund (i.e. indicate the finance or accounts team to proceed with payment to customer)

 

Engage with the customer:  Remember, a customer is returning your product because he is not satisfied with it. This is a great opportunity to engage with the customer and get his feedback. Why did your product fail to meet his requirement? What could have been improved to provide him a better experience. Is he considering any other product? Make sure you thank him for the opportunity to serve him and hope to meet his expectations next time. The whole communication should show that you are interested in meeting his expectation with the product, and not just return the money and close the chapter. Engagingly positively over returns, with the customer will help to enhance your brand image.

 

Returns are a tricky business. Nobody likes them. They are not only lost revenue, but they add to the processing overheads. Yet, they are essential part of the business that cannot be done away it. Instead of looking at them as necessary evil, you can use them as an opportunity to build your brand and improve your product.