Recycling Plastic: An environmental friendly way to use plastic

Plastic is one of the most common and most popular packaging materials out there today. It is used in almost every industry right from packaging Machines (using plastic pallets and plastic beans) to packaging food (in forms of cups, trays and films). It is used in making bags, boxes, films, trays and many other such items for consumer and businesses alike. Plastic is literally spread to every business. However, at the same time, plastic’s popularity has made it a part of the huge environmental problem that plastic has come to represent.

Plastic is a non-degradable material which goes to landfills after it is used and it takes many years before it decomposes. Because of this reason, it has become one of the major sources of pollution in land and water bodies.  While the research is on, currently there is no practical alternative to plastic. It seems that the use of plastic will continue to grow. Hence it is important that plastic is recycled to reduce the impact of plastic waste on environment. The recycling of plastic is already on its way to become a viable and established business model.

The process of converting waste and scrap plastic into something useful (usually pellets) is called as ‘plastic recycling’. It involves multiple steps right from the collection (usually the toughest part) to the melting and moulding (into new desired form). Here is the step by step process of recycling plastic.

  1. Collection: This is usually the most challenging part. Plastic is available and used in many forms such as cups, jars, films, bags, bottles, containers and many others. Many people mix their plastic waste with other waste and it usually becomes difficult to segregate and this aggregate waste goes to the landfill. There are efforts to make people environmentally conscious and to help them segregate their plastic waste so it can be collected and recycled. Some businesses are venturing into plastic collection by incentivizing separation of plastic waste and its deposit with the plastic collectors.  The waste and scrap thus collected is sent to the collection yard from where it then goes to the processing plant.
  2. Sorting:  All kinds of plastic cannot be recycled together. It must be separated according to its grade and raisin content. Different kinds of plastics have different melting points. The different polymer types that make different kinds of plastics, if processed together will result in a very weak plastic that cannot be used commercially. The separation can be done by machines based on the physical properties of various kinds of plastics. In some cases, an industrial solvent is used that dissolves only a certain grade of plastic leaving the rest behind. Some of the most common types of plastics that can be recycled are
  1. Polyethylene Terephthalate: This kind of plastic is tough. It has excellent clarity. It is strong and has excellent barrier to moisture and Gas.
  2. High Density Polyethylene: This kind of plastic is known for its excellent stiffness, resistance to moisture and impermeability to gas. It is used in making water, juice, milk bottles, retail bags and thrash bags for households and industries.
  3. Polyvinyl Chloride: More commonly known as PVC, this kind of plastic is tough strong and can be bended easily. It is used in making PVC pipes and cling films.
  4. Low Density Polyethylene: This is the most common type of plastic that is recycled. It is very easy to process. It is Strong flexible and resistant to moisture and easy to seal. It is used in making frozen food bags, flexible container lids, freezable bottles etc.

Sorting is a tricky and labour intensive business. Moreover, it is difficult to predict the amount of recyclable plastic that can be separated from the total plastic collected.

  1. Shredding: The collected and sorted plastic is then shredded into small tiny pieces which are easy to pass through machines and easy to transport. After shredding there may be further sorting based on the grade of plastic that may have been missed in previous sorting process.
  2. Cleaning:  All the contamination such as dust, dirt and residues of other product etc must be removed from plastic before it is melted. The plastic is cleaned using a series of air blowers, water jets and other solvents to remove any contamination that my impact the quality of processed plastic. The shredded plastic is easier to clean as compared to the large chunks of plastic. The clean plastic is allowed to dry in order to remove any moisture content before going for melting.
  3. Melting and moulding: The clean, shredded plastic of same grade is then melted and moulded into the desired shape. Most commonly the recycled plastic is moulded into small pellets called ‘nurdles’, which are then commercially sold. These pellets can then be used by moulders into whatever shape the buyer wants to, just like regular virgin plastic.

Plastic recycling depends a lot on users of plastic who are environmentally conscious. The first and important step of separating the plastic from other waste, collecting it and sending it to recyclers is the most difficult step to achieve socially. However, with rising consciousness about environment sustainability and increasing cost of crude oil, which is the source of virgin plastic, the business of recycling plastic has become commercially viable. It is set to only grow in future as oil gets more expensive and plastic keeps on finding new applications.

 

Paper & Paperboard Packaging Market – Trends & Forecast

Paper packaging has been around for very long time. From simple brown bag and cardboard box cartons to much sophisticated waterproof paperboard boxes for Chinese takeaway, paper packaging has come a long away. As eco friendly packaging has started gaining momentum, paper has come back in limelight due to its bio degradability. However that is not the only factor driving the increase in consumption of paper based packaging. Social changes and technical advancements are equally playing their role in determining the direction of the paper packaging industry. Let’s take a look at some of the key trends emerging in paperboard industry.

 

  1. Social changes in developing countries. Most of the educated population in developing countries is moving onto more qualified jobs leading to higher disposable incomes. They are replacing the traditional meals with more modern processed, frozen and packaged foods. As these economies continue to grow, this changed trend in eating habits will continue to grow. There is a trend to move from unpackaged goods to industrially packaged goods. Both of these will lead to increase in consumption of paperboard packaging material. The migration of rural population to urban areas continues to rise. With this the migrant’s consumption patterns also change to consume more packaged and processed food and industrialized goods. Overall, the social changes are leading to higher consumption of packaged goods in both the developing and developed countries. Paperboard being at fore front of retail packaging will continue to see rise in demand across the sectors.
  2. Food delivery on rise. Recent trends show that millennial generation prefers to order take-away instead of going out to dine, to avoid the hassle involved with going out (traffic, parking etc). A study showed that more than 30% of Americans order food deliveries twice a week. With new third party delivery options, even the dine-in restaurants have started providing home delivery options. Because of this the food packaging sales will increase in general. Another interesting factor that has come to forefront due to myriad options for food delivery is the packaging style. Instead of simple boxes, the ‘healthy fast food’ providers, the ‘gourmet food home delivery’ providers amongst others are using customized packaging in forms of tray style packaging with built in partitions for various side dishes for the convenience of the user. It is this customized packaging that will see the maximum rise in sales.
  3. Balance sustainability and productivity. In mature markets, the paperboard manufacturers and are struggling to extract every penny of productivity from their equipment. The improvements in process which they implement extract marginal gains at best. They are now investing in next generation machine that reduce waste and decrease change over times and consume less energy. These not only provide higher productivity, but also reduce the consumption of raw material and have reduced environmental impact as well. To meet the new tighter environmental regulations and changed consumer preference for environmental friendly packaging, the manufacturers are designing machines that use up to 30% less material to produce the packaging material of same strength. There is change from finding balance between the sustainability and productivity, to getting the synergies between the two. Less consumption of material and more effective use of material increase the dollar productivity for the manufacturer and are also more environmentally friendly. This synergy will redefine the way packaging industry works and does business.
  4. Recycled Vs Virgin paper issue.  There is a growing concern about disposal of the packaging after its use, especially in the food industry. There is talk of packaging material that has similar life cycle of that of the product it packs and then it degrades or decomposes. However, the issue of contamination of food product with packing remains in such cases. The package must preserve the health of the consumer at every stage. Self decomposing packaging solutions are not yet suitable to meet this requirement. Using recycled paper comes with own challenges. It has host of inks, glues, chemicals and other ingredients which cannot be ascertained unless confirmed by the original manufacturer of original paper product. In such scenario, one can never be sure about the contamination that recycled paper will add to the product. This means that with increasing consumption, the use of virgin paper in packaging will rise in comparison to recycled paper. The researched are working on barrier coating that will prevent moisture and odour from transferring and preserve freshness and aroma of the food. The new nano-materials, antimicrobial barrier coatings will see the limelight in packaging.
  5. Smaller, more practical packaging. As the social structure of the society is changing, the consumption patterns are also changing. Families are getting smaller and smaller. The nuclear families have become the norm. There are now a significant number of households with just one member. Moreover, people are getting more health conscious. They are conscious of the serving sizes and portions that they are consuming. The remaining food is resealed, needing a re-sealable packaging for larger portions. Consumption on the go is also on the rise. (Prime example being coffee and other beverages). This means that portion sizes not only need to be smaller, the packaging needs to be designed to facilitate and simplify eating on the go. Many consumers are willing to pay more for a single serving pack of food. This will give rise to single serving or multi unit packaging (where one unit can be severed from the rest without opening the product). This will lead to interesting controversy. On one side will be the green initiatives promoting less packaging, less waste, less use of material and on the other side the smaller, individual packaging which will require more material and generate more overall waste.
  6. Premium packaging. As consumer gets more sophisticated, the packaging for premium luxury brands require impeccable details, such as better colour and printing and embossing, better strength and texture of the material itself. These will require high grade of paperboard to be used for packaging. With increased spending capability, craft and gourmet food will have increased share in the market, requiring more premium packaging. There will be shorter runs, speciality coating to give superior impression of the product.

 

Overall, the Paper packaging industry is set to grow. Be it the environmental concerns or consumption patterns or ease of production, paper is meeting expectation on every front. With the new methods to restrict the transfer of odour and aroma and anti microbial coating, it may well be on its way to replace plastic containers.

8 alternatives to plastic packaging

All products need to be packed in a safe secure packaging that not only provides the protection to the product but also adds to the aesthetic presentation of the product. Today plastic packaging is one of the most common and popular form of packing material. It is cheap, strong, and durable and can be moulded into any shape required. However plastic has one major disadvantage. It is not bio degradable. Once discarded, it goes into the landfills where it sits for thousands of years. With consumer becoming environmentally conscious there is a need to move away from plastic packaging and use more eco friendly alternatives. Most of these alternatives have been around for years. They just need a fresh perspective to add some aesthetic appeal. Here are some alternatives which are not only better than plastic, they also add to the aesthetic appeal of the product.

  1. Paper is degradable. Not only that, paper is also reusable many times: Brown paper bags were quite common until some years ago. They are now making a comeback. Paper is used to make paperboard that is in turn used to make strong boxes which are used commonly to pack small light items. Paperboard has come of age and can be used for making food grade packing as well. Paperboard based sandwich packs are quite common. Paperboard cups are also commonly used for serving beverages. These can be shredded and reused again for different (non food grade) products or can be put down for bio degradation. It is made of wooden pulp that is natural.
  2. Cardboard is a thick form of layered paper is also very common in packaging industry: Cardboard needs no introduction. It is very popular packing material in form of boxes and cartons. It comes in all sizes, for small hand held products such as mobiles and toys to large boxes well above 1 meter on each side. Corrugated cardboard boxes have good strength to handle heavy products. They can be carried unfolded, requiring minimal space and can be easily disposed off. In fact strong large cartons are now being reused at homes to make coffee tables and as storage space among other things. And they disintegrate quickly, just like paper.
  3. Corn Starch: Corn starch is used as a Styrofoam replacement in packaging. It has the strength similar to plastic. It is shaped in form of beans and peanuts for providing cushion in packing large products and in making packing trays for food items. If disposed properly it decomposes into water and carbon dioxide within months, which is much shorter than the decomposition time required for plastic. It is made from corn, which is cheap and readily available.
  4. Zip lock bags: Though these are made of plastic, they are designed to be reused. They are airtight plastic bags that can store any product, which they can accommodate. Many households reuse them for storing food products. They may not be easily decomposable, but they are definitely reusable which increases their usable life and reduces the stress on resources used to produce them.
  5. Glass by itself is made from plain silica: It is an excellent material to store food items as it is water tight, air tight and inert. It also lends a classy look to the product and well designed glass jars are quite presentable. The jars and bottles that have wind up caps instead of crowns can be reused as household storage for Jams, sources, marmalades and many other items. If nothing else, a well designed jar is used as decorative item by itself. It is not only degradable (it is just sand after all), it is highly reusable. In fact soda companies reuse most of their bottles. There’s no reason why a business cannot have a well designed glass container that lends an aesthetic look to their product and remain eco friendly.
  6. Jute has become a coming of age material when it comes to its use as packing material: It was used to make large gunny bags to carry produce and grain (such as potato, rice, wheat etc) in large quantities. But today it is being used as a chic packing material that comes in various shapes, sizes and colours. It gives a rustic, classy old world feel to the product while retaining the earthy look. It is used to pack speciality items such as Tea leaves, dry fruits, speciality wines and gift items. It certainly does lend a certain class to the product. Jute is strong and can carry good amount of weight in small size packing, making it ideal for shipping.
  7. Wood is totally eco friendly: It has been used as packing material for large items for very long time. Even though the plastic pallets all are rage in the industry, wooden pallets are still very commonly used in freight industry. Wooden crates have been used for long. With recent advances in cutting and carving tools, small wooden boxes have become popular to pack speciality items. These are now used to increase the perceived status of the product and are by themselves reusable. This makes them a very effective choice as a packaging material if you want to increase the status of your product.
  8. Various forms of metal have been used for packaging sensitive material: With recent advances, the metal, in form of aluminium cans, foils, steel cans and jars, it has again become popular. It can be reused by consumers in the home for storage, and can also be easily recycled. It has been used for packaging food products like Oils, tea and other aromatic substances that need to be kept away from light and air. The thin aluminium foils are used to pack candies and chocolates. A non reusable but recyclable form of packaging made of metal, is the very popular can of soft drink. These are crushed, melted and reused to make cans again. Metal packaging is very versatile. It has been around for a long time. With new innovation it has become cost effective and attractive.

 

Packaging can be fun. It can be reusable, recyclable and economic. Producers just need a little imagination to use eco friendly products and make their product elegant and attractive.

Retail

Top Retail Merchandising Trends in 2017

The world around us is changing very fast. Owe it to technology or overall economic development, the way people go about their lives is changing. The trend of what people spend, on what do they spend it, how do they spend it is all changing. This is changing the world of retail business. While there have been studies by many economist all over the world, many of these changes are obvious, sensible and required to meet the needs of today’s usrban, fast paced life. Here are a few top trends that we think will grow this year.

1.Smaller stores instead of larger stores: People are moving closer to the city centres and downtowns. From suburban houses, they are moving into apartments. Many are also now avoiding purchasing or owning a car. That means the patronage to large format stores situated on the outskirts of the city will reduce. City centres don’t offer space for large stores. So smaller stores will increase in number. Many of the large retailers such as Target, Ikea, Best buy in US and Tesco in UK are already investing in small format stores. At the same time, customers don’t want to spend a lot of time walking around the aisles of a store. They now have an option to order things online and have them delivered to their doorstep, in the matter of hours. This means brick and mortar retail stores need to carry more curated products for their niche clientele in their catchment area to stay competitive. These two trends combined together will result in smaller stores located closer to the main residential areas, carrying a smaller but relevant selection of products.

 

2.Unique in-store experience: Customer has now many options to buy his product from. Not only offline, there are now many online stores selling same or similar products. However there is one thing that online retailers cannot provide the customers. The physical feel of the product and the in store experience. It is well known that for many customers, buying a product is a physical experience that involves many senses. With new technology, more options are becoming available to please these senses. For example, a home ware retailer in US, provides its customers with a handheld tablet. Customers can scan the barcode of the product they want and get more information about it online, on the tablet. If they like to purchase it, they simply add it to the digital basket. All the products are collected, packed and handed over to the customer at the checkout counter. Customers don’t need to haul the baskets or trolleys anymore. Now that’s a unique customer experience. As the unique in store experience becomes more important, we will see more such initiatives coming through.

 

3.Mobile payment solutions: Cash is getting irrelevant. Cards are a passé. There was a time when almost every store offered a loyalty card and customers carried bunch of them on their key chains. That was when it was simpler to just provide a customer with a card to identify him as a loyal customer. Today, technology has developed far beyond. All you need is just a mobile number to identify the customer. With digital wallets technology proliferating, credit cards are also becoming a hassle to transact with. This may be a good news for the retailers too, as they don’t need to maintain expensive credit card machines. A simple mobile based transfer of money with wallets or other mobile technology is easier to maintain for the retailer. With NFC technology maturing, it will be just a matter of touching the mobile in front of scanner and the payment will be done. This may seem like a small incremental step, but has huge potential and impact on the time customer stays at the checkout point.

 

4.Personalization will deepen: With so much competition, it is important to know your customer. In online world, the moment an old customer returns, he is identified and products, promotions and offers are shown based on his past purchases and search history. That’s almost a standard feature now. However when it comes to offline, this is still difficult to achieve. But, remember the mom and pop neighbourhood stores of old days? They remembered everyone by name. The moment a customer walked in, they told them where their special preferred product was kept, or a new product similar to the one they were looking for is here and they should try it. That’s the kind of personalization technology needs to provide. We believe it will happen sooner than later. The level of personalization in both offline and online retail business will improve.

 

5.Data will continue to be the king: More and more retailers will adopt data based decision making across their supply chain, right till the post purchase stage of the buyer’s journey. With tools for data collection and analysis becoming easily accessible, there will hardly be any retailer who will not employ data analysis to improve their efficiency and customer satisfaction. This will proliferate only in online world, but also in brick and mortar world in a very different format. A very well known clothing merchant in USA, factors in current trends and historical data to decide which product to buy and distribute to which of its stores for fastest movement of inventory. It is not only able to predict the demand; it also keeps the stores stocked with right merchandize to the right stock level, minimizing waste throughout the supply chain.

 

6.Retail and Technology will become inseparable. To provide consumers with better experience and entice them to make a purchase, the retailers will invest even further in technology.  Artificial intelligence, augmented and virtual reality, internet of things etc will become preferred tools that online retailers and brick and mortar stores, both will exploit to enhance and personalize the buying experience for each customer. For example there will be a smart dressing room uses virtual technology to show a customer how she will look in a particular dress without their having to actually try the dress on. Technology will further invade every step of buying, right from enticing (advertising) to payment and delivery of the product (heard about drones?)

 

Retail world is changing. It was shaped by what was available to the customer for purchase. The customer came to the store to make his purchase. Today, the store needs to reach to the customer and attract him to spend his money in that store. The key attracting factors are going to be faster, easier and more personal attention than ever before.

 

Quick Fixes for Your Biggest Shipping and Fulfilment Problems

Shipping and fulfilment seem easy. All you need to do is stick a label on the ordered product and hand it over to the shipper. It should it delivered to your customer, and world is a happy place. But anyone who has spent any time in the industry knows that it’s anything but that simple. It is one of the key components in the value chain and often can be a nightmare to manage. Imagine thousand of product going out in thousands of different orders in as many combinations, to thousands of locations with multiple shippers. Items will be out of stock, damaged, delayed, returned, sent to wrong addresses and sometimes, despite the best efforts not sent at all. The last one will do most damage to retailer’s reputation especially if he is new to business or has a small business. But all these problems can be handled. Let’s have a look at some of the top issues online businesses have with fulfilment.

 

 

  1. International Fulfilment: With internet the reach of businesses has crossed all oceans. It’s easier than ever before to get an order from across the border. But delivering your product across the border is not as simple as just packing and shipping. International deliveries involve tons of paperwork and rules that must be complied with. There are taxes and customs to be taken care of, which may be different for each country that you ship to. You need to account for extra time taken at the ports, customs and by other government agencies, both, foreign and domestic. But all is not lost. Build a repository of shippers for your most shipped to countries. These shippers should have experience in handling all the paperwork, taxes, customs and should be able to tell you the total cost and times involved, based on the product category. They also should be networked in those agencies and countries that can be leveraged, should a shipment be stuck somewhere. Use their services instead of handling everything on your own. They may charge you a little more for this, but it will save yourself tons of hassle.

 

  1. If you are shipping international, there is a very high likely hood that your product will be shipped in container, on a ship along with many other products, stacked somewhere in between them. This requires extra care while packing. Especially if you need to use ‘freight shipping’. You need to protect your product from damages and delayed shipping. Use durable packing material. This is needed so that products can handle extra stress put on it during international transport through sea. Remember, your box may not end up on the top of the stack and there’s nothing you can do about it. So make your packing extra strong. Use bubble wrap to fill up empty spaces and provide some cushion. Use proper pallets. You shipment should not exceed the weight restrictions of your pallet. The boxes should not be stacked beyond the edge of pallet. Use load protectors to prevent damage from chains, straps and other pallets. Remember, any money you spend on packing, adds to your reputation when product reaches the customer in mint condition, and it has come from abroad!
  2. Customer Trust: This one is a key success factor. If they trust you, they will come back to you and bring their friends and family along. To gain trust, you must reduce errors. Most errors can be attributed to administrative errors. These errors are spread along the supply chain. Wrong product, wrong order, wrong address, wrong delivery (missed delivery time) etc are most common. The error could be small, but may have a large impact. You made a promise to the customer about what he wanted, where he wanted and when he wanted. If you don’t deliver on it, you lose his trust, and potentially the customer too. Train your staff. Make them understand the true cost of errors. Let them understand how a small error can lead to losing customers and harm image of the company. Invest in automation and integrated systems. Correct use of technology can reduce a lot of errors. When the customer calls, be polite. Listen to him. He is calling because he has a problem. The problem is related to your product. Remember, you need the customer while he always has other options (your competitors) to go to.
  3. Customer communication: Once you have received the order, the customer expects the delivery on the right time. But that may be a few days away. Meanwhile, you are working on getting the product from manufacturing, assembling the order, packing the product, shipping and what not to ensure that customer has the delivery when promised. But customer has no communication about it. You should update the customer about status of his order at regular intervals. It could be periodic, or when the order crosses a stage. This is true especially during shipment. Customers like to track their orders. Provide them with tracking number. Make sure that correct shipment tracking code, provided by the shipper, is provided to correct customer. Wrong tracking codes create a lot of confusion when there shouldn’t be one. Test the code before you send it to the customer. It’s a simple thing, just check if the code shows the right address and right customer name.
  4. Stock management: You put up a product on your web store and promised delivery by certain date. You got the order, only to find out that product is out of stock. That is a very tricky situation to be in. Always ensure that you have adequate inventory for each product that you carry. Invest in a good inventory tracking system and automatic ordering system. Integrate your order acceptance system with inventory management system. If an item is not there in the inventory, the order should not be accepted, or at least inform the customer that order will be delayed.
  5. Communication with suppliers: Establish automatic communication lines with your suppliers. The product should be re ordered automatically when the stock quantity falls below a certain level. This is basic. However, it should be done automatically. Your supplier should be able to sense the speed at which your orders are moving and when you will need a refill, and be ready with a refill. Ideally you should never be out of stock for any item.

 

Establishing a fulfilment process with zero errors is impossible. However with careful planning and investment in technology and training, these errors can be reduced to a great extent. In a business world where 99.99% efficiency is not good enough, it is imperative that your processes are well designed to absorb errors before they reach the customer.

 

 

Top 5 trends in Packaging Industry

Consumers today are more conscious and more aware. They care not only about the product they need, but also how using that product is made more convenient for them. And packaging plays a very important role in that. The primary reason of packaging always has been the protection of the product that is being delivered. But today packaging does a lot more than that. Packaging is used as a canvas where the brand communicates with the consumer. It not only attracts the customer, but based on the information that is printed, the material that is used for packaging and the shape and size of packaging; it conveys your brand values to the customer. It tell the customer what your brand stands for, creating a unique impression about your brand, even before your product has a chance to be seen by the customer. Needless to say, packaging in itself has become a key differentiator.  Here are some of the top trends in packaging industry.

  1. Sustainability: Consumers are becoming increasingly aware of environmental issues. They are changing their buying habits to be more environmental friendly. They are increasingly looking for signs on the packaging that manufacturer has a green conscience and increasingly wary of greenwashing. And expert white paper by PWC goes on to explain how sustainable practices have become essential to the perception and identity of the brand. A top sports company has also produced an environmental profit and loss statement highlighting the impact of their sustainable practices on environment, in dollar value. It has become imperative that brands continue to carry businesses based on sustainable practices and also communicate them to the consumer. Sustainability is no longer just an add on. It has become an essential part of the packaging industry. The complete story of where the product comes from, how it was made, is becoming an essential factor in buying decisions of the consumer.
  2. Healthy living: Just like environment, consumers are increasingly adopting healthy lifestyle and practices. They are more conscious of health quotient of the products they consume. In fact there is a whole segment dedicated to products that promote healthy consumptions habits. Packaging is not immune to this. In food and beverage industry, the ingredients’ were always listed as required by regulation. But that is no longer enough. The health benefits of the product also need to be communicated to the customer. Is it organic? It is low in sodium, does have daily dose of essential vitamins that will help to boost the performance while playing the sport? The packaging must focus on communicating the unique benefits of the product and offer transparency in the label. Innovative methods of preserving and displaying fresh food will become the key to long term success. The size of the product, the smaller servings for snacks, which reduce the  intake of sodium, fat and other things to just the required amount, while satisfying the hunger pangs of the consumer will become standard. After all when you are hungry you reach for the box says cookies even if it’s just 2 cookies inside.
  3. Convenience: The way the products are being used by the mobile consumer is very different than how it was consumed at home. The standard box packing of food is not longer suitable for on the go consumption. Be it a beverage, or a sandwich, more and more people are consuming these while walking, or while driving, or when they are simply sitting on the bench in the open park. The design of packaging makes it an important factor in a buying decision is such cases. The smaller, lighter and easily disposable packaging makes the consumption on the go, easier. For other product categories, the ease of transportation and ease of use becomes important factor. Innovations such as dispensers and no mess applicators eliminate the need for additional packaging and make disposal easy. In supermarkets, in food section, many product now coming in reseal able packs. Many producers are moving from plastic to paper based packaging for food items, which is more environment friendly and easier to dispose off. When the competing products are more or less similar, the convenient packing goes a long way in aiding the impulse purchase decision of the consumer.
  4. Cost –effectiveness: This one seems to be a no brainer. However, it has wider connotation than just base packing. Global economic uncertainty is increasing. Consumers don’t want to pay more than what they have to for their goods. And as consumers get savier, they are looking at all costs, the base packing of the product, the transportation, storage and disposal of the packing material. The paper based packaging may look good and meet initial ‘eco friendly’ criteria, but if the consumer needs additional packaging for its transportation and storage, then it’s no good for the consumer. If the packaging is strong and will last longer, much longer than the product itself, again it is of no good to the consumer, if it cannot be reused in some way at home. If consumer is getting his peas in reseal able bags, which he can use for storing other things, after consuming peas, then that’s a very good value proposition for the consumer. The complete cost effectiveness of packaging should be looked at from the point of view of the consumer. After all if he doesn’t purchase the product, the whole value chain is pointless.
  5. Authenticity and trust: There have been several scandals around food industry. Discovery of undesirable meat (eg. Meat of another animal in beef products), Pathogens and foreign elements and inorganic items being sold as organic etc. These deplete the consumer trust for not only the guilty producer, but also for industry as whole.  The origins of the product must be traceable to the source to re establish the trust. Advertising the place of origin on the packaging increases the perception of credibility and authenticity. Packaging should be used to reassure the customer of high quality and truthfulness about product and brand claims.

The retail market is changing. Consumers are getting savvy, more eco friendly and more cost conscious than before. They are more demanding on all these fronts. They now understand that the overall cost of the product is not just retail purchase price they pay. Packaging plays an important role to clam the customer and reassure them that the product as a whole will meet their expectation.

Warehouse Management,

Why Are KPIs Important in Warehousing & Fulfillment?

Warehouse business is a back-end operations business. You don’t control sales, only deliveries. The efficiency of the operations is the key to extracting maximum profits from a warehouse. So you need to know that you are getting maximum return on your investment in this business, just like any other business. But since most of it is a fixed model, B2B business with caveats of B2C (retail deliveries), you need to understand and measure the nitty gritty of the warehouse operations and fine tune them. That’s where the KPI or Key Performance Indicators come in.

A right det of KPIs tells you the detailed performance of your warehouse. Couple it with past indicators, your forecast of business growth and you can figure out where you are heading in future. For example if you are already at maximum space utilization, you cannot expand. A client whose business is growing very fast will need more space. If you can not offer him more space, he will go to someone who has more space. That will reduce you space utilization and also your revenue. Not to mention, you now need to get your sales to run and find a client who can utilize the now freed up space. So while on the face of it a full utilization of warehouse space sounds good, it is not good for a growing business. That is why, it is not only important to have the right KPI, but you also needs to set the right standards for those KPIs. Standards should be the ones that work for you. (Is 80% space utilization good for you, or you prefer 95%?)

Similarly, KPI also help you in benchmarking. benchmarking tells you how good you are doing as compared to others in the same industry. If your KPI is below the industry standard, that means you are not utilizing your warehouse to the best possible extent. You might be making money, but lower KPI means that you are leaving money on the table. You could get more profits by improving those KPIs. On the other hand if you are beating industry KPI but still not making money, something else is wrong somewhere. A well designed set of KPI itself would direct you to where to look. If you are beating the KPI and making money, it looks like a good sign. But it can also mean you are stretching yourself. If you are extracting higher productivity from your machines and spending less on maintenance, you might have to bear a high depreciation and replace the machines faster. If your order cycle time is very less, you might not have any contingency built into the process. That is risky.

Whether you want to stay with the industry benchmarks or set your own benchmark standards, is entirely up to you. While industry benchmarks are there for a good reason, (most of the industry works at those levels) you don’t have to be bound by them. Your KPIs will vary depending on your niche value proposition and your operating model. For example if you specialize in handling delicate products that need more space for storage, your floor utilization will be lower. Also, the KPIs for 2PL warehouse will be very different from the KPIs for 3PL warehouse.

The Supply Chain Operational Reference Model (the SCOR Model), created by Supply Chain Council, provides for over 200 KPIs for monitoring the overall performance of a supply chain. These are broken into various levels to get more granular picture of the business. Some of these could be used for measuring performance of a warehouse as well. Research them to identify which one are suitable for you. Now that we understand what KPIs means and why we should measure them, let’s look at some of the key KPIs for warehousing business.

The main KPIs for a warehouse should focus on Receiving, put away, storage, pick and pack and shipping.

Inventory Accuracy: What is the accuracy of the workers when preparing the product (or order). It is measured by taking the headcount of the items in the stock and comparing it with what’s recorded in the books. This one has direct impact on your working capital and order fulfilment capacity.

Perfect Order Rate: This measures the number of orders shipped to the customer without any incident. The incident could be damaged goods, inaccurate orders, late shipment etc. Needless to say, this one tells you how well is your warehouse operating where it matters the most, the final fulfilment of order, shipped out of the warehouse.

Productivity: This measure tells how many orders are ready to be picked up by the shipper, per hour. Depending on your warehouse business model, it could the number of orders per hour, or total line items per house or it could be the total dollar value of the orders per hour.

Equipment utilization: This one tells about how well your equipment is being utilized. Underutilization of the equipment means you should stretch it more and achieve more. Overutilization mean higher maintenance and replacement costs. Idle equipment depreciates without giving any return. Over utilized equipment can lead to breakdowns and stop the whole chain, leading to higher losses. Your equipment must be running at the optimum rated utilization to extract maximum value from it.

Cycle time: This KPI measures the total time taken since the material came in as inventory and was picked up by the shipper for delivery, as a part of the order. The shorter the cycle time, the lesser the money tied up in working capital. An end to end cycle time would include the transit and transportation time taken by the shippers for the final delivery to the customer’s premises.

Average cost per order: This KPI measures how much are you spending in running the warehouse. It is calculated as total orders fulfilled divided by the total cost incurred for the warehousing operations. The costs include the manpower costs, cost of rejects and returns absorbed by warehouse, cost of damaged products that are absorbed by warehouse, variable costs for running the warehouse (utilities, taxes, rents, insurance,), equipment cost (consumables and depreciation for large equipment) and all other costs. This should be always be as low as possible, as it eats straight into your profits.

There are many other KPI that you can measure to understand the efficiency of your warehouse operations. The finer the KPI, the deeper the control it can provide. However, at a bare minimum, you must keep an eye out for the top line (revenue), the bottom line (profits) and ROI (return on Investment).

Best practices for managing E-Commerce Warehouse

E-Commerce business model is growing by leaps and bounds. New business first open online and then go for brick and mortar stores, if they want to. Opening online store is easy, fast and very cheap. However, it comes with it’s own challenge of distribution and storage. Storage in terms of warehouse, the place where inventory is stored. This is probably the only last brick and mortar link remaining in the ecommerce business model. Managing the warehouse efficiently is one of the few tricky things in running ecommerce business. Whether a 3PL or in house, the warehouse can either be a capital locking, uncontrollable monster or fast and efficient business differentiator. Here are some of the best practices to help run the warehouse more efficiently to get that edge.

 

  1. Invest in Technology: Invest in a good Warehouse Management System (WMS). A WMS is not just for tracking inventory levels and SKU locations. Today’s WMS can do lot more, with increased focus on automation, order streaming, picking order items etc. You can pick up items from one location for successive orders at one go, instead of coming back to same location for another order just after a few minutes. Define the batch size of orders and pick up all items from that SKU for all orders in that batch. Segregate them at order packing line. It’s much faster. Similarly integrate WMS with advanced Transport Management System (TMS). Get the two working together and reduce the time that you inventory spends waiting for the truck at load bay. Similarly invest in a good RFID solution. It should track the item from order line item to SKU location pickup to packing to dispatch. With thousands of items and thousands of orders, RFID solution becomes a necessity just to ensure a six sigma quality standard.
  2. Embrace Chaotic Warehousing: That’s how Amazon is doing it. With advanced warehouse management system in place, there is no need to spend hours planning and defining a logical process to decide where to stock the new SKU. Just dump it in the most easily accessible location and feed the location in the system.  When the order comes up for that SKU, WMS knows where to pick it from. Whether manual or automated, once you know the location, you just need to run and pick it up. If it’s a good warehouse management system, it will tell you to relocate the fast moving SKU closer to the packaging line to reduce pickup times. It should do this during routine maintenance period. That’s one more good reason to invest in WMS.
  3. On demand warehousing: World is moving towards on-demand strategy. That is the key to whole ecommerce business strategy. Warehousing for ecommerce can be no different. To stay competitive every cost must be variable. That includes warehousing cost. As the demand for different product changes, the requirement for warehouse space changes. Different warehouse facilities are needed in different area requirement depending on the changes in customer demand. It will vary with seasons, festival period, promotions and campaigns and other events. Warehouses can only stay relevant to their ecommerce clients by providing the service on as need basis. After all it’s just space that your competition can also provide quickly.
  4. Serve all needs under one roof: Historically, warehouses were divided by various verticals. Different warehouses were used for brick and mortar retail, ecommerce and for B2B. Separate shippers were operating for small packages, less than truckload shipment (smaller trucks) and full truck load shipments. However, with push towards lower cost products, lowering other associated costs such as storage and transportation has become essential to remain profitable. Utilizing warehouse space for all kinds of orders (which are not so different in reality) makes best utilization of space. Using same shipper for all your needs gets a better deal from the shipper, getting maximum bang for your buck. Remember, two half trucks can be combined to make a full truck load to get volume advantage in shipping. Most shippers are anyway combining various services to stay cost effective. There is no reason why a ecommerce business should not take advantage of this.
  5. Batch Picks instead of individual orders: For a large warehouse, that stocks thousands of small SKUs, doing rounds to pick individual order items takes significant time. Instead, club your orders in batches. Create a batch of similar orders, and make it a manageable batch. Pick the items for whole batch at once, in single go, in single cart. Sort the batch into individual order at packaging line. This will be a little tricky if you do it manually. But still doable if your operations are small. This becomes absolute must for large scale operations. With WMS and radio Frequency tracking, you virtually eliminate the possibility of missing an item for a particular order and save time for doing multiple frequent trips to same SKU location. WMS will also create a batch of similar orders to pick up order items in one go. That’s  one more case in favor of WMS.
  6. Use metrics: Time to dispatch from the receipt of order is well known metric. But everyone has got that to almost perfection. (if you are still struggling with this, leave everything else and get this in order first, if you even want to stay in business). Measure everything that you do. Accuracy of orders, returns due to various reasons, defective pieces shipped are first level of metrics. Dig deeper. Measure time to assemble an order, time to pack, revenue per unit of warehouse area, profits per unit of area, profit per employee etc. All these measures will help you not only in identifying the bottlenecks, but also highlight the areas of improvement that can improve your turnaround time and reduce costs. Warehouse business is high transaction, low value per transaction business. Every opportunity to increase efficiency and reduce cost must be grabbed. Metrics help you do that.

 

Warehouse business has become very competitive business. With easy flow of capital and good connectivity and multiple transportation options offered by various shippers, the location of the warehouse has become almost irrelevant. It offers marginal advantage at best. This means that to stay competitive, the warehouse needs to improve its operations and offer real business benefits along with the cost advantage. Warehouse must invest in technology and take benefit of changing business environment to offer flexibility that e-commerce business needs of them.

10 Advantages of Private Label Branding

The products that are manufactured by the same company that sells them (usually a well established retailer) are called Private label brands. These products are made by small manufacturers with smaller batches specifically for a particular retailer. These products sell exclusively only at the retailer’s stores. Retailers sell these products along with other brands of same or similar products that are stocked in their stores. Private label products offer several advantages for the retailer. Here are some of the advantages.

 

  1. Exclusivity: Private label products are made only for a particular retailer on order. As they are unique to the retailer, they do not compete with national brands. The target segment for these products consists of customers who are already loyal to the retailer knowing they will get similar quality with products of retailer’s brand.
  2. Retailer deals directly with supplier and sources: National brands have multiple channels, routing their products. The supply chain is long. With Retailer’s own brand, he is dealing with his suppliers and sources directly. he can feed back the marketing intelligence, trends, customer preferences etc, directly to the suppliers and sources and quickly get update the products. The product updates are much quicker, to the liking of the customers.
  3. Own unique image of retailer. Strong customer recognition: The customers are already aware of retailer’s brand. They associate his brand and his service level with certain quality. With the product of retailer’s own brand, they know exactly what level of quality to expect. The purchase decisions are made quickly, resulting in quick turnaround of inventory. Retailer can further build his image from the quality of his private label products as well.private label, 3pl, packing
  4. Product and packaging tailored to meet retailer’s requirement: Most of the big brands will have standard product specification at least nationally, if not globally. But as every retailer knows, those specifications are not suitable for every location. For example, the population in a particular retailer’s catchment area may be more comfortable with larger waist jeans, rather than skinny narrow waist jeans, which is main target for most well known denim brands. Further the type of packaging may not be appealing to the customers in retailer’s catchment area. Not only that the packaging may not meet his requirements, as a retailer, to store the product, it may also not be suitable to deliver to retailer’s customers. With private label, retailer controls the design, specification, material and other aspects of the product. Retailer can also customize the packaging as per his unique needs.Packing,packaging, attarctive packaging, essential packaging
  5. More control over pricing, marketing, sales and distribution: As it is his own brand and own product, the retailer can decide what marketing strategy will work best for his target customer segment and adopt that. He can decide the price at which he wants to sell his products. He can change the price as he sees fit. He can launch his own promotions and campaigns to increase the sales. This kind of flexibility is usually not available with national level brands.
  6. More profitability: The supply chain for private label is smaller than national level brands. Products come directly from manufacturer to retailer’s store or warehouse. All the margin after manufacturing costs goes to the retailer as against a smaller percentage that is usually fixed by the company for national brands. Since the retailer can change the price, he also controls the margin and turnover, thus retaining greater flexibility on the profitability of the product.
  7. Faster update to products: Customers can be finicky. Their taste change quickly. They get bored of the same product over time. With larger brands the feedback loop, development of new product and rollout of new product takes time. However, since with private label the chain is smaller, the new trends can be quickly analyzed. New products are developed with faster speed and quickly brought to the market. The private labels can be more responsive to changing customer needs as compared to national brands. Since the market for private label is smaller, the production run are also smaller, leading to lesser unsold inventory, in case the product does not sell. That’s a win win for the retailer.
  8. Virtual monopoly: This is a unique advantage for the retailer. His own branded products will be available only at his store. If they take fancy of the customer, the retailer is guaranteed that customers will come back to his store for more, as they are available on at his store. This not only creates a virtual monopoly but also creates an opportunity to sell other products that are stocked in the store. Private label products can indirectly leads to increase in sales of other products and of overall store.
  9. Value extraction of the brand value: If the retailer’s brand is well known and well recognized for the quality of the products and the service it provides, it should be easier for him to sell his own branded product. This is the hidden strength of the brand. The promotion of product, by simply labeling it as his own product, is great way to exploit a retailer’s well established brand value. However, great care needs to be taken that the new product being labeled is of equal or higher quality, for which the retailer’s brand is known for. If not, then the product may actually push the customers away, leading to brand value erosion.
  10. Harder for competition to match the specification and price of product: With full control of the product, retailer get the direct feedback from customer and incorporate those into his product. Same goes for all aspects of pricing, packaging, marketing, quality etc. The final product is a unique fit for his target customer base. There will be very little in the way of differentiation that retailer’s competition can offer, to pull the customer away from the retailer. A good private label product is a great way to lock customers to retailer’s brand.

 

Private label branding offers many more advantages. In a nutshell, private label branding helps retailer address the requirements of his customers with his own product offering which is tailored to their specific requirement and increases his profits. If the label (the brand) succeeds, it may even grow to a national brand.

Explaining Micro-Reduction and Processing

Seeds are great food. They are great additives to salads and other food items. They are not only a great source of nutrition; they also add a great flavour and crunchy texture to the food they are added to. But seeds are difficult to process from supply chain point of view. They are live. They are the source of life of new plant and contain the essentials for growth and nutrition of seedlings. They are designed by nature to sustain harsh conditions and yet grow into a plant when conditions are right.  However, this very advantage of theirs is the reason that they are favourite of bacteria (such as salmonella) and fungus as well. Seeds can develop pathogens at any time during their transportation and storage. The long duration of storage before they are consumed, makes them susceptible to develop pathogens at any time during their journey from the plant to the table. Not only that, during their journey there is a risk that the seed may die, losing essential enzymes and proteins and thus changing its taste. Because of these reasons seed processing and packaging requires a special setup for their supply chain management. An experienced 3PL would have a separate processing for seeds and grains to ensure high yield and high viability of the seeds, when it reaches to the table of the end consumer.

 

Seeds are grown and transported across thousands of kilometres. They move from the places where nature intended them to reproduce to places where human intend to consume them. The transportation to the place of consumption and place of consumption itself are harsh for the seeds and full of pathogens that seeds are not designed to sustain. Not only that, seeds collect waste, stones and sometimes metal pieces while being processed by machines. The net effect is that the yield of useful, edible, high quality seed is very low. There are numerous incidents when the whole batch of seeds has been rejected due to health considerations. The sterilization process controls the pathogens in the seed and enables the batch to meet the health and safety standards by following the below mentioned steps.

 

Large screening: The heavy contamination particles (stones, metal, droppings) are easier to remove. Filtering the seed through right mesh size and passing through a metal screen usual does a great work of removing these. However, for finer contamination, such as bird droppings, feathers, light weed seeds etc. the process is little tricky. The blow air technique is used to filter these. The seeds are passed through of flow of air. The air pressure is just right so that everything except the seed is blown away and just the seeds drop in the collection bin or for very light seeds, just the seeds are blown and collected and everything else drops in the waste collection.

 

Sterilization: There are various processes that reduce the bacteria, mould and general infectious substances in the seed. For example, fumigation is passing antibacterial fumes through the seed. While it kills the bacteria, it leaves small amount of chemical on the seed. These can be cleaned with water, but that brings its own challenges.  Dry heat processing kills the germs very effectively. Process the seed through very high heat for little time. However, this process is known to alter the taste of the seed. The seeds tend to retain the heat and get cooked (even if by a very small amount). Some seeds even die and change the texture completely due to heat. Dry steam processing is another technique that claims to give good results, but suffers from drawback of exposing the seed to very high temperatures and it also leaves some residual water on the seed. Though all the techniques are excellent, none of them offer high yield assurance with little or no change to the flavour and texture of the seed. Pasteurization, fumigation, irradiation etc. have not really met the expectation that customers have from a sterilization process.

A newer technique of organic micro reduction which involves using oxygen to kill bacteria like salmonella has much higher yield. The seed is coated with a liquid solution. The solution harnesses the power of oxygen to neutralize the pathogens and provides total coverage. The liquid then biodegrades leaving the seed unaltered. The seed is completely safe, sterilized, organic, raw and viable, just as nature intended it to be. The validated intervention system ensures application to every individual seed. The complete commercial system such as NEO PURE also includes the option of a dryer, where the seeds are coated with solutions that dry off faster to ensure completely dry consistent seeds, leaving a completely dry and viable seed. The process is used by many suppliers for almost any kind of non-sprouted grain and non-sprouted seed.

Repackaging and screening: The processed seeds are then packed into small quantity packing as required for retail. The care must be taken that the packing material is itself sterilized and free of all micro bacterial culture, and does not allow any water or air to pass into the packing, to the seeds during shipping and storage. The retail packs are then passed through a final metal screening to ensure that there is no metal piece that has escaped into the final outgoing product. This screening is usually done using x-ray technique which is harmless to the seeds.

 

 

So, as we see that seeds and grains are gaining popularity as food toppings, right from breads to salads; it is imperative that vendors adapt to newer sterilization techniques for better business results. With newer techniques of sterilization, the vendor can ensure that his seeds are safe, healthy and nutritious, when they reach the consumer and we all know that Happy Customers mean Happy Business!