INTRODUCTION
Packaging industry size is estimated at more than $125 billion and transport packaging amounts to about $40 billion
Transport packaging accomplishes one of the most critical functions of packaging since it adds to the value of the product by lowering the cost for customers to obtain possession of the product from its point of origin
The goals of transport packaging are relatively simple:
Safe shipping of the product
Optimum use of packaging material
Convenient disposal of the packaging material
Achievement of these goals has become increasingly complex due to an interplay of the following factors:
Customer needs have become more sophisticated
Product protection requirements are more stringent
Handling and storage are increasingly automated
Manufacturing cost has to be minimized
Ensuring full utilization of carrier vehicles
Compliance with regulatory requirements
Use of environmentally responsible and easy to dispose materials
INDUSTRY TRENDS
Consolidation is projected to thrive as a tool to increase competitiveness. This will result in fewer, but larger, companies and will further polarize smaller and larger firms
Companies are under pressure to improve their profitability. This is expected to be accomplished through such aggressive cost-cutting efforts as de-layering, outsourcing, and out-tasking
Sustainable competitive advantage would be built by focusing on the firm’s core business, while divesting all support functions
Breaking down of barriers between customers and suppliers through increased sharing of information
Producers of goods are evolving from being manufacturers to becoming facilitators that coordinate a group of key vendors to achieve organizational goals
Distinction between employees and suppliers are dissolving
Packaging industry suppliers will be paid not for the materials supplied but for achievement of such goals as number of units safely shipped and level of customer satisfaction achieved
IMPACT ON THE PACKAGING FUNCTION
Customers will reduce or eliminate packaging staff and other engineering departments
Packaging department within a company will evolve into a profit or quasi-profit center rather than a cost center
The role of packaging professional will become multi-dimensional with responsibilities ranging from product and package development to marketing and customer service
Package design will stop being a mere technical exercise within the organization. It will encompass marketing of the product, customer satisfaction, and addition of value
The definition of product and package will become more fluid and design of product, primary packaging, and transport packaging will be done in parallel, generally by the same group
REDEFINITION OF MARKETPLACE AND PLAYERS
Enterprises would become larger in size, but a small number of them in the industry would intensify competition
Smaller companies would form alliances with other companies of similar size and packaging needs to improve their competitiveness
A company would be served by several satellite companies and packaging materials and services would be provided by another such satellite company
The satellite company employees might share space in their customer’s facility, participate in meetings like a regular employee, and access information more freely than is currently done
The satellite companies providing materials, services, and equipment would establish alliances and partnerships based on synergies to help their customers reduce cost and improve profitability
The competitiveness of satellite companies would come from market expertise rather than product expertise
The successful companies would be the ones willing to take full responsibility for their customer’s entire packaging needs rather than just what they supply
The new packaging equipment would reflect this redefinition of the marketplace better in form of equipment designed to meet specific needs presented in a cooperative manner by material suppliers, designers, and converters
SHARED GROWTH MODEL
Customers should consider outsourcing packaging function to improve their cost position
Packaging material suppliers, equipment manufacturers, and package designers should explore synergies and opportunities for alliances to improve competitiveness and increase customer satisfaction
Packaging professionals need to look at their changing role and prepare themselves accordingly by increasing their knowledge base, taking on additional responsibilities representing a cross-section of functions, and thinking of them as profitable solution providers
BENEFITS OF SHARED GROWTH
Well-defined road maps to success
Long-term sustainable competitive advantages
Wide knowledge base encompassing industries, markets, and segments, enabling better service to the customers
Innovative and optimized product launches, improving prospects for success and sharing of profits by all