Are You Winning the Supply Chain Tetris?

Some of my readers sent me questions about my post on how the Dutch East India Company (VOC) not only used the synergy between packaging design and logistics but also established a symbiosis among the supply chain links to enhance the chain and asked me to expand on the synergy between packaging design and logistics and the symbiosis among the supply chain links. So I will discuss the synergy between packaging and logistics in this post but will cover the symbiotic effect that comes from the collaboration among the supply chain links in a later post.

When I think about the synergy between packaging and logistics, the game Tetris comes to my mind. In this game (Tetris), the player must optimize the space with blocks by rotating and placing them without gaps. These blocks come in 7 shapes and fall one by one while the player orders them as quickly as possible. If the player does not optimize the space, the buzzer goes off and it is game over.

Drawing a parallel to cold supply chain, you can think that your products are the shapes that must be ordered for distribution (inbound and outbound). If you do not use the space properly for these high-value biotech and pharma products and leave empty spaces and/or add excessive non-value added packaging components (e.g. thermal insulation, refrigerant, dry ice, etc), the load density decreases and you will not only be paying high dollars but also adding risk to your distribution. Unfortunately, managing biotech and pharma cold chain supplies is more complex than playing the Tetris game because the biotech and pharma products are not limited to 7 shapes and they evolved (i.e. new products, different temperature requirements, last-mile distribution varies per country, etc) so the optimization is not as easy as the game and one must be careful to avoid a game over scenario (i.e. product lost, excessive operating costs, etc). The goal must be set to reduce the landed cost and minimize the risks. Only through collaboration with your supply chain links you will enjoy a robust and resilient supply chain where you can not only measure the benefits in your landed costs, but also in emission reductions, shorter transit times, smaller packaging waste, etc. Below are a few considerations that must be taken into account to reduce empty or misused space. Evaluate your supply chain (transportation, warehouse, etc) in terms of unused or misused space because those are savings opportunities. A sound approach (described in previous posts) is design from the outside in rather than from the inside out. If you have some flexibility in your stability requirements, incorporate them into your package design (or re-design). Shipping containers designed to protect products left unattended for extended periods in extreme weather conditions are over-engineered so you must collaborate with your freight forwarder, carriers and ground handlers, customs agents, etc to have a well-lubed chain. Storing a shipping container with frozen and refrigerated gels into a refrigerator does not allow the frozen gels to be thawed, so the risk of freezing the product is greater. Develop pack-out diagrams to identify product and package configurations as they flow in the supply chain. Limiting these pack-out diagrams to the warehouse packing process is common in most industries. The goal is to maximize the load density during distribution, especially in the transportation mode that has more limitations (usually airfreight and within the airfreight the narrow body aircraft) or is more expensive. There are many software programs that can easily find the unused space (short list provided below). Identifying the misused space is more difficult and optimizing to the minimum amount possible of non-value added packaging requires an orchestration of knowledge, communication and collaboration from all supply chain links. http://www.capesystems.com/index.htm http://www.topseng.com/index.html http://stackbuilder.codeplex.com/ http://www.koona.com/qpm/ http://www.magiclogic.com/ http://www.logensolutions.com/default.html http://www.iris-it.com/en/products/robotics/palletization-software.html http://www.cubemaster.net/Subscription/home.asp Squeezing out the empty space around components inside product cartons, boxes, shipping containers and trucks to maximize the load density can be performed with one of the following software programs. Packaging experts have a variety of solutions to support the landed cost reduction efforts without increasing risk (physical or thermal damage). Changes in insulation material, corrugated board specification, flute orientation, etc are tools available to packaging engineers that must be included in the design and validation to prevent an increase on the risks. I leave you with some questions to test your knowledge about your packaging and unused space in your supply chain. What is the product /packaging ratio in terms of volume and weight? How is your packaging perceived by your carriers and customers? Have you collected the feedback of your supply chain links and shared it with the packaging group? What metrics are you using to evaluate your suppliers and the available containers? I am looking forward to hearing your comments and questions. Until next time,