38 PW JAN2022
THE BIG PICTURE
By Sterling Anthony, CPP, Contributing Editor
What Post-COVID-19 Supply Chains Portend for Packaging Those risks include slower recovery from a pandemic than what’s The concept of supply chains has been experienced by the U.S. and the Western world. Whatever the thrust upon the consciousness of the world configuration, package laboratory testing will be challenged to model due to a crisis brought on by COVID-19 and its variants. In the U.S., for the supply chain and to simulate the imposed forces and hazards. example, flotillas of container ships parked off major ports translate Another change will be increased amounts of inventories throughinto shortages and outages, fueling inflation. It doesn’t mean, however, out supply chains, as a buffer against future disruptions. Companies that most people understand what supply chains actually are. learned that, even when the causes of shortages and outages are A supply chain is the network of companies whose combined known by customers, goodwill and customer satisfaction still suffer. In contributions result in a finished product reaching a customer/ short, people prize delivery and performance. Increased inventories consumer. What constitutes a finished product is relative in that generate increased inventory-carrying costs. They run counter to “lean” one company’s finished product can be a component of another operations, an example being JIT (just-in-time) receipt of inventories, company’s product. By that lone example, supply chains can be (and which are placed quickly into production instead of into storage. frequently are) complex, and can stretch from local to global. Packaging can contribute to the containment of inventory-carrying Supply chains are dynamic, with their signature characteristic costs. The greater the amount of inventory, the greater its exposure being physical flows. That’s why supply chains cannot exist without to being damaged during warehousing. Damage can be inflicted by packaging. Value-adding operations convert raw materials into material handling, for example. Another damaging effect is static the vast variety of items that constitute the commercial stream. compression, especially on loads stacked on the floor, rather than in Those items must be adequately packaged to endure the handling, storage racks. Stacked loads don’t always transportation, and warehousing that are at the heart of supply chains. Companies learned that, even remain columnar and are subject to collapsing. Palletized loads comprise most The indispensable reliance that supply when the causes of shortages of the inventories in warehouses; therefore, chains have on packaging was argued in the integrity of tertiary packaging is my October 2018 column, “Packaging: and outages are known by essential to inventory-carrying costs. The Strongest Link in Supply Chain customers, goodwill and Transportation is a form of warehousing Management?” (read it at customer satisfaction still suffer. because cargo is under storage throughout pwgo.to/7415), and the the conveyance. The relationship is expressed fundamentals still exemplified by intermodal, containerized transportation, which apply. Nonetheless, the pandemic has caused such disruption that transpires across extended times. From a systems perspective, changes in how business is planned and executed are inevitable. inventory-carrying costs, and packaging’s effect on it, start prior to the Before launching into that discussion, however, a brief digression into arrival of inventory at a warehouse. the history of packaging and physical flows can lend perspective. In addition to physical flows, supply chains are characterized The phrase distribution packaging has endured for generations, by informational flows. Advancements in information technology reflecting its connection with physical flows. It predates the phrase (IT) will improve communications among supply chain members supply chain, which is of comparatively recent coinage, itself and increase overall transparency. On a related note, packaging has preceded by materials management, physical distribution, and logistics been an early medium for scanner technologies, to the benefit of (originally, a military term). The point is that throughout the evolution order placement and order replenishment. Informational flows are of phraseology describing disciplines devoted to physical flows, important to packaging procurement, given the limited practicality of packaging has been an enabling constant. having a ready product but lacking the packaging. Because packaging Knowledgeable sources warn that another pandemic will occur typically embodies multiple components, the unavailability of a single (a warning separate from, but acknowledging of, the specter of component can halt operations. disruptions caused by natural disaster, geopolitical upheavals, and Any crisis denotes having been taken by surprise. In harsher terms, the like.) Strategic planning of supply chains needs to reflect such a crisis results from failure of foresight, planning, and execution. certainties. Those plans, in turn, will carry significance for packaging. Preventing another supply chain crisis brought on by a pandemic Some supply chains will be reconfigured, even if it’s not feasible will be a priority of industry and government. As the aforementioned in the near term. An example: companies will rethink the degree changes, as well as others, are implemented, packaging must be to which offshore manufacturing, with its cheap labor, offsets the assigned its pivotal roles. PW costs and the risks associated with separation by distance and time.
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