Packaging risk management trends

Demand for stretch film is set to increase around the world. From production to marketing, the profitability of goods is only as strong as its weakest component. In order to manage consumer expectations – incorporating both the production and shipping of goods, each facet of the supply chain must be considered – including workflows, quality standardardization and procedures such as managing packaging risks – procedures that may seem negligible.

Stretch film demand to increase with improved supply chains

Packaging plays a larger role in business than many people may think. The successful and speedy production of an item can be eradicated if not secured and transported properly. Foreign bodies can enter a box if it is not properly sealed, as can outside objects potentially damage the integrity of the package if not well assembled. Think about the production of the foods you purchase at your local grocer – the electronics that you trust have not been compromised by weather during transit – and the holiday decor you expect to arrive at your home in pristine condition. Each of those products you just thought of use varying packaging strategies – both to protect the product itself as well as to be transported from point A to point B.

In addition to the considerations mentioned above, a company must consider budgetary allowances.  Using too much packaging material, or the wrong commodities for the application, can have devastating effects on the security of an item – as well as the bottom line. The value in strong packaging solutions rests in the ability to accurately balance both cost and efficient packaging.

Managing packaging risks

Packaging Digest explains that the most effective manner to assess value in a supply chain comes in being able to label the areas of greatest risk. According to The Chief Supply Chain Officer Report (Lee, O’Marah, John, 2012), more than 80 percent of the 1,400 Supply Chain leaders surveyed reported disruptions over the past two years, with more than one-third experiencing lost revenue, profits and/or market share. More than two-thirds of respondents fear the potential of “shipping disruptions, incidents at supplier facilities and the failure of key suppliers…to negatively impact their business during the next 12 months.” Through collaboration and evaluation, the efficiency of a company to implement workflows managing such risks proactively (rather than reactively) and allocating budgetary spend accordingly can minimize and reduce the risks associated with disruptions within the supply chain.

“According to the Chief Supply Chain Officer Report, more than 80 percent of the 1,400 Supply Chain leaders surveyed reported disruptions over the past two years, with more than one-third experiencing lost revenue, profits and/or market share.”

Stretch films helping mitigate packaging risks

Palletizing and securing loads via corner protectors and stretch film is a commonplace shipping practice.
Because of the ability of stretch film to address various packaging risks such as load stability, product tampering and reduce the occurrence of worker injury, stretch film demand is expected to grow around the world. The December 2011 study by the Freedonia Group indicates that demand for stretch film is expected to grow by 3.3 percent through 2015, reaching a market total of about $2.4 billion. Low-density polyethylene is expected to hit 1.9 billion pounds in 2015, marking a 2.5 percent annual increase. One of the major drivers of growth for these films will come from the storage and distribution markets. These sectors tend to make frequent use of pallet storage units, and as a result, have a high demand for material.

Growth in Europe

The United States is not the only country in which there is anticipated growth. Many Western European countries are expected to increase their demand for polypropylene films, according to a recent report by PCI Films Consulting Limited.

While the entire continent only anticipates seeing growth of about 1 percent per year through 2017, the Western European market is expected to make up almost 50 percent of this growth. This news comes as more multinational food packing companies change their business strategies.

While the films examined in each study differ, they both play important roles in helping companies mitigate risks along their supply chain. These films are commonly used in either storing food or securing pallets, but in both cases their job is to ensure the safety of a product for the customer. As more companies seek to limit risk and find value in their processes, these kinds of films could play a huge role in their success.

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