The Impact of Packaging on the Supply Chain
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Packaging plays a key role in the supply chain, and it can be a pain point for many business owners. First, because of the total packaging costs in the supply chain and, second, because of the effect damage during the transportation can have in the total packaging cost. (Related Topic: protective packaging, VCI paper, moisture barrier bags)
For example, those businesses that invest in individual packaging for their products have to deal with higher material costs. However, thanks to the individual packaging, they are allowed to enjoy lower transportation costs. Naturally, the total annual packaging costs get higher when a packaging solution with higher material costs is chosen. Further, if a product gets damaged during the transportation, it will have a massive impact on the total packaging cost.
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Being able to guarantee the reduction of the damage of a product during transportation will – almost automatically – increase the customer satisfaction and customer loyalty, which is why it’s so important to invest and focus on using protective packaging that is effective for your logistics and transportation strategies.
Cost is one of the most important factors when it comes to analyzing the impact of packaging on the supply chain. In fact, packaging will have an impact on every stage of the process including the final cost of the product itself.
For example, every time a package is received and dispatched, again, additional costs are added up, revealing many hidden costs in the supply chain. Therefore, taking all of these seemingly small issues into account is key to guarantee the profitability of your operation. If one element of the supply chain fails, the whole operation could be a disaster.
But going beyond the cost implications, packaging has a direct impact on the customer and final consumer; and it is precisely this relationship between product and consumer what can make or break entire businesses. If a business operation fails to set up a packaging strategy that meets industry standards, the chances are products won’t make it to their destination in the optimal conditions customers expect them to be, potentially hindering forever the perception consumers have about a certain brand or product.
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