Stock Keeping unit (SKU) and packaging component portfolio control is a critical activity for organisations. Ensuring the correct balance between a commercially advantageous portfolio, whilst minimising unnecessary pack and component variants is a challenge faced by many healthcare product companies as they grow their product range and expand into new markets. Therefore ensuring there are decision making processes in the organisation to manage required levels of complexity is a key aspect of effective pack management.
In this blog series I will describe key features of a complexity management capability in an easy to digest format. I hope you find this information useful. We are always searching for ways to improve our work, so if you have any feedback, please do not hesitate to contact me at Andrew.Love@be4ward.com.
Packaging Complexity Management Tip 9: Share components or packs
Are you maximising the opportunities to share components or finished packs?
Shared components and packs can provide a great opportunity to increase component and pack volumes. However to make this happen it is necessary to identify markets and products that can successfully share components or packs.
There are a number of criteria that you should consider when looking to group markets for sharing. These include geography, languages, regulatory rules, regulatory approval timelines, and sale price.
Choosing markets to share products needs to be considered carefully as it requires close collaboration between those markets when changes are being implemented. Therefore it is better to have consistent groupings of markets rather than vary the sharing groups by different product. Standard market groupings also simplify the ‘where used’ assessment during the change impact assessment.
A significant challenge with shared packs comes when there are different approval timelines or locally driven changes. This can result in more than one version of the shared pack being required; effectively driving you back to market specific packs.
Packaging Complexity Management Tip 10: Bundle changes
Are you maximising the opportunities to combine changes to minimise the frequency of changes to components?
The concept of ‘bundling changes’ is the grouping of multiple different changes affecting the same pack or component together to change the pack only once.
An analogy that many of us are familiar with is that of road repairs. How often does the water company dig the road up one week, for the gas company to come and dig it up again a week later? The purpose of bundling changes is to minimise the frequency of change to components by coordinating changes together.
To be able to do this, you need to have an understanding of all of the parts of the organisation where changes can be triggered from, and a single shared forecast of required pack changes for each product. This is often maintained by the product strategy team, giving visibility of who wants to change what and when.
It is also necessary to understand which changes have mandatory timelines and which changes have latitude in timing so that they can be combined. One of the biggest challenges in managing bundled changes is keeping dependencies aligned, particularly if some of the deliverables are outside of your control.
To assess how well you are managing to bundle changes, measure the frequency of change for each brand, country, SKU and component type to look for opportunities to improve.
Packaging Complexity Management Tip 11: plan for runners, repeaters and strangers
Do you have capability to supply product with different order and volume profiles – runners, repeaters and strangers?
Products can be classified into three groupings:
- Runners: products that are produced very regularly.
- Repeaters: products that are produced or packed frequently, but not every week or month.
- Strangers: products that are produced very infrequently.
The concept of runners, repeaters and strangers provides an excellent method for production scheduling and supply chain management. Runners typically provide the bulk of the stable packaging volume permitting high line run times and often dedicated equipment. Repeaters don’t justify dedicated equipment, but occur frequently enough to allow scheduling with runners and still packaged in reasonable batch sizes.
Strangers present a greater challenge as their infrequent nature and small overall volume make them challenging to build into the production schedule, produce in economic batch sizes and manage component supplies.
Supply sites will normally have to produce products for all three groupings, and increasingly an individual brand can have all three types of product. It is therefore necessary to have the capability to schedule and pack all three. The application of many of the techniques in this booklet to minimise variation, increase pack or component sharing, or introduce postponement or late customisation techniques can assist in managing the disruption created.
This is the fourth of a series of 7 blogs giving a view of methods to deal with packaging complexity. Should you have any questions about this or any of my other blogs, or would simply like to request a copy of my booklets, please don’t hesitate to contact me directly on my email.