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 12: Manage order quantities of components and finished packs
Have you got processes to effectively manage order quantities of components and finished packs?
Considering the previous tip on runners, repeaters and strangers, it is important to consider how volumes of components and finished products are managed through the supply chain.
Packaging operations are under high degrees of pressure to maximise efficiency. Where high volume runner products are present it is easy to produce in economic batch sizes and purchase commercially advantageous volumes of components.
However with stranger products, the preferred packaging batch sizes can often result in high levels of inventory of finished packs which are at risk of obsolescence through shelf life expiry. Often this results in repackaging activity to move product from one market to another prior to expiry. In addition the economic order quantities of packaging components can often result in high stock levels of components that have to be written off when a pack change is required.
It is therefore important to manage two dynamics to minimise the risk of obsolescence:
- Maximise the order volumes through pack or component sharing or postponement or late customisation techniques to increase stock turns.
- Consider the whole activity cost in setting economic batch and order sizes and thus reduce the batch and order volumes.
Packaging Complexity Management Tip 13: Postponement
Can you postpone customisation to as late as possible in the supply chain?
There are a number of definitions of postponement, but the one we will use here is the delaying of customisation of a product until as late as possible in the packaging operation.
There are many examples of this:
- Filing blank bottles or cans for stock and labelling when fulfilling a specific order.
- BIB/BOB (blisters in boxes, blisters out of boxes) e.g. producing standard blisters for stock and packing into cartons at a later stage into market specific packs.
- Assembling different combinations of standard components to create a unique pack variant for a specific market.
In all cases it can be seen that the goal is to keep the product as standard as possible for as far through the packaging operation, and then only make it market specific at the latest possible operation, perhaps against a specific market order. This can present a number of challenges for most operations:
- Additional quality system control to manage intermediate handling and subsequent further packaging operations.
- With fill and pack lines it can be necessary to remove the product part way through the operation and then run it down the line again at a later time to complete the packaging.
- Hand packing can be required for the final assembly of small batches.
- The design and characteristics of some products and components makes it very difficult to avoid making market specific until late in the process.
Packaging Complexity Management Tip 14: Late customisation
Can you late customise components and products?
Our definition of late customisation is the physical modification of standard components and products to add features or information, making them product or market specific. Examples would include on-line printing of content and over-labelling and may be undertaken downstream of the packaging facility.
On-line component printing is becoming increasingly common, but depends upon the type of component and information required:
- On-line printing of foils and labels is often undertaken, particularly if only requiring black ink.
- Equipment for near-line short-order printing of leaflets and booklets is becoming available.
- On-line printing of multi-colour cartons (particularly pre-glued) is more complex with fewer examples, although digital presses are increasingly used at print suppliers for short runs.
Over-labelling can vary between simple printed labels (pharmacy labels) to complex labels (e.g. including sealed pouches for leaflets).
A few considerations with late-customisation and over-labelling:
- How do you assure the quality of print for all components? A missing decimal point could have significant consequences.
- How do you ensure the line speeds are not significantly impacted? Is near-line printing a better option?
- Do on-line printing machines require different artwork files or formats? Where are these files stored and how does that impact your artwork process and system uptime?
- Can your MRP system provide the necessary breakdown of SKUs and components?
This is the fifth 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.