In this blog series I’m looking at the, often very necessary, issues of product packaging complexity and how these can be addressed via appropriate product portfolio, optimising the packaging facility design and examining key attributes of product packaging.
In part three I offered my top tips on what should be considered to drive maximum value out of your packaging portfolio. Here in part four I examine the packaging facility and offer my top tips on optimising the facility design to deliver optimal service levels at minimum cost.
Tip 6: 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 are 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 presented in this blog to minimise variation, increase pack or component sharing, or introduce postponement or late customisation techniques, can assist in managing the disruption created.
Tip 7: 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:
1. Maximise the order volumes through pack or component sharing or postponement or late customisation techniques to increase stock turns.
2. Consider the whole activity cost in setting economic batch and order sizes and thus reduce the batch and order volumes.
Tip 8: 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 to create 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.
Tip 9: 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?
Tip 10: Build flexibility into packaging equipment
Have you got the right type of packaging equipment that provides suitable levels of flexibility?
It is often tempting when specifying equipment to specify the fastest packaging lines. Indeed, due to being pressured for ever increasing levels of efficiency, most packaging operations would love to be producing high volumes of few variants as fast as possible. However, as we have discussed, the healthcare marketplace is increasingly not like that, as volumes are decreasing and complexity is increasing. It is therefore important when specifying packaging equipment to ensure that the correct criteria for how the portfolio needs to be supplied are defined and agreed. Trends are driving this towards much more flexible machinery that can be easily changed for different pack formats, with the ability to insert specific modules when required (e.g. serialisation printing modules), or the ability to split fill and pack lines to permit part packing. Due to the capital costs required, it is unlikely to be feasible to reequip packaging facilities at a later date. Therefore, making the right choice of equipment to support your expected portfolio and supply strategies is a critical strategic decision.
Tip 11: Reduce line changeover time
Have you maximised your opportunities for fast changeover?
Line changeovers are non-productive time and in a world of increasing complexity and product variants, the amount of changeovers increases and so lines can spend significant amounts of time not producing product. This reduces capacity and increases cost. There are three parts to a changeover; clean-down, set-up and startup, and all can be improved through the application of operational excellence techniques and product and equipment design. There are four steps to consider and many opportunities with each:
Eliminate non-essential operations: for example standardise component sizes, reduce the range of tooling, equipment modifications like adjusting only one guard rail instead of two.
Perform external setup: for example have all of the changeover materials and equipment ready before you start, use pre-assembled modules.
Simplify internal set up: for example use quick couplings, scribe marks, jigs, hand knobs rather than nuts and bolts.
Measure and improve: continue to look for opportunities, hone your process and keep training. A changeover should be like a racing car pit stop.
Tip 12: Supply chain design and hubs
Have you optimised your supply chain to provide required levels of variation and customisation?
In coping with complexity, it is necessary to think not just of what must be done and how, but also where. To minimise obsolescence the goal should be to make products and components market specific as late in the supply chain as possible. To achieve this, a different approach to the design of the supply chain may be required. Postponement and late customisation activities are production activities and therefore must be undertaken with appropriate GMP processes and facilities. You therefore need to ensure that such operations are being undertaken with appropriate levels of control and therefore undertaking such tasks within warehouse operations may not be appropriate. Conversely, as most markets are supplied from many packaging facilities, providing the local market-specific requirements from each factory can be an unwelcome complexity burden at each factory. Ensuring that activities are undertaken at the appropriate points in the supply chain is therefore another key part of managing complexity. The concept of regional hubs can help provide appropriate solutions, where the hub supplies a group of local markets with market-specific product created from a stock of standard and customised components supplied from the factories.
Tip 13: Outsourcing
Have you considered outsourcing the things you are not best equipped to do?
Another facet of the design of your supply chain is the ‘make or buy’ decision. It may be tempting to try to keep all of the volume in house, but considering the concept of runners, repeaters and strangers, you may not be best equipped to deal with all. If you have a high-volume facility, it may be better to outsource the strangers to a packaging third party who can cope with an unpredictable product and infrequent orders. Alternatively, you may want to keep all of the specialist and unusual product in house and outsource the standard and repetitive volume. Also, considering the overall supply chain design, there may be geographic areas where you want to customise product but don’t have internal facilities available locally. An outsourced partner may be able to provide an appropriate regional hub. The important consideration is that you don’t have to do everything yourself and external partners may be better suited to solving the challenges you are faced with.
In my next post in this series, I will be exploring the topic of product packaging, offering my top tips on standardising brand, component sizes and templates and the importance of looking ahead and planning for future legislation.
Should you have any questions about this or any of my other blogs, if you would like to discuss the packaging complexities within your company or would simply like to request a copy of my booklets, please don’t hesitate to contact me directly on my email Andrew.firstname.lastname@example.org