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 18: 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.
Packaging Complexity Management Tip 19: 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.
Packaging Complexity Management Tip 20: Plan for future legislation
Are you already planning for how you will introduce required future legislation?
No matter how well you manage your current portfolio, there will always be new challenges to drive further complexity. New aspects of legislation will arise, requiring new solutions to provide. At the time of writing these included:
- QR codes
- Tamper evidence
- Temperature monitoring
It is therefore worthwhile planning ahead for future legislative drivers and considering:
- How well are you sensing what is likely to happen in the future?
- What changes do you want to influence and how are you engaged in that influencing?
- How early do you mobilise to start introducing new capabilities?
- What alliances and partnerships do you need to establish to develop new solutions and supply strategies?
- How do you integrate necessary changes into normal business to avoid the incremental workload?
- How do you ensure packaging design activities are cognisant of potential future requirements?
- How do you track progress to ensure compliance is achieved?
This is the seventh 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.