The last few years have changed supply chains everywhere. Businesses large and small are facing this make or break moment where they have to find new ways to secure the materials they need to produce, and the logistics they need to distribute. No one out there is finding it easy when it comes to supply chains. But all that quick-fire transformation is magnified in the packaging industry. Companies that make the packaging all those other businesses rely on are being squeezed from almost every imaginable angle.
The packaging industry squeeze
So what does the packaging crucible look like? Check out our industry paper, Unboxing the packaging industry, for a detailed analysis. But here's a quick summary to give you the lay of the land.
- Raw materials for packaging are expensive and rare. Severe (read record-breaking) shortages in resin and paper pulp look set to continue, placing intense pressure on packaging materials innovation. Moreover, because the raw materials for packaging are light and fragile, transportation is both unreliable and expensive.
- And on top of all that, the social fallout of COVID-19 has changed consumer expectations in ways we'd never expected. Future Market Insights reported in its Feb 2020 White Paper, Four Keys to Unlock the True Potential of Packaging, on the conundrum of future packaging design, that looks set to become an agonizing balancing act. On the one hand, consumers want intensive personalization (right down to tailored QR code labels and near field communication chips that respond to nearby devices). On the other, they expect product down-sizing and simple, bare-bones packaging.
- As drop-shipping and a cornucopia of similar micro-warehousing commerce trends continue to take hold, the packaging industry will also need to somehow find solutions to rising counterfeit concerns — particularly for food and pharmaceutical packaging.
So, what's the solution?
Even if you're not at the helm of an industry that's directly involved in navigating the many facets of the packaging dilemma, there's a good chance the sheer intractability of all the above is something you can relate to — particularly if you have a complicated supply chain under your gaze.
Many CEOs and decision-makers have been searching in vain for a panacea for their company's supply chain woes. I mean, of course. Who wouldn't hope for that? It's entirely human and understandable to look for simple solutions to complicated problems, and sure-fire answers to pervasive uncertainty.
More than one CEO's strategic to-do list is dominated by the question, "what software or service will fix… all of this?" We know because we've been approached with that question more than once.
And we're confident our answer is the right one — even though it's a tough sell…
Are you ready for it?
The solution is that the whole package isn't a package
There is no black-box solution that can solve today's supply chain uncertainties. No cut-and-dried SaaS subscription or software package comes pre-built with the requisite human intelligence to perfectly prognosticate the endless variables that impact your supply chain.
As Mike Tyson famously said, "everyone has a plan until they get punched in the face." A pre-packaged plan or service on rails is the thing you hold onto until the swift uppercut of ill fortune informs your chin you should have ducked right.
The solution isn't a pre-formulated plan or product. It's smart people with their eyes open who see the big changes coming and know what to do about them.
If we can offer any advice to a CEO with a world of weighty supply chain decisions on their shoulders, it's that they should choose a 3PL that can work alongside their team as supply chain thought partners.
Forget about TMS feature sets or the size of the carrier shipment database. That stuff comes into play later on. But the crucial thing you need to keep responding effectively to the unknown variables … Is people.
The whole package isn't a package. It's people.
Entrust your supply chain to a team that understands that supply chain management and continuous supply chain improvement go hand in hand.
Go here if you'd like to learn more about our commitment to continuous improvement in supply chain management. Or contact us for a no-obligation consultation.