What is packaging?

Packaging is defined as a science and an art; it’s more of an art when we are talking about consumer products and more of a science when we speak about industrial products. When we talk about cost improvement there are lot of conflicting requirements. A packaging designer is like a Jack of all trades. One has to look at the requirements of a carpenter, from the angle of costing, the vendor who should be able to supply; then there is the manager or owner who looks at total profitability and product safety, the packers their own safety while packing. Then the ease and safety of unpacking at the other are concerned about end and being tamper-proof in between.

Next is the transporter – he looks for convenience loading and unloading operations in terms of speed and time, and maybe not too concerned about damaging the insides. Also the geometry of the product affects the container. If a choice is given one may like a spherical container. But this may not be possible for a triangular part. Then comes the storage and handling at the warehouses, docks, airports while in transit. You need to communicate how the box is to be stored, which side is up and so on. There is an international cargo marking accepted by all countries and this must be used on the box to help communication. There was a cargo – a goddess with four hands, a weapon in one hand, blessing from the other. These were packed in boxes but no arrow was put to show which side was top and which side to place it on. Naturally it was handled and stored roughly and some damages took place.

The retailer wants aesthetics – it helps his turnover. If you fall in a love with a package, you do tend to buy the product. This is particularly true in supermarkets. There is no salesman to tell you that the packing may not look good but the product inside is good. You just pick it up from the shelf as aesthetic packing attracts you. This is important for the retailers economy for he does not worry about what you pick as long as you buy something from his store.

All these above aspects, which need to be considered in involve packing costs. You may dump the product inside with good thermocole packing and say it is protected. However, this is only one of the requirements – other aspects will also incur costs. The cost will depend on how much importance you give to safety, aesthetics, handling, storage, etc. Generally, 80% of the packing costs goes towards meeting customer convenience and requirements and the remaining 20% is used in other aspects of logistics. If you consider lipsticks, the cost of the product much lower than the cost of packing. Many consumer products fall in this category.

Regulations also have to be considered in packing. Wood is the cheapest and commonly available material but certain things cannot be packed in wooden boxes due to regulations. Eco-friendly, easy-to-dispose packing material must be used. You cant tax nature, you cant tax the environment. You have to conserve energy.

Costs Involved in Packing 

Now let’s see what are the costs in packing. One is the primary cost, the material cost which is the major cost. Then is the cost of designing the packaging and capital cost for carrying out the process. Labour is recurring cost. Indirect cost are overheads, insurance, R&D. When we talk about reducing cost it can be in any of these above components provided the performance is the same.

Remember one thing – increasing the cost may not always improve the value. If you come to me for damage reduction or improvement in packaging, it’s not necessary that I may increase the packaging cost. For example, if in a wooden box, you are using the skids of dimension 4×3. The skid is the lowest component of the wooden box that touches the ground and it is like a shoe. It takes all the weight – 1 tonne, 5 tonnes, 10 tonnes. Now, if you increase the cross section along the height, it becomes stronger. So I tell you to use 4×3 instead of 3×4 – there is no increase in cost, only a reorientation, but performance improves. Similarly in corrugated boxes you have 150 x 5 ply, which could be reduced to 130 x 5 ply if there is no need for weight bearing capacity. Then again, exports are generally preferred in white or silver coloured wood. You can use softwood instead of hardwood, which is heavier, as long as performance is not affected. So it is not always that improvements in packaging incur costs.

In the process of reducing cost by value engineering, we try to separate unnecessary cost from necessary cost, without affecting the performance. The hidden problem needs to be defined. If a box breaks it could be a problem of wood, nail, thickness or design. In some cases I have seen people use 1.1-ply corrugated boxes. Now, beyond a certain ply, strength does not increase. So define what is the required strength and meet it – this is done in value engineering.

There is some cost involved in standardizing. A 200 gms potato chips pack is made out of the polythene. It has certain dimensions, and the cost is say, 60 paise. What is the performance requirement for potato chips? One is compatibility between the food product and the plastic packaging material. Shelf life of a product, i.e. within how many days you can eat the product is another aspect. So normally there is an expiry date written on it. Now if the shelf life is two months for potato chips, the marketing manager will be very happy because he will have two months time to sell the potato chips. But if you reduce the shelf life of the product to eight days, he will have to sell it within 8 days. Lesser shelf means reduced packaging costs. So see as far as possible that the shelf life requirement of the product is reduced in case of consumer products.

Then there is the aspect ofmachinability – it may have good compatibility and good shelf life but doesn’t work on the machine. Years ago somebody brought one product in India, paying a lot of money to a foreign consultant. It was a composite container for liquid products – edible oil or petrol oil. Now that product simply could not be produced in India because of humid conditions. This was a problem ofmachinability. It was changed from LDP to HDP film.

Next is the mechanical strength. A pouch used for potato chips should not break when dropped, the seal strength should be high, it should not tear, it should not puncture. Finally, you require aesthetic appeal for packing potato chips.

So we need to decide the most important amongst all the above aspects i.e., shelf life, appeal, machinability and compatibility. We could then have high density plastic or laminate aluminum or transparent plastic. These are all the alternatives in brainstorming. Somebody talks about paper only. A cost index can also be worked out with appropriate weightage. The next possible alternative could be plastic and so on. So this is how we evaluate the performance of all the materials and determine their costs and rate them.

One more requirement all over the world is to reduce the packaging weight as much as possible. Use expensive material, but reduce the weight. In the last two decades, Canada has reduced the packaging costs by 50%.

Then there could be the latest alternatives like wrapping with stretch film. We have seen the stretch film in airlines – you get fruits wrapped in as per government regulation. plastic films, which are transparent. These wraps are is water proof, moisture proof, dust proof. Or you can have shrink film – shrink wrapping, where a product is put in a plastic bag and the plastic bag shrinks on to the products. This is done at a high temperature so you require a heating tunnel for shrink-wrapping.

There is a relation between packaging cost and the damage done to a product. It’s a very important relation which we use in cost analysis. For different alternatives we determine the packaging cost and the percentage of damage through simulated laboratory testing for draw compression. Then we plot a graph of total cost of versus percentage damage. This can be useful in determining the cost versus damage percentage when deciding on the best packing material.

Certifying and Testing Materials 

IIP (Indian Institute of Packaging) is involved in many activities viz. certifying and testing materials. People use this certificate repeatedly for different purposes. That is why in all the certificates there is one clause stating that there is no legal binding on IIP to certifying this material. But now we have a different plan for certifying vendors. We will give inputs to the vendors. So if we certify that a corrugated box supplier is an IIP member, it means you can blindly take material from him. You will have no quality problems. In order to ensure this we whether the vendor has got good manufacturing practices, good storing facilities, good layout, good machinery and good manpower requirement. We help in upgrading his information by conducting 2-3 programmes in a year. We now have about 100 certified members. We will allow them to use our brand for marketing their products after specifying some conditionalities.

We have a team of experts on food technology, plastic technology etc. So if you have any problem please write to us. Even if our panel of experts cannot solve your problem, our associate members will help you.

Total Life Cycle Management 

Like certification, another important emerging function is total life cycle management. Green packaging is one of the components of the total life cycle. In the total life cycle, the environment is affected by using the resources for converting raw material into packaging material. This packaging material is then loaded into a container, transported and finally disposed. So how much energy is utilized, how much air is polluted because of all components and process in the life cycle is analysed. IIP is opening a cell where all these studies will be carried out. As far as the green revolution is concerned, we have done a national survey on environment friendliness that can be applicable to the packaging industry. And we have also come out with guidelines regarding which materials must be used in Europe and other developed countries, and at what cost. For environment friendly material, the tax is very less. Germany is very strict, they will not accept any material if it is not environment friendly. Other countries accept wooden boxes, but the tax is higher. Because they have to either recycle the refuse, or reuse that material. The condition is that you do it at your cost or we will do it at your cost. So that way the indexes are worked out. So we give the guidelines – if you are sending to this country, your packaging materials are graded in these indices. Because of the MNCs, global trade, a number of trends are coming to India regarding environment friendliness. In Japan you cannot use cello tapes but only paper tapes. Paper is environment friendly while cello tape is not. Also corrugated boxes are permitted, not thermocole. Now the entire electronic zone they get all guidelines from the importing countries and those guidelines are definitely adopted, so that way the green revolution is imposed on us. If I were to tell you, you will say no – first talk about the cost. It increases my cost if I use paper tape. If I say don’t use polythene, use only paper tape nobody will look at me. That is our national problem and my corporate problem. But when it is forced on them they will use it.

Examples 

Now let’s consider an industrial product. A leading manufacturer of ceiling fans was using wooden boxes. Twenty five years ago they approached IIP and jointly we designed a corrugated box which was more expensive than a wooden box. Though the packing cost increased, they did not mind changing over from the wooden box to the corrugated box. Also the customer found it more easy to handle a corrugated box. So there was customer acceptance. After a few years the same people came to us and we changed the packing material to thermocole – again the cost of packing went up but productivity and customer satisfaction increased, so sales went up. The fan manufacturer is Crompton Greaves.
Another example is that of a consumer product. One kulfi seller in Chowpati in Mumbai was selling kulfi a leaf for Rs. 4/-. Then he was inspired by some packing material to make a nice cone from high impact thermocole. Now he was selling kulfi for Rs. 3 and his sales also increased. Today he has a very popular kulfi shop in that area. I have not visited him but he has consulted us for the package design.