Friday, April 19, 2024
Friday, April 19, 2024
HomeProcurement/Supply Chain ManagementSustainable Packaging and Its Importance in Supply Chain

Sustainable Packaging and Its Importance in Supply Chain

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Finding the appropriate materials and reliable suppliers is essential to enhancing supply chains and overall business efficiency since packaging plays a crucial part in supply chain management. While inadequate packing and labelling are some of the key reasons why locally produced goods cannot effectively compete with imported goods. In addition to enhancing product protection, good and sustainable packaging also boosts the brand, increases market share, increases firm competitiveness, and helps products penetrate new markets.

Additionally, organizations continue to set ambitious goals to enhance their business and ESG performance, with sustainability remaining the top subject throughout the packaging supply chain. This is further supported by a recent survey of package buyers from various industries, which found that while almost 75% of firms have made unambiguous pledges to sustainable packaging, less than 30% are adequately prepared to meet regional needs, much less internal objectives. Less than 30% of organizations also have clear KPIs for recycled material, sustainability, or recycling rates. Packaging has a vital role to play in the road to net zero both in improving shipping efficiency and in reducing its material and emission impact.

The expansion of the worldwide sustainable packaging market is being driven by an increase in demand for green packaging in the industrial sector. The ongoing wars and the COVID-19 epidemic have had a moderate effect on the market. In the future, the Asia-Pacific region is most likely to dominate this industry. By 2028, the market for green packaging is projected to reach $451.7 billion, expanding at a CAGR of 7.0% between 2021 and 2028.

What is Sustainable Packaging?

Sustainable packaging is an integral part of the ‘circular supply chain’. Green or Eco-friendly packaging uses raw materials and then restores them to their origins, minimizing waste of precious resources – like water and energy – necessary for their production.

Now let us see the definition of Sustainable Packaging:

 “Sustainable packaging is the development and use of packaging which results in improved sustainability. This involves increased use of life cycle inventory (LCI) and life cycle assessment to help guide the use of packaging which reduces the environmental impact and ecological footprint. “

Another definition addresses based on the three pillars of sustainability that are Social (people), Environmental (planet) and Economic (profit) is:

Effectively, “sustainable packaging must meet the functional and economic needs of the present without compromising the ability of future generations to meet their own needs”.

Some of The Sustainable Packaging Materials Include:

(1) Biodegradable Plastics

Biodegradable plastics are one of the most highlighted areas that could help with the current reliance on single use plastic packaging.

Also referred to as oxo-degradable plastics, they are beginning to be produced and sold in many countries, with society being led to believe they safely biodegrade in nature.

(2) Corrugated cardboard / paper-based packaging

One of the most sustainable and environmentally friendly packaging options is corrugated cardboard, along with other types of paper-based packaging.

It is easily recyclable by end users, biodegradable if it does wind up in a landfill, and the raw material is handled with care (in fact it is estimated that there are more trees in the world today than there were 100 years ago). In addition, how consumers view cardboard packaging can be important for brand positioning.

Corrugated packaging also has limits in some applications, despite the fact that it can be manufactured to offer great strength and performance.

(3) Compostable packaging/Starch Based Packing Material

It is a kind of sustainable packaging that is gaining popularity. While exhibiting the qualities and durability of conventional materials, it protects food products comparable to standard packaging. However, it completely decomposes in the ground to become healthy organic compost. Polylactic acid (PLA), which is generated from fermented sugars commonly derived from corn starch, is used to make starch-based packaging materials. Polystyrene-based products cannot be biodegraded, but PLA-based materials can.

Importance of Sustainable Packaging in Supply Chain Management

A flawless supply chain should be ensured using packaging, and sustainable packaging is no longer an option for small and medium-sized firms. Given that it serves as a protective carrier for things or goods during manufacture, sales, marketing, and distribution, sustainable packaging can play a significant part in the entire process. Product packaging safeguards completed goods as they move through the supply chain management workflow, particularly as they are transported to retailers and the final location.

Points highlighting the role of packaging in supply chain management

(1) Prevent delays because of non-compliance

There may be regulatory considerations to address with your logistics packing depending on the type of product being transported, transportation mode being used and where it will be shipped to.

If the products are being shipped to some European country, for example, there are some extremely specific guidelines for carrying palletized items, and not following them, might lead to shipment being held up at customs. It’s possible that it’ll be denied at the point of entry.

(2) Provides Product Safety and Increases Brand Visibility

Transportation-related goods damage or tagging is expensive. In addition to losing the cost of the item and the money used to ship it, a replacement often needs to be sent. Even worse, if it happens often enough, it may raise your overall logistical costs or damage your brand’s reputation.

There are several sustainable packaging materials available that are created by combining two or more biodegradable materials and offer durability and convenient handling during transportation and storage. This kind of environmentally friendly logistical packaging guarantees that goods arrive at their destination undamaged, cutting down on delivery lead time and costs.

(3) Increases the Convenience of warehousing and Storage

Some of the products spend time in a warehouse or storage facility between original shipping and delivery to the ultimate customer. In that case, having the correct sustainable packing material makes storage a lot easier.

(4) Easier and Smooth Product Transportation

Without good packaging, many products would be incredibly difficult to move. Take anything as simple as a pack of carpentry screws as an example. One could imagine trying to transport these products without putting them in a box or container first. The Packaging in this case not only provides in-transit safety but can increase product visibility.

(4) Important Information is Provided

Additionally, logistics packaging gives crucial information to people transporting your items as well as the end client. Some of the information may be as basic as “fragile” or “this side up,” while other information, such as instructions to store the item at a specific temperature or detailed handling instructions, may be more complex.

(5) Makes Supply Chain More Sustainable

The green or sustainable packaging can make not only outbound logistics sustainable, but it can increase brand awareness among customers and other stakeholders as well. Which will help organization achieving its sustainability goals.

Conclusion

Few people are aware of just how crucial product packaging is to the supply chain. A comprehensive approach to package performance, where the boundaries of the system span the whole supply chain, can enable cost effectiveness through increased transport and logistics effectiveness and decreased product waste. When it comes to packaging, which accounts for $1 trillion in yearly worldwide spending, sustainability goals are equally valid. In order to reduce carbon footprints and create circular supply chains to accomplish organizational sustainability goals, logistics and supply chain management professionals are increasingly focusing on their implementation.

Also read: Sustainable Supply Chain, Its components and Benefits

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Shantanu Trivedi
Shantanu Trivedi
Shantanu Trivedi is working as a faculty at the University of Petroleum and Energy Studies, Dehradun. He holds an MBA and a Ph.D. degree in Supply chain management. He has more than a decade of experience in teaching and research. He has published 2 books, 5 book chapters and more than 12 research papers and articles in international journals of repute. His research interest includes Supply chain management, agribusiness, online and distance education, Business sustainability and infrastructure management. He is the reviewer of many international publishing houses. He has presented his work and won awards at many research conferences and symposiums. He has worked on many research with state governments and the government of India. In his spare time, Shantanu loves to travel and explore nature.
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