Efficient supply chains: From quirky packaging to highly functional boxes
Designers can be awkward sometimes. Actually, they can be awkward a lot of the time. Something to do with the artistic temperament probably.
To be fair to them, their job is to make their work stand out from what is often an overcrowded marketplace.
So, as a result, in packaging design, for example, you see all sorts of shapes and sizes that could make life really difficult for the people who actually make the physical packaging.
This detachment from reality that some designers have can cause difficulties in all areas of manufacturing. It’s all very well designing something beautiful inside the make-believe world of zeros and ones inside a computer, but quite another thing to actually manufacture the figment of your imagination.
The main picture shows just some examples of the unusual packaging shapes that might make it into the real world, and who has letter-boxes shaped like any of those?
But anyway, creative or quirky packaging designs are actually hidden from view most of the time while in transit.
Typically, when it comes to e-commerce, a fulfilment centre or warehouse will put the product, along with its fancy packaging, inside a standard, cuboid cardboard box.
The only problem is that the box can often be far larger than the item inside, meaning that there is a lot of waste of space, which, in turn, means inefficiencies in the supply chain and logistics network.
Someone somewhere has to pay for the inefficiencies and it’s usually the end-customer.
Parcel companies generally charge by dimensions as well as weight of a package, so if the box is several times too big for the item it contains, then someone somewhere is paying money for literally nothing.
But now, a new generation of packaging machines can make boxes exactly the right size for the product they are to enclose, which could save fulfilments centres significant amounts of money.
Fulfilment centres are facilities – mostly warehouses – which will typically take delivery of a batch of products from a retailer, wholesaler or manufacturer, and take responsibility for the packaging and delivery.
Although it’s not immediately clear what the criteria are for FinancesOnline.com’s list of “top 20” order fulfillment services and companies, it does provide an insight into the e-commerce or “e-logistics” sector of today.
Top 20 order fulfillment services and companies of 2018
- Fulfillment by Amazon
- FedEx Fulfillment
- ShipWire
- ShipBob
- RedStag
- FulfillmentCompanies
- Fulfillify
- IDS Fulfillment
- VelocityShip
- Ships-a-lot
- Rakuten Super Logistics
- Fulfillment.com
- Fulfillment by Sears
- Xpert Fulfillment
- eFulfillmentService
- Fulfillrite
- Floship
- Whiplash
- Symphony Commerce
- Materialogic
Source: FinancesOnline.com
Not all fulfillment services companies are large enough, nor have enough revenue, to make investing in a box-making machine worthwhile, but some of them have annual turnover in the tens of millions, as must be the case with Fulfillment by Amazon.
The term fulfilment services is sometimes used interchangeably with third-party logistics, or 3PL, an older term meaning the same thing – a warehousing company that packages and posts things for you.
But as distinct from fulfilment services companies, 3PL companies usually have their own logistics operations as well – trucks and vehicles that can actually deliver the product – not just warehousing.
According to data collated by Armstrong & Associates and published on LogisticsMgmt.com, the top 20 largest 3PL providers worldwide by revenue are:
- DHL Supply Chain & Global Forwarding… $26.1 billion
- Kuehne + Nagel… $20.2 billion
- Nippon Express… $16.9 billion
- DB Schenker… $16.7 billion
- C.H. Robinson… $13.1 billion
- DSV… $10 billion
- XPO Logistics… $8.6 billion
- Sinotrans… $7 billion
- Geodis… $6.8 billion
- UPS Supply Chain Solutions… $6.7 billion
- Ceva Logistics… $6.6 billion
- Dachser… $6.3 billion
- Hitachi Transport System… $6.2 billion
- JB Hunt… $6.1 billion
- Expeditors… $6 billion
- Toll Group… $5.8 billion
- Panalpina… $5.2 billion
- Gefco… $4.8 billion
- Bolloré Logistics… $4.6 billion
- Kintetsu World Express… $4.4 billion
A longer list, containing 50 company names and revenue data, is available at LogisticsMgmt.com.
At the moment, the options available to a typical fulfilment centre are limited mostly to stocking boxes of many sizes and shapes.
These are generally supplied by manufacturers of boxes, who themselves could be more interested in the new, flexible machines.
There are at least two companies which build machines that are capable of making boxes of varying dimensions depending on the size of the product.
One is CMC, which offers something called CartonWrap (pictured above), a machine that the company’s UK sales manager, Steve Garbett, says can make boxes “unique to the product being shipped”.
This, adds Garbett, “eliminates the need to use void fillers and reduces volumes”.
The other company offering a similar product is NeoPost, which is famous for producing franking machines.
Audrey Williart, marketing manager for the company, says NeoPost’s CVP-500 machine (pictured below) is a “fit-to-size packing system which automates and optimises all steps of package fulfilment”.
It can do this for medium and large products of various dimensions, she says.
Williart adds: “The CVP-500 takes just seven seconds to build, fill, fold and label each parcel in one seamless process.”
The companies are reluctant to reveal how much their machines cost, but it probably depends on the configuration – each customer will have different requirements.
But with e-commerce booming all over the world, it’s probably inevitable that companies all along the supply chain will be looking for efficiency gains.
And what better place to start than making sure the boxes the end-customer receives are not mostly empty?
“There is a lot of waste of space in shipping which our machine can eliminate,” says Williart.
As well as fulfillment centres or 3PL companies, customers for these machines also come from the retail sector, but they do tend to be the larger retailers rather the small ones.
