Unsaleables Rx : Look To Your Supply Chain

Unsaleables are more burdensome during these challenging economic times. Experts suggest a holistic, systems-based approach to eliminate unsaleables.


Packaging must withstand fast-moving conveyor systems, the impact of falling down conveyor chutes, and numerous vibrations throughout distribution systems. "Products must also be protected from the classic challenges of humidity and storage times," says Rupert.

The Center is currently researching better methods of using stretch wrap to stabilize and protect products as they move through the supply chain. For example, pre-stretching is imperative to prevent too much tension that can damage products. The Center is also studying patterns of stress distribution pallets must endure in rack storage systems. "When pallets bend under weight, this causes uneven stress distribution to some products," explains Rupert. For instance, water bottles manufactured with today's lighter-weight materials might have to bear two to three times more load than they were designed to withstand as a result of uneven stress distribution of a racked pallet.

MeadWestvaco (MWV) recently commissioned Genco to study and evaluate its packaging for the frozen food sector. "Products can go through seven different freeze/thaw cycles throughout the supply chain, which can cause product damage," says Michael Stuckey, director of marketing for food packaging for the Glen Allen, VA-based company. "Genco confirmed that the performance of our Custom Kote product is superior to competitive products in the marketplace."

Frozen food packaging is more susceptible to damage because of moisture migration that weakens the packaging during the freeze/thaw cycles, explains Stuckey. MWV's Custom Kote packaging uses unbleached virgin board with virgin fibers, which are longer and stronger and therefore hold up to the supply chain voyage better than competitors' products, Stuckey says.

Genco inspected 28,000 packages, with the charge to look for damaged products. "The key thing we learned is our Custom Kote is four times less likely to be damaged vs. a coated recycled board package," reports Stuckey.

This is because as paperboard is recycled, the fibers get smaller and smaller and are unable to withstand the demands of a freezer case. To provide extra moisture protection, MWV extrudes plastic polymers onto the paperboards. "We also have a Printkote HMR (high moisture resistant) product that is popular in the seafood industry."

MWV also hired Perception Research Services to examine consumer habits. The research company discovered that about 70 percent of consumers will walk away from a damaged product on a shelf, choosing another brand over their favorite brand if it is damaged.

Hannum explains that bottled water containers used to be made sturdier than they are today. "The bottles are thinner and once you drink the water, the bottles practically collapse on their own. They are not shipped in corrugate anymore, but just shrink-wrapped. So that means there is more pressure on the pallet now. As companies reduce weight and material from their packaging, it's becomes more important to understand how the products interact with pallets, load stability, and material handling equipment."

CHEP operates an innovation center where customers can test the viability of their packaging designs in a simulated supply chain.

Executive Sponsorship
The bottom-line effect of unsaleables is attracting more attention from the executive suite these days. "The grocery industry has to be creative in squeezing out savings in the supply chain year over year because of the industry's thin margins," notes Hannum. "Unit load design software technology didn't exist 10 years ago. This technology offers companies significant cost-savings opportunities. When you talk about percentage-point improvements relating to billions of unit load shipments, the savings can really accumulate."

Food manufacturers are collaborating more with retailers to improve effective promotion timing so any residual inventory does not end up as unwanted product. "Better collaboration might help move those products to the consumer because they have nothing to do with damage," reminds Mike Umbach, group vice president, product development and marketing at Inmar. "Any effective program to reduce damages and improve the business-to-business practices that could lead to unsaleables has to have executive sponsorship."

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