So how do companies achieve that delicate balance in finding the right packaging solution that is environmentally unfriendly and that eliminates unsaleables? First and foremost, design and test protocols should go beyond just ensuring that the packaging is robust enough to withstand unit-load transport from a manufacturer’s DC to a retail DC, Bodenheimer explains. “It has to survive the entire journey to be considered an effective solution. So the design and test protocol must include the entire supply chain journey. This would also take into account reasonable and normal handling practices throughout the retail distribution network.”
The robust database of information relative to the reverse flow can help companies make the right decisions as they contemplate changes in packaging. “Look at what you know from what has happened in the past so you can do the root-cause analysis to understand why things have gone wrong so you can avoid potential mistakes,” advises Bodenheimer.
Examination of the data can help you determine if there is a particular type of packaging material that has a higher incidence rate of returns due to damages, continues Bodenheimer. “Then you can do a deeper investigation into what is driving those damages and where they are happening along your supply chain. You can then drive continuous improvement initiatives to change the packaging or change the way it is handled or palletized.”
He points to a customer’s problem with one product line, where it was determined that the coverage on the pallets was insufficient, resulting in compression damage to cases. “We increased the deck coverage and that eliminated the compression damage. So this is an example of how data relating to damage or packaging type can help drive a decision to improve performance on the frontend.”
Inventory story: Inventory management is another area that can result in minimizing unsaleables while increasing sustainability efforts. Inmar helps clients understand the cause of problems in their supply chain relative to turns or inappropriate handling or shelf levels, notes Fanning. “We can help them identify items that may not be moving or that have code-dating issues. Doing this helps them minimize unsaleables such as products that have to be removed from the shelf because they didn’t sell in time or because they didn’t have the right amount of turns.”
Inmar conducted collaborative studies with manufacturers and retailers in several channels to examine what contributes to expired rates and discovered that rotation practices and inventory management are critical factors. “We have actually had a reduction across our client base in the food and beverage industry over the past three years of nearly 40 percent on damages and 30 percent on expired products because of many factors including the increased focus on optimal inventory management, packaging, and collaborative data analysis,” reports Small.
For unsaleable products that are unsuitable to reenter the primary channel for sale to consumers, secondary markets offer a good alternative, notes Bodenheimer. “This option offers the ultimate prevention of waste because the products are still being used as the manufacturer originally intended them to be used. This option also offers a substantial revenue stream. After all, the intent for any manufacturer in the CPG world is to get products into the hands of consumers for consumption.”
If remarketing is not a viable option, the product can be broken down into its various components such as packaging materials, the plastic or glass container storing the food product, and the food product itself. “Having a provider whose business it is to know what is recyclable and how to recycle in a cost-effective and compliant manner is essential to any returns program with sustainability goals,” notes Bodenheimer.
Reverse logistics providers have networks of various waste streams effecting the disposition process. For example, C.H. Robinson recently helped a manufacturer of mayonnaise dispose of the food product. “Instead of bringing it to a traditional landfill because it was out of spec, we sent the mayo to be used in an animal feed waste stream and we recycled the glass,” reports Iaria. “We try everything possible in our program to avoid landfill options at any cost. Our customers are also pushing us more these days to find better solutions that impact sustainability.”