CHAPTER 11

Packaging and Materials

Handling

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 Product Characteristics
• Physical Characteristics
– Form of the materials; substances exist in three forms
(solid, liquid, and gas)
• Each has specific packaging requirements
• Metal cylinders are one method for packaging gases, while
metal pails can be used for packaging of liquids
– Ability to withstand exposure to elements
• Coal piles can be exposed to rain, whereas salt piles cannot
– Product density (weight for volume)
• Cotton vs steel
• Can food vs garment
– Respiration
• Characteristic of some goods change while they are moving
in logistic channels (give off gases and moisture, and
generate heat) - fresh fruits and vegetables
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 Product Characteristics
• Chemical Characteristics
– Incompatible products (products sensitive to ethylene
-broccoli, lettuce, water melon - should never be held
for more than a few hours in the same area with
products emit ethylene - apples, pears, and tomatoes)

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 Product Characteristics

Characteristics must be
made known to consumers
to make them the correct
buying decisions

Figure is portion of fabric-

care label goes on Levi’s
jeans sold in Japan

Inform consumers how to

handle the product such as
no chlorine bleach, iron at
the medium temperature

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Product Characteristics

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 Packaging Fundamentals
• Packaging
– refers to materials used for the containment, protection, handling,
delivery, and presentation of goods1
• Building-blocks concept
– Very small unit is placed into a slightly larger unit, which then
might be placed into a larger unit, and so on
– Each of the different building blocks is inside another and their
total effect must be to protect the product
– They function in a complementary sense; for example, when a
consumer-size package is very solid, the larger packaging elements
require less-sturdy packaging materials because the smaller
packages themselves are sturdy (e.g., food cans vs lightbulbs)
1Logistics Dictionary, www.tntfreight.com

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 Packaging Fundamentals
• There are a number of packaging
fundamentals that organizations should be
aware of
• Some of the many packaging fundamentals
include:
– Functional trade-offs
– Package testing and monitoring
– Labeling

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 Packaging Fundamentals
• Functional trade-offs
– Packaging serves three general functions
• To promote
• To protect
• To identify (label) the relevant product
– Packaging design decisions involve a number of
departments within an organization
-Engineering -Quality Control
-Manufacturing -Transportation
-Marketing -Warehousing
– Upstream and downstream supply chain members
involve packaging design decision, as well

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 Packaging Fundamentals
• Functional trade-offs
– Which entities drive packaging design process
• Marketing – prefers attractive package design
• Quality control – prefer minimize loss and damage
• Attractive packaging might encourage consumers to
purchase a product, the attractive packaging might
increase the chances of a product being stolen
• Transportation and Warehousing – interested in
packing design that minimize the amount of package
container’s excess space

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 Packaging Fundamentals
• Package testing and monitoring
– Three important kinds of information needed to
properly design protective packaging system
• Severity of the distribution environment
• Fragility of the product to be protected
• Performance characteristics of various cushion
materials
– Advisable to have new packages pretested
• Packaging material manufactures, independent testing
laboratories

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 Packaging Fundamentals
• Package testing types
– Vibrations
– Dropping
– Horizontal impacts
– Compression (having too much weight loaded on top)
– Overexposure to extreme temperatures or moisture
– Rough handling

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 Packaging Fundamentals
• Package testing and monitoring
– In addition to testing of package, shippers should keep detailed
records on all loss and damage claims to apply statistical
analysis – incident vs epidemic
– FedEx offers packaging test applications for their customers
• Customers can ship a sample test package to FedEx (test the package
at no cost to the customer), FedEx reports the testing result within 7
days of receiving the package

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 Packaging Fundamentals
• Package testing and monitoring
– Environmental condition is also part of package monitoring
(e.g., carton boxes for refrigerated containers)
– Monitoring done by enclosing recording devices within
cartons of product that are shipped. E.g., thermometers
that record temperature extremes, sophisticated devices
which records a serious of variables over time such as
temperature, humidity, etc.

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 Packaging Fundamentals
• Labeling
– Typically occurs at the end of the assembly
process
– Boxes must be labeled when contents are hidden
• Labels could be words, pictures, or code numbers
– Retroreflective labels – can be read by optical scanners
– Batch numbers – frequently assigned to food and dug
products, so they may be easily traced in case of a product
recall

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 Packaging Fundamentals

Figure shows example of shipping

labels that can be purchased for
individual placement on cartons or
pallets

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 Packaging Fundamentals
• Labeling
– Many regulations govern labeling
• Weight
• Specific contents
• Instructions for use
– Also placed outside of larger cartons as well
– Regulations differ from country to country and from
state to state
• More stringent in economically developed countries than in
economically developing countries
• Liquor industry heavily regulated and each state’s liquor-
boards responsible for regulating liquor related activities
including labeling (in U.S.)

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 Packaging Fundamentals
• Labeling - Hazardous Materials
– Requires special labeling requirements because any
material can possess hazardous qualities under certain
condition (e.g., flour dust)
– Governmental regulations address labeling of hazardous
materials
• Requirements involve
– Labeling
– Packaging and repackaging
– Placing warnings on shipping documents
– Notifying transportation carriers in advance
– Common requirements on transferring flammable
materials is that the vehicle and receiving or discharging
device both be electrically grounded
– Packages, containers, trailers, and railcars carrying
hazardous material must carry distinct signs
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 Packaging Fundamentals
• Labeling - Hazardous Materials
• Because hazardous materials are increasingly being
stored and transported across country borders, the
United Nations (UN) has played an active role in
developing a global system to classify and label
hazardous materials
• Globally Harmonized System of Classification and Labeling of
Chemicals (GHS) - designed to replace the various
classification and labelling standards used in different
countries by using consistent criteria on a global level
• Provides three key pieces of classification and labelling
information
– Symbol
– Signal word (e.g., danger)
– Hazard statement (e.g., explosion, severe projection hazard)
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 Issues in Packaging
• Environmental Protection
– Public concern for environmental protection has
profoundly impacts the packaging industry
– Over 80% of consumers view packaging as major
environmental issue
– Recyclable packaging materials increasingly attractive
– Disposable packing materials are often viewed as wasteful,
and their disposal is becoming increasingly expensive as
cost increase for dumping in landfill sites
– Plastic packaging become a target for environmental critics

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 Issues in Packaging
Environmental Protection
• What are some
environmental disadvantages
to plastic packaging?
– The length of time that it takes
to biodegrade, which can be up
to several hundred years
– Production of plastic products
is dependent on petroleum,
which is a diminishing natural
resource (and an extremely
costly resource in recent years)
– Sometimes plastic litter
unintentionally ends up killing
large numbers of marine
animals

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 Issues in Packaging
• Environmental Protection
– What environmentally friendly packaging strategies might
a firm adopt?
• Reduce packing materials used
– Use of just one material, which should improve recyclability, as well as
changing a product or format to minimize packaging waste
– Germany requires manufacturers to take back and either reuse or recycle
postconsumer packaging, starting in early 1990
• Use packaging materials that are more environmentally friendly
with recycled content
– PVC is extremely unfriendly plastic because it produces dioxin (cancer-
causing); mushroom blocks emerged as environmentally friendly
packaging material (e.g., Dell, retailers of housewares, furniture)

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 Issues in Packaging
• Environmental Protection
– What environmentally friendly packaging strategies
might a firm adopt?
• Use reusable containers (closed-loop system)
– Refillable glass beverage bottles
– Food and Drug Administration (FDA) has restriction on reusable
containers to avoid food contamination
• Retain or support services that collect used packaging and
recycle it (closed-loop system)
• Close-loop systems consider the reverse flow of products,
their reuse, and the marketing and distribution of recovered
products

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 Issues in Packaging
• Metric System
– U.S., Liberia, and Myanmar (formerly Burma) are the
only 3 countries in the world that do not use the
metric system of measurement
– Increasing pressure on U.S. exporters to market their
products overseas in metric units

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 Issues in Packaging
• Metric System
– One potential challenge is that certain taxes, such as
in the liquor industry, were developed to be
applicable to pints, quarts, and other English units of
measure, as opposed to liters and half liters
– Another problem is that packaging and materials
handling might need to be adjusted because cartons
and shelving designed for one system may not be
acceptable in the metric system (e.g., ounce
containers replaced by the 0.5 liter (approximately
16.9 ounces)

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 Issues in Packaging
• Identifying Packaging Inefficiencies
– Building-blocks concept is useful for analyzing
packaging inefficiencies
– Packaging inefficiencies can have a number of
undesirable logistics consequences including:
• Increased loss
• Increase damage
• Slower materials handling
• Higher storage costs
• Higher transportation costs

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Issues in Packaging

Less than one-third of available case cube is

occupied by actual product, while
approximately three-quarters of available
pallet space is occupied by cases.

Multiplying the case efficiency (31.6%) by

pallet load efficiency (75.4%) means that
less than 25% (23.8 %) of available pallet
space is occupied by actual product.

One implementation of this level of

inefficiency is that an increased number of
pallets will be needed, which in turn leads
higher storage and transportation cost

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 Issues in Packaging
• Packaging’s Influence on Transportation
Considerations
─ Carrier’s tariffs and classifications influence the type
of packaging and packing methods that must be used
─ Carriers established classifications for two main
reasons:
• Packaging specifications - encourage shippers to tender
loads in densities that will make the best use of the
equipment’s weight and volume capabilities. (e.g., IKEA
designs its products to be shipped in a dense form)
• Carrier specifications for protective packaging - reduce the
likelihood of damage to products while they are being
carried; this, in turn, reduces the amount of loss and damage
claims placed against a carrier

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 Issues in Packaging

Figure shows the box

maker’s certificate that
motor carriers and railroads
require on fiber boxes used
for shipping

Size limit shows 75 inches –

the material should not be
used in a package where the
total length, width, and
height, when added
together exceed 75 inches

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 Issues in Packaging
• Packaging’s Influence on Transportation
Considerations
• Difficult to know exactly how much carrier tariffs
and classifications control shippers’ packaging
• Responsibility for damage in transit is one issue
subject to carrier-shipper contract negotiation
• If the carrier remains liability, the carrier specifies the
level of packaging protection to use
• If shippers assumes responsibility, the shipper may
choose the type of packaging to use

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 Unit Loads in Materials Handling
• Extension of building-blocks
concept to very large quantities

• A unit load (unitization) refers to

consolidation of several units
(cartons or cases) into larger
units to improve efficiency in
handling and to reduce shipping
costs.
Source: http://cscmp.org/digital/glossary/glossary.asp

• Handling efficiency can be

facilitated by mechanical
devices (pallet jack or forklift) as
well as by using a pallet or skid.

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 Unit Loads in Materials Handling
Advantages
• Additional
protection
• Pilferage is
discouraged
• Mechanical devices
can be substituted
for manual labor

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 Unit Loads in Materials Handling
• Disadvantages
– Larger quantity of an item than a single box and may
be of limited value to organizations that deal in
small quantities.
– Mechanical devices, such as a forklift, that can be
substituted for manual labor can be very expensive
• Manual pallet jacks between $300-4500 vs forklift $7500 – 30000.
– Routine maintenance to keep them optimal
operating conditions.
– Lack of standardization of pallet sizes, especially in
the United States.
• This lack of standardization may necessitate re-palletization of
exports from the U.S.

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 Unit Loads in Materials Handling
Of the many
different pallet sizes
available, the
International
Organization for
Standardization
(ISO) has approved
six pallet dimension
which are now
widely used around
the globe.

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 Unit Loads in Materials Handling
The Unit Load Platform
• Basic unit is a pallet or skid
– Can be constructed from wood, wood
composites, plastic, paper, and metal
– Each pallet material has advantages and
disadvantages
• 48/40 inch $20, $80, $125,
wood/plastic/metal
• Life span – 3 yrs, 5 yrs, 20 yrs,
wood/plastic/metal
• Weight – 40, 30, 65 pounds,
wood/plastic/metal
– 50 pounds is significant weight in logistics,
more than this may create back injuries
• Pallet or skid alternatives
– Slip sheet – a flat sheet of either fireboard
material or plastic
– Shrink-wrap – plastic wrapping that when
heated shrinks in size to form a cover over
the product

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 Unit Loads in Material Handling
• Beyond the unit load
– Stow the unit load
pallets into truck
– Use of load-planning
software

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 Unit Loads in Material Handling
• Beyond the unit load
– Bracing or Inflatable dunnage
bags used to fill narrow
empty spaces
– But even when properly
braced, various forces such
as vibration, pitch, and roll
can still cause damage (e.g.,
continuous vibration –
loosen screws on machines)

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 Unit Loads in Material Handling
Beyond the unit load
• Weighing out
– Refers to when goods are so
heavy that they utilize a
vehicle’s weight capacity
without filling its cubic
capacity
– Heavy machinery must be
carefully balanced and weight
must be distributed evenly
• Cubing out
– Refers when a vehicle’s cubic
capacity is filled before
reaching its weight capacity
(e.g., hay)

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 Materials Handling
• Materials handling refers to the “short-distance
movement that usually takes place within the
confines of a building such as a plant or DC and
between a build and a transportation service
provider.”*
• How the products are handled depends on whether
they are packaged or in bulk
• Handling may change based on the characteristics of
the product
– Packaged products – by building blocks concept
– Bulk materials – by pump, conveyor belts, pipe line
systems
*Source: John J. Coyle,thC. John Langley, Jr., Brian J. Gibson, Robert A. Novack, and Edward J. Bardi, Supply Chain Management: A
Logistics Perspective, 8 ed. (Mason, OH: South-Western Cengage Learning, 2009), Appendix 11-A.

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 Materials Handling
10 Material Handling Principles Include:
1. Planning – careful planning, not afterthought
2. Standardization – improve performance, reduce cost
3. Work – reduce unnecessary work, improve performance
4. Ergonomic – facilitate worker health and improve work-pace
condition
5. Unit load – improve efficiency , reduce logistics cost
6. Space utilization – maximize the utilization of existing space
7. System – coordinate with other component of logistic
8. Automation – take advantage of automation
9. Environmental – minimize short/long term environmental
impact
10. Life cycle cost – focus on total cost ownership
Source: “The Ten Principles of Material Handling,” www.mhia.org.

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 Materials Handling Equipment
• Affect the effectiveness, efficiency, and safety of
logistics systems
• Two categories of material handling equipment
– Storage equipment
• Shelves
• Racks
• Bins
– Handling equipment
• Conveyor systems
• Lift trucks
• Carts
• Cranes

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 Materials Handling Equipment
• The choice of handling equipment can influence
the type of storage equipment.

• The choice of storage equipment can influence

the type of handling equipment.

• Use of storage racks allows for narrow aisles, but

narrow aisles require specialized equipment
(moving both vertically and horizontally)

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 Materials Handling Equipment
• Material handling equipment can also be
categorized as:
– Labor intensive
– Mechanized
– Automated

• Sufficient volume is needed to justify high cost

of automated equipment (e.g., 50,000 cartons
a day)

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 Materials Handling Equipment
• Organization’s order
picking and assembly
system can also
influence the type of Part-to-picker

handling equipment.
– Picker-to-part systems
• Order picker goes where a
product is located (e.g.,
forklift)
Picker-to-part
– Part-to-picker systems
• Pick location is brought to
picker (e.g., carousel)

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