Friday, January 19, 2018

Packaging Customization Issues and Use of Self-Fulfillment Centers


A recent packaging trend with the customer determining a package’s design has changed the way supply chain runs. With the increased customization of products and packaging, this requires more innovation for the packaging department in order to satisfy the customers’ needs. Along with customization there follows the issue of balancing “lower quantity items at a cost-effective point”, (http://www.logisticsmgmt.com/article/global_packaging_design_emphasizes_convenience_ergonomics_and_customization). We think that this new level of customization will cause there to be an increase in the cost of a product and/or the cost of shipping that product simply due to the tweaks in packaging design.

The “Packaging strategies” article mentions Frito-Lay offering customers a unique potato chip experience by requesting their own picture on the bag. This is very interesting, because such extensive customization on the packaging must be very costly to the business. On the other hand, by providing the customer with their own input to the final product of the packaging, this may generate more attention and appeal for the brand. One question we have for discussion is whether or not companies who offer customized packaging will benefit more from producing packaging at their own fulfillment centers or to go with a 3PL? (https://www.packagingstrategies.com/blogs/14-packaging-strategies-blog/post/87894-personalization-and-more-trends-in-packaging)


We think that a company who allows their customers to aid in the packaging design process should complete their packaging at self-fulfillment centers to ensure quality and environmentally safe packaging, especially if they are a large enough organization. While this may lead to higher costs in their supply chain, one way that may help to mitigate those costs is to mass produce basic packaging that is capable of simple and quick adjustments, based on the desire of the customer. The company could also look to outsourcing their transportation after completing the packaging and labeling process in house to leave more time to focus on other important business processes. (https://www.shipbob.com/blog/self-fulfillment-vs-outsourcing-3pl-right-e-commerce-business/#.WmfKQiM-Igp)

2 comments:

  1. I think this is a really interesting topic. What stood out to me was the fact that Frito Lay was currently implementing this level of customization. I do wonder how much profit margins are effected by giving Frito Lay customers the option to customize the bag, and I would assume there must be some kind of additional charge for customization. But how much? That being said, I think it is a really creative marketing technique. I wonder if this is an example of something marketing came up with before consulting operations and logistics like Dr.B mentioned in class. Great post! -Darian McIntosh

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  2. The idea of a big company like Frito-Lay customizing their products is really interesting. I've always viewed customizable products as something usually fulfilled by smaller companies that focus only on custom products. My only question is, why does Frito-Lay feel the need to do this? Yes, it would be great for marketing and to refresh their brand a bit, but is it necessary? Are they losing profits? Are sales not as expected? I feel like Frito-Lay has been around for so long and people will buy their products no matter what. With that, they'd be better off saving the potential cost increases and just keeping things the way they are.
    -Angie A.

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