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1 REUSABLE PACKAGING DELIVERS HIGH VALUE TO THE DYNAMIC RETAIL SUPPLY CHAIN Sponsored by: Produced by: In partnership with:

2 WITH SUPPLY CHAINS NOW MOVING AT DIGITAL SPEED, today s retailers need robust, flexible solutions that help warehouse, DC, and storefront operations overcome unprecedented customer service pressures. As the direct-to-consumer (D2C) retail supply chain continues to rapidly evolve in front of our eyes, market forces such as e-commerce and omni-channel fulfillment are having dramatic impacts on how retailers meet customer expectations. The ability for consumers to compare products across multiple merchants with just a few clicks of a mouse and then have those products delivered to their front doors is creating a dynamic supply chain that doesn t look anything like its predecessors. However, meeting those expectations is anything but easy. Many organizations are grappling with finding an innovative approach to sourcing, replenishment, and distribution to address these changes, contend KPMG analysts. Retailers are starting to seriously consider how best to optimize their supply chains to meet fast-evolving consumer demand, while minimizing costs and achieving profitable growth. Not willing to stand still long enough for shippers to catch up and fully acclimate themselves to the new normal, the retail supply chain has also put new pressures on the material handling environment, where randomly applying forklifts, racking, and pallets to the problem doesn t cut it anymore. CUSTOMERS ARE INCREASINGLY DEFINING HOW COMPANIES STRUCTURE THEIR SUPPLY CHAINS They can now SHOP ANYTIME (24/7 day/night) are more ETHICALLY and ENVIRONMENTALLY aware and expect a more FULFILLING EXPERIENCE from retailers Customers are increasingly defining how companies structure their supply chains. They can now shop anytime and anywhere, are more ethically and environmentally aware, and expect a more fulfilling experience from retailers, according to KPMG s recent report The Future of Retail Supply Chains. ANYWHERE (home, laptop/office/, store, phone/mobile) Source: KPMG, The Future of Retail Supply Chains Leading companies are going further and finding innovative ways to manage their dynamic supply chains. As part of that mission, many of consumer packaged goods companies (CPGs) and retailers rely on reusable packaging to move product faster, safer, and more cost-effectively. As today s leading companies continue to drive sustainability in their business, they scrutinize every point of their supply chains, says Bob Klimko, director of market development for ORBIS Corporation, including the packaging used to move their products. Over the next few pages we explore the key challenges that firms are facing in today s dynamic supply chain environment, outline four important trends that all companies should be watching, and then highlight the role that reusable packaging plays in helping firms overcome the ever-mounting pressures. 1

3 Retailers are seeking to offer customers a seamless shopping experience whether they re buying from a desktop, a smartphone, by phone, or in person at a brick-andmortar retail store. The evolution of the retail supply chain There was a time when manufacturers made and distributed just a few different SKUs, each of which was fairly easy to store, track and ship. For example, beverage companies would focus on 1 or 2 core brands. Today, as these companies diversify to expand customer share, the same manufacturer could have 80+ SKUs. This SKU proliferation has placed unique strains on distribution centers (DCs) and warehouses, with management now looking for ways to simultaneously oversee the demands of D2C, e-commerce, and omni-channel. Combined, these factors are putting unbelievable stress on the retail supply chain, says Klimko, and pushing shippers to take a more holistic view of the supply chain including utilizing reusable packaging as a catalyst for better efficiencies and productivity. To help shippers navigate the complexities of the retail supply chain, ORBIS has identified four key trends to watch and provides valuable insights on how to work through these issues in even the most challenging logistics environment. The growth of omni-channel distribution: 1 Retailers are seeking to offer customers a seamless shopping experience whether they re buying from a desktop, a smartphone, by phone, or in person at a brick-and-mortar retail store. This is causing major disruptive changes to traditional retail distribution. Just 10 years ago, for example, it wasn t that unusual for a customer to buy online and then not be able to return the merchandise in a brick-andmortar store not to mention the fact that online ordering was still in its infancy. Fast-forward to today and customers have come to expect this seamless experience, which is made possible with omni-channel distribution. For logistics operations, this requires multiple delivery points, fulfillment that takes place closer to the customer, and picking eaches versus cases of products. In addition, activities that have traditionally been completed within a distribution center are now being moved into store operations, where space and associate time are limited. This drives a need for solutions that can serve multiple purposes whether picking or curbside delivery as there simply isn t space to accommodate equipment. As an example, retailers are accustomed to working with 40x48 pallets, but there are new footprints that can better optimize different needs such as trailer sizes or store footprints, says Andrea Nottestad, market manager, retail supply chain for ORBIS. Maybe you re shipping cross-dock and need to optimize reusable packaging on a 53-foot trailer, but then you want to use a 26-footer or other means for the last-mile delivery. It s about optimizing both points of the supply chain, and reducing the restrictions associated with many traditional packaging options. The good news is that the packaging industry is responding with new solutions that effectively address shippers pain points, says Nottestad, and that provide new answers to problems that can t always be solved using traditional material handling equipment and packaging options. 2The emergence of small-format stores: Long dominated by big-box stores, the retail industry is undergoing a major transformation and shifting away from the big is better mindset. 2

4 Combined, these factors are putting unbelievable stress on the retail supply chain and pushing shippers to take a more holistic view of the supply chain including utilizing reusable packaging as a catalyst for better efficiencies and productivity. Bob Klimko, director of market development for ORBIS Corporation HEADLINE HEADLINE HEADLINE Big was better for retailers because scale drove down unit cost and so raised return on investment, according to Nielsen s recent Think Smaller for Big Growth report. It was also better for consumers, who gained access to a greater assortment, better prices, and convenient one-stop shopping. And big was better for suppliers, who benefitted from greater shelf space to deploy brand and category portfolio strategies. Today, that s all changing as retailers move away from having massive store footprints and opt instead for small-format stores. As the number of smaller stores increase, the need to create local and convenient shopping experiences sometimes in nontraditional markets is growing exponentially. For shippers, this There was a time when manufacturers made and distributed just a few different SKUs (SKU is a unit of product), each of which was fairly easy to store, track and ship. For example, BEVERAGE COMPANIES WOULD FOCUS ON 1 OR 2 CORE BRANDS Today, AS THESE COMPANIES DIVERSIFY TO EXPAND CUSTOMER SHARE, THE SAME MANUFACTURER COULD HAVE 80+ SKUS This SKU proliferation has placed UNIQUE STRAINS on distribution centers (DCs) and warehouses, with management now looking for ways to simultaneously oversee the demandss of D2C (DC to the consumer house), e-commerce, and omni-channel translates into fewer products (delivered more frequently) at the DC level, and stores that no longer have dock doors to accommodate 48X40 pallets. Other key challenges include a lack of backroom storage space and more just-in-time (JIT) orders, both of which necessitate product delivery through the door seamlessly to the shelf or aisle. These stores need smaller footprints to accommodate the retail store delivery and replenishment, enable vertically-efficient unit loads, and optimize delivery truck space. Today, since much activity occurs while customers are present, there s also an elevated sensitivity to customer risks and convenience. According to Nottestad, ORBIS has responded to the small-format trend by making more wheeled solutions that can seamlessly accommodate the shifting retail environment. Starting in the warehouse or DC and moving right out onto the retail floor, the unit loads can be loaded, moved around, and then turned into a stationary pallet by hitting a pedal that stabilizes the unit. From a merchandising perspective, this is a very flexible solution that lends itself to use in the smaller-format stores, says Nottestad, but that can also be used right through the entire retail supply chain. 3The growing focus on end-to-end supply chain collaboration. Supply chain efficiency has been around a long time. In 1994, European retailers collaborated and started the Efficient Consumer Response initiative. In 1996, Coopers & Lybrand studied areas of the supply chain, ultimately creating a modern-day method for collaborating and communicating across the end-to-end supply chain. Source: ORBIS Corporation 3

5 If a product isn t on the shelf, it effects more than just that one sale and can make an impact on the consumer s decision on whether or not to come back to that store again. Andrea Nottestad, market manager, retail supply chain for ORBIS Corporation Today, within the retail supply chain, collaboration among stakeholders is both valued and sought after, with decisions being made with supply chain efficiency in mind and not just each individual node. To accommodate this trend, packaging must be versatile, and it must meet needs across the entire supply chain. Also, associates need to focus on the consumer experience and not excessive time unloading, replenishing and stocking shelves. Packaging that helps execute these needs (mobile, one-touch, etc.) and pallets or equipment that transitions between the DC and stores, are both helping shippers address their supply chain collaboration goals. In the past, the suppliers and manufacturers of consumer products basically tried to optimize their own operations, says Klimko. Now, everyone is working with shared metrics that help them drive innovative thinking and make sound decisions. The company that s making three different variations of an air freshener, for example, and that wants to include all three in a single package, will have to factor in various picking, packing, shipping, and displaying options in order to optimize its metrics (i.e., optimizing for picking efficiency at the DC, optimizing cube efficiency, minimizing waste, etc.). To meet these needs, providers like ORBIS are developing solutions that literally transcend the supply chain and help streamline processes across the omni-channel business environment. 4More effective and efficient merchandising: Ultimately, the best supply chain delivers products seamlessly from the manufacturer through distribution to the shelf and consumer. The ability to merchandise effectively with packaging in mind has always been important for retailers through primary packaging. But now secondary transport or reusable packaging can also play an important role in adding efficiency. For retailers, the need to quickly unload and merchandise their stores equates to more customer face-time for associates, fewer stockouts and improved demand for products. To achieve this trifecta, companies need increased collaboration within parts of the supply chain at the organization and supplier/ partner levels. One-touch solutions (e.g., pallets that can go from DC to retail aisle); retailready packaging and merchandise that keeps the consumer in mind; and shopper-friendly packaging (i.e., contoured corners, no nails to scratch floors, aesthetic, duplication, etc.) all help to enable collaboration and streamline the retail supply chain. In today s retail environment, products must get to the floor quickly, but also in good, saleable condition, Nottestad points out. If a product isn t on the shelf, it effects more than just that one sale and can make an impact on the consumer s decision on whether or not to come back to that store again. This is where reusable packaging and flexible solutions stand out and ensure that products are where and when they are needed and all without overtaxing the associates who are charged with making that happen. It s about fewer touches across the supply chain, says Nottestad, as the product moves from DC to store. 4

6 Right now, a lot of large retailers are trying to determine how to create the best mix of online and brick-and-mortar, and how to leverage different aspects of the supply chain. Bob Klimko, director of market development for ORBIS Corporation There s more to come As the retail supply chain continues to evolve, there will be more and more pressure on brick-and-mortar stores to become even more efficient and flexible. Whether that means packing more SKUs in cases, packing fewer SKUs in boxes, or being able to quickly break down larger orders into D2C deliveries, the retail supply chain will continue to morph and remain in its ultradynamic state. And, says Klimko, all of these shifts will have a profound impact on the type of packaging that s being used. Right now, a lot of large retailers are trying to determine how to create the best mix of online and brick-and-mortar, and how to leverage different aspects of the supply chain, adds Klimko. By providing solutions that can flex and adapt as needed, we re helping to make that happen in the material handling and packaging realm. About ORBIS Corporation Plastic reusable packaging products and services improve the flow of product all along the supply chain, to reduce costs and drive environmental sustainability. ORBIS helps world-class customers move their product faster, easier, safer and more cost-effectively with plastic reusable containers, pallets and protective dunnage. ORBIS uses proven expertise, industry-leading knowledge, innovation, superior products and supply chain services (tracking, cleaning and logistics) to implement plastic reusable packaging systems. To learn more, contact ORBIS, a subsidiary of Menasha Corporation, at or visit or 5