Science Of Line-To-Line Packaging Solutions In Automotive Industry

Manish Ahuja, Director & Co-Founder, Holisol Logistics

Manish Ahuja, Director & Co-Founder, Holisol Logistics

A utomotive is one Industry that has been the fastest in adopting new processes & technology to enhance production efficiency. Over a period, the industry has made rapid progress towards scaling up the production, by reducing every non-productive second in their assembly line operations.

The packaging operations somehow was lagging in terms of achieving a similar level of efficiency and optimization. A lot of packaging, especially in Asia, was still using corrugated/wooden boxes. The lack of specialized packaging solutions was linked to issues like increased waste generation, in-transit product damages, loss of cube efficiency in freight transportation & storage, and the need for repacking etc. This has resulted in a need for a specialized packaging solution with a scientific approach to figure out optimal packaging solutions for standardizing parts per container, maximize pack density, improve inventory accuracy & control, minimize handling, and prevent in-transit damages during storage & transportation.

The possible reason for this lag could be due to the very nature of “Packaging” being superf luous, as it eventually ends up getting scrapped. But the packaging is still needed. Is it only to keep the product safe! That is just one of the dimensions, the other dimensions of packaging include:
- Product Safety
- Ease of Handling
- Ease of Storage
- Transit Safety

- Identification / Parts Description etc...
The planet’s push on sustainability has resulted in “Being Green” becoming a boardroom agenda of leading automotive companies. Hence it has widened the horizon beyond manufacturing efficiency and shifted the lens on activities like packaging across the supply chain. This has led to the need for innovative returnable / reusable packaging solutions.

To understand it better, we need to take a deep dive and see where all packaging is used in the automotive world and why. To do that we need to break the automotive supply chain into:

- Raw Material Packaging (Inbound)
-Finished Product Packaging (Outbound)
- Spare Parts Packaging
Raw Material Packaging (Inbound):
Any large size OEM would have an SKU strength of over 1,00,000 SKUs of raw material being supplied from a vast supplier base spread across the country and beyond. Now when it comes to ensuring the availability of the right quality SKU, in the right quantity, at the right time, at the right place, packaging plays an important role in keeping the product safe in transit from supplier to OEM.

But at the same time, it adds up non-productive manhours, to unpack/replace parts on trollies for line feeding. With the endeavours of being green both OEM and service providers are applying scientific approaches in designing the packaging of raw material with innovative reusable/returnable packaging solutions, addressing multiple dimensions of the supply chain achieving efficiencies in:
• Product Safety

• Load Quantity
• Part Categorisation
• Handling Infrastructure / People Safety
• Storage Infrastructure
• Compliance (& HSE)
What is taking this scientific approach of automotive packaging to the next level is the addition of another dimension of the holistic view of the supply chain (Line to Line). When a part travels through different handling points, a massive amount of time and effort goes into packaging (primary, secondary & tertiary) at the supplier end. Similar if not more amount of manhour and space goes in unpacking at the OEM’s end, to have the parts ready for assembly. Not to mention the efforts that goes into managing the packaging inventory on a per SKU level at the supplier end and managing scrap at the OEM’s end.

This new approach is inculcating “In-Plant Logistics”, “Transit Logistics” & “HSE” in tandem with the innovative “Holistic Packaging Solutions” in the automotive space. This is helping the automotive industry by not only getting more environmentally and socially conscious but also reducing the cost (estimated up to 25%) by improving the loadability, reducing time to packing & unpacking the goods. Big automotive players are seeing a huge potential in this vision and are investing in dedicated resources to bring this science into automotive packaging. We have not even scratched the surface in India, and it is a long way to go in converting the conventional auto part packaging to holistic line-to-line green packaging. Automotive Industry has a pedigree of being early adopters of technology and efficient processes, it is just a matter of time for it to spread beyond OEMs to Tier 1 and Tier 2 suppliers.

Finished Product (Outbound)
The packaging needs of finished automotive products would be very different from that of raw materials. This would widely change depending on, if the finished products are destined for domestic or international transit with high shipping costs. Since the product is finished, it
is expected from the packaging perspective to ensure product safety, and safety of people handling the finished product, efficient load factor and cost-effectiveness.

For finished automotive product transiting in the domestic market, enough engineering has gone in to have minimalist packaging by redesigning and custom fabricating rolling stocks across the country. However, innovation being a rolling ball, there is always scope of taking the value chain up by redesigning the packaging using customised unit loads, which can help in bringing transit efficiencies, reduction in dependency on customised trucks and user-friendly handling resulting in a reduction of manpower which can result in reduction in cost of up to 35% (estimation). The storage-friendly designs help in solving the problem of vast variance in peak & trough of demand cycle, thus reducing warehousing requirements etc.

For the international market, the finished product packaging involves a lot more science, from the perspective of longer treacherous transit, multiple handling, and higher load ability requirements.

There is a constant endeavour in designing “Semi & Completely knockdown (SKD & CKD)” packaging techniques, helping to bring down the unit shipping cost and attaining duty benefits at the country of import. Both OEMs & logistics service providers have seen great potential in reengineering the export packaging of finished automotive products by integrating the packaging & logistics with a holistic supply chain vision. Better packaging is only helping ensure the safe delivery of the product at the destination country but also are being designed from the perspective of people safety, easy re-assembly eventually resulting in increasing export orders.

Spare Parts Handling
Spare Parts in the automotive world is a different ball game altogether. It runs through a parallel supply chain and when it comes to packaging it has its own requirements. Besides the above, other dimensions that get added in spare parts packaging are brand recognition, additional re-packaging activity during the value chain, brand protection from counterfeit etc. Continuous efforts are going in redoing “Spares Packaging” which can help in the reduction of repacking activity, Easy handling from storage & retrieval perspective, Use of QR Code / RF technology for not just easy identification but also to fight product piracy.

We have come a long way from where we were, considering packaging as natural integration from production, to now, where the automotive industry is one of the first movers welcoming the scientific amalgamation of packaging &logistics. Reciprocating the fast-changing markets, it is imperative to have a responsive supply chain & thus automotive packaging will continue to keep innovating, catering to the ever-changing needs of complex “Automotive Supply Chains”.