PACKAGING AS UNITIZATION

The physical distribution process involves storage, handling, and transportation of the product
during its journey from the manufacturing plant to the end customer. For ease in the distribution
process. Individual products are grouped together in quantities to form a package that can be
conveniently moved in the distribution system. This process of grouping a large number of
products in convenient packs is called unitisation.
Consumer goods unitisation is usually based on the quantities required by consumers and
channel members. They are put in master cartons, bins, or boxes. However, for logistical
packaging, individual products (depending on size) or master cartons are further grouped
together and put into wooden crates or containers for ease in transportation, storage, and
handling. Processed food, automotive parts, and consumer items are unitised in numbers,
weights, and volumes depending on the purchasing needs of customers. The unitisation of load
plays an important role in enhancing the efficiency of the logistical system. The unit load may be
stored, transported, and handled with mechanical equipment during its journey from the place of
despatch to the place of final delivery. The most common method of unitisation is containers.
Containers The most advanced and sophisticated system of unitisation, which is being
developed, is based on the concept of containerization. Containers are devices in which
individual items or master cartons are placed during the transportation activity. The purpose of
providing a box container is to protect the products or master cartons from damage during
transportation, storage, and multiple trans-shipment handling. This is the most common method
of load unitisation for long distance shipments because of the following reasons:

Excellent protection from environmental effects

Space economy
Substantial reduction in transit damages
Reduction in pilferage
Facilitates inter-modal transportation

These box containers are cubical constructions and are fabricated out of steel or aluminium
sheets. There are various standard sizes of containers used in sea, rail and road transportation.
However., the most common sizes in use are 40 feet or 20 feet long containers. Freight
containers' size and capacity details are discussed in Chapter 8.
Pallets The other method of load unitisation is stacking individual products or master cartons on
pallets and tightly securing them with metal straps or shrink films. The handling of pallets is
done by forklift trucks. Pallet packaging does not give complete protection to the product from
the environmental effects, but palletisation offers tremendous advantages in transportation and
handling of goods. The pallet gives increased stability and damage protection to goods during
transportation as compared to individually handled master cartons. It enhances the productivity
of the logistical system and reduces the cost of handling. Due to the standardization of pallet

sizes, conforming to international standards, the loading and unloading operation is very easy.
There is two way or four way entry pallets; the choice of which depends on the method of
storage, handling, and transportation. Two way pallets are handled by forklifts from two sides
while four way pallets provide greater flexibility in handling.
For unitisation of load the industry usually standardises the size of the unit load platform called
'pallet' or 'slip sheet'. The following are the standard sizes used internationally for load
unitisation:

40" x 48"
32" x 40"
32" x 36"

The main advantages of palletising are:

Lowering of handling cost by unitizing loads

Increases speed of material flow in the warehouse
Reduces the frequencies of material handling
Facilitates handling of cases by machines, result in productivity improvement.

Slip sheet Unitisation of load is also done on the slip-sheet, which lie flat on the floor. It is
disposable shipping platform constructed out of highly tensile laminated paper. The sheet is
much thinner than the wooden pallet and cannot be lifted with a forklift. It requires a special
lifting device known as a push/ pull attachment. The device is designed to grip the tabs of the
slip-sheet to lift it and load on to the metal plates that support the load during transportation. The
sizes of slip sheets are similar to the pallet sizes indicated earlier. However, the product
characteristics, capability of handling equipment, and the type of transportation equipment will
be deciding factors in unit load platform size.
DESIGN CONSIDERATIONS
Logistical packaging is a crucial element in the physical distribution system, which helps in
enhancing the system efficiency and effectiveness of the company's supply chain. Proper
packaging for logistics applications takes care of the cost, which would otherwise have been
incurred in the form of product damages during transit, ultimately resulting in opportunity loss
and customer dissatisfaction. Hence, logistics packaging is designed keeping in view the
following objectives:
Material Handling
Packaging is a means of ensuring safe delivery of products, in usable form, to the ultimate
customer. Physical distribution includes a number of activities such as storage, transportation,
and handling. Most damages to the product takes place during the handling operation. at the time
of loading and unloading at the starting, trans-shipment, or destination points. The type of

equipment used for handling packages and their capability and condition play a vital role in
controlling product damages. Handling systems vary considerably at different points in the
distribution channel. Hence, these factors should be taken into consideration along with the
sensitivity of product and cargo while designing packaging. In fact, many points are
uncontrollable, but remedial measures need to be taken based on historical statistical data to
pinpoint the areas, operations, skills, and facilities to avoid future damages.
In the majority of places, loading and unloading operations are done manually. The reasons for
product damages during loading and unloading operations are:

Height of loading platform

Method of handling
Vehicle condition

The extent of package damage may be less if proper loading height is provided. This will reduce
the height of fall when packages dropped; resulting in reduced impact and minimum damages.
The method of handling can also be improved by properly training and educating the loaders.
The physical condition of the loading area of the vehicle wherein the cargo is held during vehicle
movement contributes a lot in minimizing the damage to the cargo. Normally damages take place
due to:

Irregular truck bed affects the stability of packages on uneven contours.

Gaps between the truck bed planks create obstacles to the movement of packages during
unloading, and may cause damage to it.
Protruding bolts and angles behind the driver's cabin damages packages.
A partially loaded truck may not allow the consignment to be secured in place during
transit and may hit the sides or rear end of the truck body causing serious damages to the
package.
Ropes used for tying the consignment on a fully loaded truck damage packages.

Even a well designed package with all safety factors (which will increase packaging cost)
incorporated in it will not solve the problem of product damages, if the precautions are not taken
during the loading and unloading operation. The remedial measures are:

Usage of additional leveling and packaging material at critical places on the truck bed
Packages to be designed on modular concept to avoid dimensional mismatching
Special provisions for rope tying
Avoid rolling of packages on floor

Similarly, to reduce damages during the unloading operation, the provision of proper unloading
platforms to reduce the drop height and usage of proper material handling equipment is
recommended. In the warehouse, proper packaging will enhance material handling efficiency and
improve warehouse productivity, resulting in reduction in the operating costs.

Transportation
The major cost element in logistics operations is transportation. For low unit value products the
transportation cost varies from 10 to 50 per cent of the product cost. The transportation cost for
the consignment depends on the following factors:

Gross weight
Gross volume
Stowabilitysize and shape

The gross weight carrying capacity and the storage space of the carrier is fixed. However, with
proper package design, using lightweight packaging material, more tonnage per unit volume can
be accommodated. Hence, the incidence of transportation cost per unit weight of the goods
carried can be reduced considerably. Similarly, for utilizing full space of the carrier, the size and
shape of the consignment package plays a major role. By using the concept of modular
packaging, this problem can be solved to a great extent.
Odd sized and shaped consignments attract higher freight charges per unit weight or volume of
the given consignment, as the carrier's space and weight carrying capability is underutilized
while the cost of freight for a given carrier between two locations is fixed. Extra heavy
consignments with odd shapes require special care and effort in packaging the non-standard
design. In some cases odd shaped items can be transformed through proper design of packaging
to avoid the special freight charges it would have otherwise attracted.
The other unanticipated element, which many times adds to the logistical costs, is transit damage
claims. This happens due to poor consignment packaging, which rips open or gets damaged
during transportation. The package may not withstand the varying carrier conditions and the
environment it travels in. This is why for sea cargo, sea worthy packaging (special design using
teak wood) is specified to protect the consignment and withstand the hostile sea environment.
The cost of sea worthy packaging is 30-40 per cent more than normal packaging for inland
transport. For shipments by air the use of lightweight material is recommended as air shipment
attracts the highest freight tariffs amongst all the available travel modes. Hence, depending on
the mode of transportation, the consignment packages are designed to take care of the
environment and multi modality of travel.
In case of container transportation, since overall protection is assured, primary packaging need
not be so elaborate. One of the greatest advantages of container packaging is considerable
reduction in the cost of primary packaging. For example, for transportation of high value fashion
garments through box containers, an innovative way of logistical packaging is being used. They
have developed special hanger fixtures to keep garments in hung position during the journey.
This saves a lot on primary packaging of the product.
Storage

Storage is a critical element in the logistics operation. It plays a vital role in make and sale
equation of the manufacturing organization. The finished products are stored in the captive
warehouse till they are dispatched to the distribution warehouses in the field or directly to the
customer. The period of stay in the warehouse is not fixed and depends on the nature of demand.
Finished products occupy the floor and cubical storage space in the warehouse. Due to limitation
on the available space and in order to ensure maximum storage density, finished products should
be packed so as to ensure space economy. Odd shapes of the products can be overcome through
proper packaging, permitting rational storage, which is otherwise not possible.
Warehousing capacity utilisation depends on the material storage system. However, packaging
plays an important role in floor and cubic space utilisation. Well designed packaging will ensure
maximum storage density for the given shape and size of products. However, the vertical space,
upto the ceiling of the warehouse, can also be utilised, provided the packaging can sustain the
stacking load. In a single storey warehouse the ceiling height may go upto 30-40 feet. In case of
consumer goods like television, vertical stacking is allowed upto a maximum of 5 cartons. This is
because the weight of the stack comes directly on the product itself rather than the package. If
the box is made a little stronger (provided cost add-ons do not disturb the pricing structure of the
product), the stacking height can be increased, adding to the space utility of the warehouse. The
increased stack height may call for invest-ment in material handling equipment. Hence, storage.
material handling, and packaging are the three sides of a triangle, which should be balanced so as
to ensure maximum productivity in the system.
Communication
Logistical packaging has to play an important role of communication in the journey from the
place of shipping to the place of delivery. The following information is of vital importance for
the consignment to reach the right place in good condition:

Contents of the package (product, weight, quantity, size)

Type of goods (hazardous, explosive, perishable, radioactive etc.)
Name of the manufacturer
Name of consigner (place of origin)
Name of the consignee
Country of origin

As per regulations, this information is required to be put on a label on the package, which can be
read from a reasonable distance. Without the label, carriers will not accept the consignment and
inspection agencies involved in exporting/importing the cargo will not accept or allow it to be
shipped.

Information regarding handling of the package is required to be put on the logistical packaging.
The handling instruction includes the position and damage precautions for chemical containers;
temperature to be maintained for temperature controlled processed food, pharmaceutical, and
agro products; and stacking consideration for fragile products like glass.
The tracking of each consignment is an important function of packaging. The consignment
moves through multiple storage, material handling, and transportation systems at various
terminals along with other consignments. To keep a track of its movement, each package should
be identifiable through a bar code. This will minimize chances of loss of package due to
misplacement, pilferage, or theft.

Packaging MATERIAL
For logistical packaging, a variety of materials are in use. However, the most common are:
corrugated fiberboard, steel, plastic, and wood.
Corrugated fiberboard Master cartons are invariably made out of 2/3 ply corrugated sheets.
How-ever, for logistical packaging thicker corrugated sheets with 5/6 ply or more are preferred.
This material is most commonly used for consumer durables like television sets, washing
machines, refrigerators, processed foods, pharmaceuticals, liquor, cigarettes, matchboxes,
personal care products, light engineering goods, paints, and electronics goods. The pallets are
also made out of thin corrugated sheets.
However these are used for very light goods in electronic, electrical, and plastic item
manufacturing industries

The present consumption of corrugated boards in India is to the tune of 3,20.000 tonnes per
annum, which is divided among the various industries as shown in Figure 9.9. The largest
consumer is food processing industry

Steel Metal containersboxes or drumsmade out of galvanized mild steel sheets are used for
logistical packaging. Steel, being a very strong material, can withstand abuse in handling during
transit. The usage of this material is recommended for products like chemicals or lubricants,
wherein strong packaging material, which is less prone to damages during transit, due to abuse in
handling, is required. Due to the higher strength of material, spilling over and leakages are
reduced.
Steel is commonly used for box containers used in multi-modal transportation by sea, rail, or
mad. These containers arc made out of thick alloy steel grade sheets for durability and high
strength.
Plastics Plastic bags and containers are quite common in logistical packaging. Plastic drums are
used for liquid chemical transportation, while bags are used for chemicals in solid form and
foodgrain packaging. High density plastics are used in rigid lidded containers for storage and
transportation of small items. Plastic straps are used for unitised material in small packs, which
will be packed into a large box container.
Shrink plastic sheets are used for securing and protecting unitised load on pallets or skids. Shrink
packaging is very cost effective as compared to the rigid plastic containers. However, it is not
reusable and, being a non-bio degradable material, creates problem for disposal.
Pallets made out of High Density Polyethylene (HDPE) are commonly used in applications
wherein properties such as resistance of chemical attack and impact forces are preferred.
However, polyethyl-ene has very poor resistance to bending. Polystyrene or polypropylene is
also occasionally used in certain product applications.

Wood It is the most common material used for the construction of pallets or crates. Hard wood
pallets are designed to take loads upto 2200 kilograms. Soft wood may be used for weight
carrying capacity upto 2000 kilograms. Wooden pallets are cheaper as compared to metal or
plastic pallets.
Universally wooden pallets are preferred and used in both in-house and shipping applications.
Investment in pallets is a costly undertaking and is hence used only on a limited scale. In many
cases the users and the pallet suppliers create a pallet pool for reusing pallets and, thus, reduce
recurring investment and also resolve the problem of waste disposal.

Packaging cost
Logistical packaging helps in reducing transit damages, enhancing the operating efficiency of the
material handling equipment and economizing on space utility. The net result is reduction in the
operating

cost of the system through better asset utilisation and prevention of transit damage of the
product. However, the gain is more than the loss incurred due to not having proper logistical
packaging. But for gains, the manufacturer needs to plan creation cost of packaging, which
includes:

Cost of package (manufactured or landed)

Storage cost of empty packages
Handling cost of empty packages
Packaging operation cost (cleaning, filling, sealing, labelling, unitising, strapping etc.)
Package damage (during packaging operation) cost
Obsolescence cost

The logistical packaging cost depends on the type of product (perishable, fragile, hazardous,
capital goods, spares and components), physical dimensions of the product, the unit value of the
product, type and quality of handling, transportation equipment, regulations etc. However,
broadly it varies from 0.5 to 5 per cent of the value of the consignment. The maximum
expenditure is on sea worthy packaging.