An Innovation Institute
Many corrugated companies have this innovative supply chain management relationship down to a fine art, using carefully structured R&D and innovation departments consisting of highly skilled staff to work side-by-side with the customer.
Leading US packaging company Georgia-Pacific's Innovation Institute is an integral part of the company's quest to help its customers find ways to improve its packaging.
Its Innovation Institute is completely dedicated to showing customers new packaging design solutions in action - providing customers with packaging concepts that not only offer product protection but also improve a company's bottom line by simulating retail and packaging environments.
At the heart of Georgia-Pacific's Innovation Institute is its Packaging Systems Optimization (PSO) program, which was developed to create more sustainable processes throughout the supply chain. The program also focuses on new ways to streamline operations and reduce total systems costs.
Although the Institute is now well established, having been set up in 1992, according to director of packaging sustainability Pat Smorch it has constantly reinvented itself to meet customer demands. "At the heart of the institute are skilled designers who will work with customers and box plants to come up with innovative packaging solutions and an innovation lab to meet the needs of our clients," Smorch explains.
The PSO program is key to designing corrugated boxes that save on material costs, reduce weight and in some cases reduce fiber content. This dedication to cost saving has resulted in the Innovation Institute having a remarkable success, achieving a staggering $24 million of savings overall for customers last year.
A $350,000 saving in one year
A recent example of this is Georgia-Pacific's recent work for a large wine manufacturer. The company wanted to increase the strength of its display cartons in order to minimize damage and reduce supply chain costs. The PSO program worked on redesigning the packaging and added a Z-Divider, downgraded the board and weight combination, transforming the pack from a C to a B flute. This resulted in a staggering $350,000 in cost savings in the first year. The newly improved pack has enabled the customer to have more space in the warehouse combined with reduced material handling.
Development work on the new wine pack also had an amazing impact on sustainability savings, with a fiber saving of 1,500 tons. Wal-Mart's packaging scorecard policy for suppliers, an initiative that forms part of the retailer's commitment to reduce packaging across its global supply chain, originally gave the pack a scorecard value of 2. After Georgia-Pacific's work on the pack at the Innovation Institute it achieved a scorecard value of 10 - the highest possible score.
Customer support with new ideas
In Scandinavia it's a similar picture. Metsa Board's newly opened innovation centre in Äänekoski in Finland is firmly focused on ensuring its products fit in rapidly-evolving printing and converting technologies. The center also focuses on R&D into paperboard products, raw materials and printing technologies. Its aim is to support customers in the packaging industry and study how its products can match.
"We have relentlessly developed our paperboards, production processes and service to support customers in their business," says CEO Mikko Helander. "At the same time, our work has achieved benefits in sustainability, for example in the design of light but stiff boards and in production energy efficiency. Now we want to strengthen our R&D further and drive business forward based on new ideas, customer demand and feedback."
The centre will also respond to topical issues as they arise such as mineral oil hydrocarbon migration from printing inks.