to Strategic Packaging Management - Kearney

10Stepsto Strategic Packaging ManagementA guide to optimizing consumer packaged goods to capture more value

210 Steps to Strategic Packaging Management

Market dynamics are putting pressure on sales and profits

Demand

Supply

Source: A.T. Kearney analysis

Situation

Consumers with a high affinity for

switching products and high demand for

smaller pack sizes

Volatile commodity prices

Reaction

Wide range of products with strong

differentiation

High level of product safety and liability

Effect

Diverse choice of sourcing channels

(online versus offline)

Greater supply chain flexibility and agility

Top line

Bottom line

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ContextFor many companies, shifting market dynamics are putting pressure on the top and bottom lines. Despite consumer packaged goods companies pushing innovations into the markets to grab customers’ attention, product loyalty is dwindling. As sales move online, the traditional store-based category strategies are at risk.

In this context, packaging has a tremendous potential in supporting companies growth strategies. Armed with an all-encompassing approach to packaging management, companies can exploit the full potential of this often-overlooked area. When it comes to packaging, we will show examples ofhow companies supported by A.T. Kearney have achieved savings between 10 and 24 percent with methods such as game-theory based negotiation concepts, digital tools, and complexity management.

In this publication, we offer insights for consumer product and retail companies as well as suppliers in packaging production and development.

A.T. Kearney’s 10 Steps to Strategic Packaging Management provides a comprehensive, pragmatic set of initiatives for best-in-class strategy packaging management and connects top-line growth drivers with bottom-line efficiency levers. Both sides are required in comprehensive and strategic packaging management.


10Stepsto Strategic Packaging Management

Drive top-line growth

4 Adopt digital technologies

3 Leverage packaging to communicate with customers

1 Embrace packaging as a vehicle for innovation

2 Use sustainable green packaging


to Strategic Packaging Management

10 Invest in best-in-class IT systems and technology

Use powerful enablers

Create bottom-line efficiencies

7 Harness supplier innovation

6 Obtain the best value from suppliers

5 Reduce complexity and optimize specifications

9 Empower cross-functional collaboration

8 Follow lean practices


Major international food company

Large European grocery retailer

Leading US consumer product company

Impact and advantageSavings of 13 percent were achieved, along with faster time to market as a result of less complex packaging.

Impact and advantageWe exceeded the retailer’s expectations by delivering savings of about 24 percent.

Impact and advantageSavings exceeded 10 percent, and supplier relationships became stronger as a result of improved collaboration and decision making.

Packaging management strategies for consumer product and grocery retail companies

SituationA major food company wanted an all-encompassing packaging management strategy that focused on estimating costs and reducing packaging complexity.

ApproachOur opportunity assessment led to a balanced mix of fact-based sourcing and waves of reducing complexity. All initiatives were prioritized with stakeholders from procurement and other functions engaged to build the case for change.

SituationA retailer in Europe needed immediate savings to secure margins because of factors such as stronger currency. Flexible film was chosen as a pilot area to apply innovative negotiations using game theory.

ApproachWell-orchestrated messages were conveyed during about a dozen supplier days.

SituationA top consumer product company in the United States had conducted several packaging tenders but was seeing less value over time.

ApproachWe used an advanced sourcing application with parametric bidding, tendering the packaging production steps instead of standard stock-keeping units. The project triggered a paradigm shift for procurement.

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A.T. Kearney is a leading global management consulting firm with offices in 40 countries. Since 1926, we have been trusted advisors to the world’s foremost organizations. A.T. Kearney is a partner-owned firm, committed to helping clients achieve immediate impact and growing advantage on their most mission-critical issues. For more information, visit www.atkearney.com.

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The signature of our namesake and founder, Andrew Thomas Kearney, on the front of this document represents our pledge to live the values he instilled in our firm and uphold his commitment to ensuring “essential rightness” in all that we do.

For more information, permission to reprint or translate this work, and all other correspondence, please email [email protected]. AuthorsMirko Warschun, partner, [email protected]

Michael F. Strohmer, partner, [email protected]

Axel Erhard, partner, [email protected]

Natascha Schijven, vice president,Procurement & Analytic Solutions,[email protected]

Andreas Graef, principal, Dü[email protected]

Hanna Riehl, principal, [email protected]

Vijay Kasi, principal, [email protected]

Enzio Reincke, principal, [email protected]

A.T. Kearney Korea LLC is a separate and independent legal entity operating under the A.T. Kearney name in Korea.

A.T. Kearney operates in India as A.T. Kearney Limited (Branch office) a branch office of A.T. Kearney Limited, a company organized under the laws of England and Wales.

©2017, A.T. Kearney, Inc. All rights reserved.

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