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Materials Management and Packaging

In Partial Fulfillment of the Subject
Logistics, Operations and Supply Chain Management (MMPA622)

Submitted by:

Baduya, Paul Vincent

Baduya, Edzelyn
Enriquez, Dalya
Gadia, Patricia
Napod, Klaudine
Torico, Eddie
Catahan, Jayson
Brigoli, Orly
Gapay, Leo Daren

Submitted to:

Dr. Rachelle G. Franco

25 March 2023
 MATERIAL MANAGEMENT AND PACKAGING

I – MATERIALS HANDLING

Materials management is a core function of supply chain management, involving the

planning and execution of supply chains to meet the material requirements of a company or
organization. These requirements include controlling and regulating the flow of material
while simultaneously assessing variables like demand, price, availability, quality, and delivery
schedules. The objectives of material management are sometimes referred to as the ‘Five Rs
of Materials Management:’

1. The right material

2. At the right time
3. In the right amount

And of the quality that is:

1. At the right price

2. From the right sources

Material Management Process:

The process of materials management includes all steps from purchasing materials to
receiving materials. This includes storage and warehousing, transport, and receiving. Each
step has its own goals and process.
1. Purchasing: Purchasing the right amount of goods is important for two
reasons. First, it ensures the end-user has everything they need to operate. Second, this
process can minimize the amount invested in storage and stored inventory.
2. Storage: The goal of storage is to invest in the correct amount of warehousing
space in the right places to facilitate the transport of goods in the next step. Storage can also
act as a buffer between material production and materials used to mitigate the effect of
shortages or material product mistakes.
3. Transport: Transporting the correct materials to manufacturers or others at the
right time is such a large and involved process that some companies occasionally separate it
into its own department.
4. Receiving: Receiving in materials management involves checking and
distributing components to the correct customers.

Purpose of Material Management:

1. To gain economy in purchasing

2. To satisfy the demand during period of replenishment
3. To carry reserve stock to avoid stock out

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 4. To stabilize fluctuations in consumption
5. To Provide reasonable level of client services

Material handling is much more than the handling of inventory. It’s the movement,
protection, storage and control of materials and products throughout their lifespan of
manufacturing, warehousing, distribution, consumption, and disposal. Material handling
encompasses a range of components to keep the supply chain running. This includes a variety
of equipment types (manual, semi-automated, and automated) and systems (single-level
storage, multi-level storage, conveyors, etc.)

Material handling process has four dimensions that impact efficient product flow
through your warehouse:

1. Movement: moving product from Receiving to Outgoing

2. Time: how long products live in storage, receipt of inventory-to-shipment time
frame
3. Quantity: how much product can be storage in the allotted space
4. Space: how much space is allotted or available

Material handling improves efficiency by making the logistics system respond quickly
and effectively to plant and customer requirements. For efficient movement of goods into the
warehouse, locating stock, accurately filling orders, and rapidly preparing orders for shipment
to customers.

II – CATEGORIES OF HANDLING MATERIALS HANDLING

Types Of Material Handling:
1. Manual handling involves physically moving individual containers by lifting,
carrying, filling, emptying, or lowering them. While ergonomic improvements can reduce the
risk of injury by modifying tasks and utilizing equipment like lift/tilt/turn tables, manual
handling can still pose a threat to workers, particularly when handling heavy equipment.
2. Mechanical handling systems refer to equipment that manages the storage and
movement of products. They are essential for providing an efficient and consistent product
distribution service.
3. Automated handling equipment reduces or replaces the need for manual
material handling. Most automated systems require a human operator for loading, unloading,
and driving, making them semi-automated. The increasing use of machine intelligence and
robotics is driving automation in material handling.
All material handling equipment in a facility must be part of a unified system that
adheres to the following principles:
a. Planning: Planning should include suppliers, consultants, finance
components, engineering, management, and operations.
b. Unitization: Goods should be assembled as a single compact load.
c. Systems: Integration of handling and storage activities that are cost-
effective.
d. Simplification: Handling activities should be simplified by reducing
unnecessary movement and equipment to maximize productivity.

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 e. Ergonomics: Human limitations in human-mechanical systems should be
recognized.
f. Standardization: Standardizing material handling methods allows
equipment and controls to perform various tasks instead of just one.
g. Space Utilization: The effective use of space and keeping areas
organized and clutter-free is crucial for storage within the facility.
h. Automation: The deployment of automated technology in material
handling, production, and storage.
i. Environment: Designing for reusability, recyclability, and environmental
friendliness.
j. Safety Principle: Providing safe handling methods and following safety
codes.

III – GOALS OF MATERIAL HANDLING

Material handling is a crucial activity in any organization, as it can significantly
impact production costs and efficiency. The main objectives of material handling include:
1. Cost Reduction. Lowering the cost of production is a top priority for any
organization, as a significant portion of production costs is spent on material procurement,
storage, and movement. Efficient material handling is essential to ensure that the production
process is not interrupted due to insufficient or delayed material supply. By implementing
optimized methods and technologies, organizations can significantly reduce production costs.
2. Waste Reduction. Minimizing material waste is another critical objective of
material handling. Poor storage and handling can result in material wastage, which can
increase production costs and reduce profits. Proper material handling involves ensuring the
right amount of material is ordered and used at the right time, maintaining appropriate
inventory levels, and using appropriate techniques for material movement.
3. Improved Work Conditions and Worker Safety. Material handling can
impact the safety and well-being of workers involved in the process. In the past, manual labor
was often used for material handling, which resulted in poor work conditions and frequent
accidents. By implementing appropriate material handling techniques, organizations can
improve work conditions and worker safety.
4. Enhanced Distribution. The delivery of final goods to retailers and
wholesalers can result in material damage if not handled correctly. Proper packing, storage,
and transportation can reduce damage to products during shipping and handling.
5. Optimized Warehouse Capacity. Warehouse capacity is a crucial factor in
determining the final product's cost. By optimizing warehouse layout, flooring, and aisle
space, organizations can maximize warehouse capacity and reduce overall production costs.
6. Improved Flow of Material. A smooth flow of material is critical for efficient
production. Delays or damage to material can disrupt the production process and increase
costs. Appropriate material handling techniques ensure that material flows smoothly through
the organization, reducing storage time and improving production efficiency.
7. Optimal Equipment Utilization. Expensive machinery and equipment are
used in the production process, and their performance depends on the speed and efficiency of
material supply and handling. By implementing optimized material handling techniques,

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organizations can ensure full utilization of equipment capacity and increase production
efficiency.

IV – NEGATIVE ASPECTS OF MATERIAL HANDLING

1. Additional Capital Investment. It must be verified that the cost of the

handling system is more attractively invested in the system under consideration than in any
other part of the business. It should be assured that the gains expected are not based upon a
more mechanized system v/s present practice, but rather the proposed new system v/s the best
version of present practice.

2. Loss of Flexibility. Proposed system must be flexible enough to be

economically and quickly adapted to the likely range of changes in the product or production
techniques. If not, change over cost and time loss must be included in the evaluation, or it
must be shown that the investment will be satisfactorily recovered before the proposed
handling system will require modification.

3. Vulnerability to Downtime. Since a handling system is a composite of

mechanical and electrical machinery and controls, it must be recognized that it may break
down at any times. What happens than how long will it take to get back to service and what
will be done when repairs are being made. If this is serious-, the handling system must be re-
design to provide for better reliability, for alternate handling techniques in event of
breakdown or for in-process- storage that can feed subsequent operations while be system is
being repaired. All of these can result in additional costs that must be charged against the
handling system.

4. Maintenance. If it is planned to install additional handling mechanization,

almost surely it will be necessary to take on more maintenance. This may mean the addition
of new maintenance skills, or a provision for obtaining them when needed. It may be that
extra pieces of handling equipment should be provided for use during downtime or
breakdowns. It may be necessary to plan for periodic overhauls by skilled technicians. It may
be necessary to carry a large supply of repairs parts, or a new or enlarged maintenance facility
and staff may be required.
Careful balance of the total benefits and limitations is required before wise
decisions can be reached.

V – RIGHTS OF MATERIAL HANDLING

Material handling uses the right method Process of moving, controlling, storing, and
protecting products during the overall
production process

To provide the right amount Amount depends on the usage of production

and demand of the customers
Of the right material Refers to raw material, partially finished
goods, final product, or waste product
To the right place Materials being transferred or stored at the

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 right place improves efficiency and reduces
effort
At the right time Minimizing or avoiding delays reduces
manufacturing cycle time
In the right sequence in the right Based on the System principle, movement
position including receiving, storage, production,
inspection, packaging, and other operations
should be deliberately planned and
coordinated
In the right condition Proper material handling ensures the quality
and safety of the products
At the right cost Proper evaluation of costs could avoid less
expensive but low-quality solutions which
lead to higher costs

VI – PACKAGING
Packaging is defined as all materials to be used for the containment, protection,
handling, delivery and preservation of goods from the producer/manufacturer to the end user.
In layman’s term packaging is to wrap your products.

Why is packaging important in supply chain management? Because it has a significant

impact on the efficiency and effectiveness of retail supply chains.

Packaging specifications also directly influence the time required for completing
packaging operations which ultimately affects product lead time and due date performance
(delivery) to the customer.

The roles and importance of packaging will be discussed further in the next slides.

Nowadays, packaging plays a big role in marketing/promoting the company which

protects the products during shipment and storage. Packaging displays and market the
products and we call this the functional design of packages, thus, packaging has evolved
overtime. And due to its major significance in promoting the business, most companies have
taken bigger changes from manual packaging to machine packaged products, even adding to
its roster of employees the brains behind packaging design.

VII – CLASSIFICATION OF PACKAGING

1. Primary Packaging. Primary packaging is the packaging in direct contact

with the product itself and is sometimes referred to as consumer or retail packaging. The main
purpose of primary packaging is to protect and/or preserve, contain and inform the consumer.

There are various examples of primary packaging and there can sometimes be
several components for one product. For example, for beer, the bottle containing the liquid
and the label are both classed as primary packaging. Corrugated primary packaging is often
used for gift and luxury products such as in the tech and cosmetic industry. Example: For beer
the primary packaging could be a can or bottle.

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 2. Secondary Packaging. Secondary packaging’s main purpose is for branding
display and logistical purposes. As well as protecting and collating individual units during
storage and are often used by the beverage, food and cosmetic sectors for displaying primary
packs on shelves and are sometimes also referred to as grouped or display packaging.
Secondary packaging also includes packaging purposely made to display multiple product
units for sale which speeds restocking from storeroom to shelf, this packaging includes retail-
ready packaging (RRP), shelf-ready packaging (SRP) or counter-top display units (CDUs).

Secondary packaging is predominantly corrugated cardboard packaging print

finished to a high standard, such as being lithe printed with well thought out branding and
design, due to the integral part it has to play in the marketing funnel. Example: Secondary
packaging for drinks manufacturers could include gift packaging.

3. Tertiary Packaging. Tertiary packaging facilitates the protection, handling

and transportation of a series of sales units or secondary packaging in order to group
everything into unit loads during transit. This type of packaging is rarely seen by the
consumer. Example: Tertiary packaging for bottled drinks would include transit packaging.

VIII – IMPORTANCE OF PACKAGING

1. To attract attention. Packaging holds the power to communicate brand
values and identity so consumers can make that critical connection. With packaging holding
so much influence on consumer perception of and interaction with brands, it is critical to
understand which factors to consider when designing your packaging.

2. Provides protection of the goods inside. Packaging is an important aspect of

the total process since it serves as a protective carrier for items or goods during manufacture,
sales, marketing, and distribution. Product packaging protects finished products as they move
through the supply chain management workflow, especially during transportation to
merchants and the final destination.

3. Assist in promotion. Your product packaging is not just there to protect the
actual product from damage; it is also a potential selling point. Packaging can help sell the
product because it provides space for sharing information about the product, such as
nutritional information, usage or directions. For example, some packaging contains marketing
messaging on the front to attract customers to pick it up and look at the product.

4. Provide machine identification. Ensure smooth handling of materials at the

production floor, ensure the efficient use of modern supply chain technologies like stackers
and pallets, and make for easier damage control and inventory management.

5. Help in utilization and consumption. Package must not only sell the product
but also should create desire for repeat purchases. This can be in the form of reusable features,
special giveaways or easy dispensing devices which promote repeat sales and add value.

6. Used for tracking and tracing purposes. Providing customers with accurate
shipping information and tracking updates lets them know that your business is reliable,

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which is crucial to customer retention. Track and trace systems in the supply chain will allow
organizations to keep costs down to the minimum.

7. Key part of the brand image. Packaging is so much more than just protecting
a product. It is an essential marketing tool, which supports branding, emphasizes the product's
best features and creates an unforgettable experience for the customer.

IX – CHANGE IN PACKAGING
Product design is one of the most paramount consideration for a product-based
company. In a sea of competition among similar products placed together in the same shelves,
companies must think of ways for their products to stand out. Redesigning the packaging has
a huge influence on redefining a brand identity which could ultimately impact sales.

Here are some of the reasons and considerations of companies in changing their
product packaging.

1. Budget Consideration. Some companies experience budget constraints at

some point and they are compelled to cut costs of production. When a company is too
invested in the product design and packaging which cuts too much of the revenue, a more
sustainable packaging should be considered.

2. Outdated Design. One of the common reasons for change in packaging is an

outdated design. Trends come and go and it is important for companies to keep up with
current trends to keep the brand relevant. It also helps the brand to compete against newer
products. Although it is important to know what is trending, it is also equally important to be
unique and remain recognizable.

3. Going Green. People around the world are raising concerns for the
environment. Offering eco-friendly options can help boost the brand’s image and reputation.
Changing the materials used in the containers and labels of products into renewable resources
is initiated by socially conscious companies.

4. Reformulated Product. Companies introduce “new and improved” products

by labelling their packaging as such. Change in the ingredients may also require handling
specifications that may need bigger containers, different shapes or different colors. Changing
the packaging along with the improvement of ingredients also helps consumers compare the
brand from other products.

5. New Packaging Technology. New technology offers more efficient methods

in packaging products. This upgrade gives companies more design options where they can
choose the best fit for their products. It also helps cut losses by shortening the process and
labor cost of production.

6. Rebranding. Any reason for rebranding like new products, bad publicity, low
sales, or new target consumer base requires change in the image of the product to represent a
new message and freshen up the brand in the market.

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 7. Government Regulations. Sometimes change is prompted by external factors
such as new government regulations. Government agencies act in the best interest of
consumers and seek to protect the public by mandating companies to disclose all nutritional
information in the packaging of goods or by regulating the portion of ingredients that could
pose hazard in the health of consumers. This provokes product-based companies to comply
and change their packaging.

8. Market Research. The best way to know the most effective product design
takes time, effort, and trial and error. Continuous research is important for companies to
determine which design is the most effective in drawing the attention of target consumers and
in raising sales. Introducing different product packaging may be costly but it will ultimately
increase the chances of sales success in the long run.
------- end --------

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https://www.lionmarketing.co.za/the-importance-of-good-packaging/

https://fleximize.com/articles/012727/the-importance-of-product-packaging

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