February 24, 2017

Beyond the 43: Packaging Information

closeup shot of numbers on a screen

Packaging logistics helps minimize costs by improving inventory planning procedures and speeding up the inventory receipt and put-away processes. As the industry moves from a traditional business model towards eCommerce and supply chain digitization, the use of accurate packaging information becomes even more vital to ensure optimal operations.

By knowing the size, weight, and number of units in a pack, this information benefits daily operations such as internal material flows, distribution, unpacking, disposal, and return handling, etc. Let’s say a distributor wants to buy several items from their supplier. The distributor needs to know how many pieces are in a standard carton to order more efficiently, as well as the dimensions of the standard packages to plan their warehouse shelf space for optimal order put-away. The distributor can also use the weights, dimensions, and the volume capacity to cube out their trucks when shipping products to the end user. All packaging data is associated with the Universal Product Code (UPC) assigned to each stock keeping unit.


Packaging information 101

The Global Data Synchronization Network (GDSN) defines the base unit of any product’s packaging hierarchy as an each. In retail, this is the actual consumer unit that is stocked on store shelves and scanned at the cash register. For instance, if a company sells and ships lightbulbs, an “each” refers to one of those lightbulbs.

In the electrical industry, eaches are usually grouped together and packaged in a carton, a box, a jar, or a bag that may be referred to as the “inner pack” or “multi-pack.” The inner packs may then be packed in a larger “case”, which is ultimately loaded onto a “pallet” for shipping. This hierarchy progresses from the each level (G55 segment per EDI 832) as additional layers of packaging are added (G39 segment per EDI 832), in preparation for an order to be shipped. The unit of measure (UOM) for every stage of packaging is always the lowest common denominator, or the each, because ultimately a distributor is interested in knowing how many eaches will be shipped in a given order.


How packaging data helps distributors

Let’s imagine Distributor A is interested in purchasing 22,500 units of pens. Per the illustration below, a pallet contains 20,000 pens and a case contains 2,500 pens, two distinct packaging levels. Each package will have its own Global Trade Item Number (GTIN) or barcode identifying the package. The distributor should expect to scan two different barcodes when the order is delivered – a barcode for each packaging level – acknowledging the receipt of a complete order.

Now, let’s say Distributor A needs to move 10,000 units, four cases, 8,000 cubic inches each, to another location. Their truck can hold a maximum of 33,000 cubic inches. Given the dimensions of the case, they know that four of them will only take 32,000 cubic inches. This means the distributor will have enough room to move the items to the other location in a timely manner. If the distributor needed to move more than their truck space allows, the distributor could break the cases and store or transport the multi-packs with the provided information for every packaging level. Their customers could order multi-packs rather than cases, and the distributor would have all the packaging information available for this transaction as well.

When supplying packaging data for their products, manufacturers need to think beyond the each level (or G55), and consider how more detailed packaging information can help their distributor sell the products. Providing full packaging data in IDEA’s Industry Data Warehouse (IDW) improves customer operations and helps move products effectively through the distribution channel, which in turn leads to better manufacturer-distributor relations and better business.