Packaging

Purpose of Packaging

Packaging

Physical Protection

Barrier Protection

Containment / Agglomeration

Information Transmission

Marketing

Security

Portion Control

Material Handling Equipment in Packaging

PALLETSCONTAINER

Unit Load

A number of items arranged in one unit

Unitization

Combination of boxes, cartons, packages, pails,

etc., into one load or a PALLETISED LOADS

for ease of handling is known as unitization

Building Block ConceptThe building block concept is the whole transformation process from a individual product becoming a unit load through unitisation and then being loaded onto containers for shipping. Characteristics include:• It is a package of functionality defined to meet the business needs across an

organization.• It has published interfaces to access the functionality.• It may interoperate with other, inter-dependent, building blocks.• A good building block has the following characteristics:

– It considers implementation and usage, and evolves to exploit technology and standards.

– It may be assembled from other building blocks.– It may be a subassembly of other building blocks.– Ideally a building block is re-usable and replaceable, and well. specified.

• It may have multiple implementations but with different inter-dependent building blocks.

Inventory Management

Revisiting: EOQ Formula

EOQ = √(2AP/S)A = demand per time period (example: annual demand or monthly demand)S = carrying cost/holding cost of 1 unit of stock for one time periodP = Order Cost

EOQ – How much is the optimal quantity to order?

Example 1A company consumes 800 units of a component every year. Price per unit = Rs 10. Ordering cost per order is Rs 200. Inventory carry costs are 20% of total inventory turnover. Determine the optimal order quantity that will minimize total inventory cost [HINT: To determine carrying costs, consider 20% of price per unit]A = 800S = 10 x 20/100 = 2P = 200

EOQ = √(2AP/S)

= √(2x800x200/2)

= √(320000/2)

= √160000 = 400 units optimal order quantity

Re-Order Level (ROL)

A minimum amount of an item which a company holds in stock, such that, when stock falls to this amount, the item must be reordered

Re-order Level = Lead Time Consumption + Safety StockWhere, Lead time consumption = lead time (in days) x Daily average Usage OR Consumption Rate

Example 2

ABC Ltd. is a retailer of footwear. It sells 500 units of one of a famous brand daily. Its supplier takes a week to deliver the order. ABC Ltd. has decided to hold a safety stock equivalent to average usage of 5 days. Calculate the reorder level.

Lead time = 7 daysDaily consumption or usage = 500Safety usage = 500 x 5 = 2500

ROL = 500 x 7 + 2500 = 3500 + 2500 = 6000

Example 3

Daily consumption of a raw material in the production process in 200 units. Lead time for delivery is 5 days. Company’s policy is to keep a safety stock to 3 days’ consumption. Calculate ROLLead time = 5Consumption of raw material = 200Safety stock = 200x 3 = 600ROL = 200 x 5 + 600 = 1600 units

Example 4

Daily consumption of material ‘z’ is 500 units. The supplier takes 4 days for delivering the materials after the order is placed, What should be ROL?

Lead time = 4Consumption of material = 500Safety stock = ?ROL = ?

Sources

• http://logpackaging.blogspot.in/2007/12/concept-of-logistical-packaging.html

• http://pubs.opengroup.org/architecture/togaf8-doc/arch/chap32.html#tag_33_02

• http://pnglc.com/roro-logistics-term-definition/