This section presents a case study on an Italian wholesaler; its main activities consist of purchasing goods from suppliers and selling and distributing them to retailers that in turn sell to end consumers through a “real shop”.
The wholesaler is interested in starting a new business: the e-commerce activity. The wholesaler wants to sell directly to end consumers, bypassing the retailers and, at the same time, continue the B2B transactions.
Traditionally, the wholesaler receives goods from suppliers in the receiving area; the goods are unpacked, sorted and stored in the warehouse. When a retailer asks for products, they are picked from the shelves and packed according to the retailer’s order. After that, the products packed in secondary packages are loaded onto the truck and dispatched to the retailer. Finally, he sells the products to end consumers in real shops. The packages are not labelled with identification technology (e.g. barcodes, RFID, etc.).Figure 8.13 shows in detail the activities of the wholesaler.
The project concerns the study of a new packaging system (in terms of material, shape, accessories used for protecting the product) to be used for online shopping. The new package has to take into account mainly the logistics aspects required by the e-commerce business.
The wholesaler has defined several requirements for the new packaging solution:
- Protection of the product: products contained in secondary packages have to be protected from mechanical shocks, vibrations, electrostatic discharge, compression, etc.;
- Handleability: the ergonomic aspect, that is everything relating to adaptations to the human physique and behaviour when using the product, has to be considered; the package has to be easy to open, easy to grip and user-friendly;
- Security: packages must ensure secure shipping. It is necessary to install identification technologies, like RFID tags or barcodes, in secondary packages in order to reduce thefts, increase security, and reduce costs and time spent on the traceability of products;
- Respect for the environment: the package has to be recyclable, in line with the requirements of end consumers and has to have minimum environmental impact;
- Re-use of packages from the supplier when the products back to the wholesaler.
The research activity starts from the study of several typical orders defined by the wholesaler in order to determine the best packaging configurations that optimize the combination of logistics, protection of the product and re-use of packages. The wholesaler decided to re-use the cardboard boxes in which the products are sent by suppliers. This solution minimizes the packaging system costs and reduces the environmental impact. According to these considerations, Figure 8.14 shows an example of the secondary package chosen.
After that, the accessories are chosen in order to protect products from mechanical shocks, vibrations and compression during transport. Pluriball, polystyrene and interior cushioning are chosen as flexible protective accessories (an example of interior cushioning is shown in Figure 8.15).
The authors have analysed the possibility to install RFID tags on secondary packages in order to find out the position of the products in real time and to increase security during transport, minimizing the possibility of thefts and loss of products.
The new packaging solution presents several advantages in terms of:
- Protection of the product: the products inside the packages are protected thanks to the accessories used that increase the protection of products, damping the shocks during transport;
- Handleability: the package is user-friendly, easy to handle and to open;
- Security: the installation of RFID tags in the secondary packages allows the wholesaler to increase security during transport, reduce the number of thefts, and find out the position of the package at all times. This aspect may also be important for the end consumer since he can verify the position of the product he has ordered;
- Respect for the environment: the packages and accessories used for the e-commerce business can be recycled (the cardboard box is paper and the interior cushioning plastic) and secondary packages are re-used: the wholesaler use the cardboard with which the products arrive from the suppliers for dispatching products to end consumers.
In order to define a new packaging solution for the e-commerce business and, according to OM discipline, the strategic, tactical and operational levels have to be analysed. The definition of a new packaging solution for the e-commerce business, allowing transactions costs to be minimized and leading to an increase in business, is a strategic decision. The tactical management defines the main packaging requirements and the operational level has to implement the solution. The activities of the operational level are to test the products and packages in order to verify the resistance to shocks, build the website from sell by the WWW, study the shape, materials and accessories for packages, define a package that is as easy as possible to handle and transport and analyse the installation of RFID tags in secondary packages. Figure 8.16 shows in detail the decisions and operations at all levels in the pyramid of the OM decision levels.
The new solution is implemented by the wholesaler and implies several benefits: an increase in sales with minimum effort, a reduction in transaction costs and an increase in customer satisfaction thanks to the environmentally friendly packaging. Moreover, the products are now traced every time and in real time, thanks to the installation of RFID tags in secondary packages, reducing thefts, loss and increasing security.
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