The Role of Packaging in COVID-19 Business Continuity Planning
As organisations ramp up operations after COVID-19, packaging plans can play a vital role in business continuity, now and in the future.
The impact of COVID-19 has been far-reaching, according to those on the front lines of business. Many businesses were faced with cutbacks in staffing, disruption to working styles and adjustments in supply chains. In a survey of 5,800 North American businesses, 43% closed temporarily because of the pandemic.
As organisations prepare to ramp up operations, packaging plans can play a vital role in business continuity, now and in the future. Read on to see how supply chains were disrupted, how companies are going back to normal, and how they’re planning for the future with Managed Packaging.
How COVID-19 Disrupted Packaging Supply Chains
The rolling shutdown of markets and nations impacted company supply chains, particularly with packaging needs. Mark Maxwell, BillerudKorsnäs Global Accounts Manager, said the shutdowns in Asia affected packaging strategies.
“Asian countries shut down at different times as COVID spread around the world in waves,” he said. “China shut down first, so some companies shifted volume to their suppliers in Vietnam and Indonesia, but then those regions closed down and had to shift back to China.
“It was like a game of tennis.”
Johan Månsson, BillerudKorsnäs International Sales Manager, said these challenges demonstrated the importance of flexibility in the supply chain.
“This showcases the importance of a steady and reliable supplier with a larger footprint that has the ability to ‘move’ with the company and quickly change their sourcing,” he said.
Challenges for Companies and Factories
Companies faced other challenges during this crisis.
“A lack of sales was a challenge as stores were forced to close,” Månsson said. “Companies needed to pull the handbrake on production to avoid overstock.”
Lani Ernst, BillerudKorsnäs Global Account Manager, highlighted packaging changes.
“For us, it was a matter of working with our brands' factories to ensure cartons were getting to them as they needed them during the various stages of lockdowns occurring across Asia,” she said. “There was constant communication with the brands and with their factories to demonstrate a state of readiness and support.”
Limitations for Companies and Factories
Many companies and original equipment manufacturers ran up against unexpected packaging limitations during the pandemic. Some of this was because of their own packaging decisions made long ago.
“Having OEMs source their own packaging limits the availability to that specific region, so if sourcing shifts to another region, they will need to find a new source for packaging,” Maxwell said. “Regional packaging sourcing creates inconsistent materials, printing and performance, which can hurt brand image and increase product damage.”
Maxwell said other issues impacted packaging depending on their source.
"Supply chain limitations due to COVID meant switching sources for raw materials, so we worked with our network of suppliers to ensure performance specifications were consistent regardless of the source,” he said.
How Companies Are Going Back to Normal
As businesses face uncertainty about reopening because of the pandemic, they are taking a look at their processes, including packaging supply chains and sourcing, with an eye toward improving and planning for the next challenge. Managed Packaging is here to help.
Businesses Are Reexamining How They Do Business
A look at supply chains and sourcing of needs such as packaging is being taken by businesses across the globe.
“The pandemic shows that supply chains need to be flexible,” Maxwell said. “It is important for companies to have visibility to all of their sourcing channels.”
Businesses Are Reconsidering Flexibility
As they examine their own response to the pandemic, businesses can create new strategic partnerships in areas such as packaging.
“With the pandemic and the way we are able to support in multiple countries despite rapid change in sourcing, we are more of a strategic partner,” Månsson said.
Businesses Are Finding Backup Suppliers
After being cut off from their regular packaging suppliers, organisations are considering how to make sure this doesn’t happen again.
“The pandemic has forced companies to make changes in sourcing packaging,” Maxwell said. He said concern about backup suppliers has moved BillerudKorsnäs to work more closely with companies to plan their future packaging needs.
How Companies Will Plan for the Future
Business continuity plans are being revisited by all organisations in wake of COVID-19. Many companies are identifying key areas to formulate new plans for the future. PwC identified six key areas for organisations to focus on:
- Crisis management and response
- Finance and liquidity
- Operations and supply chain
- Strategy and brand
- Tax, trade and regulatory
For organisations reexamining operations and supply chain, there are three adjustments that our experts recommend.
Pursue Business Continuity
National closures in Southeast Asia challenged companies like never before with regards to packaging. Organisations now need to factor packaging sourcing into their business continuity plan.
“As a company's product sourcing strategy changes, they need to include how they are going to source the packaging,” Maxwell said. “Both product and packaging need to be parallel.
Although packaging can be a last-minute consideration, Maxwell said it is critical to think of both product and packaging together for the best outcome.
“Product isn’t going anywhere without the packaging,” he said.
Pursue Packaging Strategies
As vital as it is to have packaging under control, an organisation also needs to make sure it can be nimble and to respond quickly to challenges.
“Communication is vital among brands, OEMs and packaging suppliers needs to take place so everyone has the right materials at the right time with little or no leftover materials,” Maxwell said.
Pursue Strategic Partnerships
With the right partnerships, companies can weather the storms of unexpected crises, such as COVID-19. By partnering with the right companies, organisations can be assured that they’ll have strong plans in place.
“It's important to leverage strategic suppliers who have the global network of people and locations on the ground, to be adaptive and flexible,” Ernst said. “This ensures supply no matter the force or factor that can cause disruption.”
How BillerudKorsnäs Can Help Your Business Continuity Plan
A solid business continuity plan can only benefit with strong partners. Reach out to BillerudKorsnäs to find out how we can come alongside your organisation with a strong Managed Packaging plan that will address your supply chain and packaging needs.
We also offer an eBook on the 5 critical steps in the packaging development process. Download “From Concepts to Reality” today.