Industryweek 1569 21053 Pat Smorch

Georgia-Pacific Seeks Sustainability Throughout the Supply Chain

Feb. 10, 2010
New packaging processes are streamlining operations and reducing total systems costs.

Georgia-Pacific, a manufacturer of pulp and paper products, has developed a Packaging Systems Optimization (PSO) program that aims to create more sustainable processes throughout the supply chain. At the heart of the program, explains Pat Smorch, director of packaging sustainability at Georgia-Pacific's Innovation Institute, is the intention to provide industrial and consumer product companies with new ways to streamline operations and reduce total systems costs.

"The program hones in on efficiency and waste reduction throughout the supply chain and maps out sustainable fixes that improve the bottom line," Smorch notes. "Everything from material optimization and package design to material handling and distribution are analyzed." The PSO program is part of an industry trend where companies are learning how to do more with materials they already have.

"The program hones in on efficiency and waste reduction throughout the supply chain."
-- Pat Smorch, director of packaging sustainability, Georgia-Pacific's Innovation Institute

For instance, Georgia-Pacific has designed corrugated boxes that have reduced fiber content, saving material costs and reducing package weight while maintaining strength and support. Smorch also cites square-shaped milk containers at warehouse club retailer Sam's Club and Eastman Chemical's shrink labels made with 20% less material as other examples of this trend.

Eco-friendliness isn't always obvious on first glance, as sometimes larger package sizes -- particularly those popular at warehouse club stores -- can end up being a better option than single-serving sizes. Georgia-Pacific, for instance, helped Honest Tea, an organic iced tea brand, move into club stores by transitioning to a 24-drink multipack.

"The new option gave the brand more shelf appeal and visibility and was 41% lighter, saving on shipping and fuel costs," Smorch explains. "In addition, the new multipacks are made with 35% post-consumer waste, and the handle is made with 45% post-consumer waste. Annual reductions in fiber use were 1,200 tons, 2,600 tons of carbon dioxide emissions were eliminated based on the manufacturing process, and 12,369 MM BTU of energy savings were calculated per year as a result of the transition."

Georgia-Pacific's Innovation Institute provides industrial and consumer-product companies with new ways to streamline operations and reduce total systems costs.

On the transportation and distribution side, supply chain-savvy companies are always looking for ways to save costs during warehousing, routing and delivery. "The bigger the warehouse the greater the lease costs," Smorch points out, "so ensuring that inventory is kept at a minimum is job number one for any industrial engineer. In addition, maintaining an eye on inventory allows management of products from the time they arrive to the time they reach the customer."

Georgia-Pacific, for instance, encourages CPG manufacturers to consolidate SKUs as a matter of economics. "Companies with 50 or more SKUs pay more for packaging because suppliers must run shorter production runs to account for greater variety. Shorter print runs also lead to more down time and more waste in time, energy and capital. By simply designing packages that meet more universal needs, these SKUs can be drastically reduced, saving time and money and improving supply chain processing down the line," Smorch observes.

In addition, the PSO program has advanced sustainable practices throughout the transportation process, particularly when it comes to replacing heavier materials such as glass with new corrugated boxes and lightweight containers. "The lighter the load, the less fuel it takes to haul," he points out. "It's a simple law of physics."

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