VALUE CHAIN ASSESSMENT OF PACKAGING
SYSTEMS
Ole Jørgen Hanssen, Synnøve Rubach, Hanne Møller and
Mie Vold, Østfold Research Foundation1
1. Background
Due to the development of the EU Packaging Directive
(92/64) and the CEN-standards 13427-13432, the focus on
packaging waste minimisation and packaging optimisation
has increased. Focus on packaging optimisation has also
been intensified from the Retail sector. In Norway, the EU
Directive has been implemented through a Packaging
Covenant between the Ministry of Environment and the
Packaging Sector, where a specific committee has been
responsible for promoting and reporting of packaging
optimisation. Also in Norway, the Retail sector has been an
important driving force for improved logistics in relation to
packaging systems.
The methodology for Value Chain Assessment of Packaging
(VCA) has been developed as a tool for companies, to get a
more holistic overview of different aspects related to
packaging optimisation. The methodology is first of all of
interest for the packers and fillers (the packaging users), but
need input from both suppliers of packaging solutions and
customers (retail distributors and stores). Companies need a
few key figures in their packaging development and
optimisation, and the VCA methodology offers a systematic
basis for calculation of these key figures.
The VCA methodology integrates both resource aspects and
economic aspects, with a focus on the whole supply chain of
total packaging systems (primary, secondary and tertiary
packaging).
Adress of authors: Østfold Research Foundation, Box 276, N-1601 Fredrikstad. E-mail address of
main author: [email protected]. Telephone: +47 69 35 11 00.
1
This poster presents the method in more detail, and with
some examples from the seafood sector (see Liodden et al.
2002).
2. Scope of the Value Chain Assessment
The scope of the VCA methodology is to give the user a few
key figures that are relevant for packaging development and
optimisation. The value chain or supply chain is in this
respect first of all related to the processes from the packer
and filler, to the final consumer (see Figure 1). In addition,
production of packaging materials, converting to final
packaging solutions and treatment of packaging waste
resources are included, through material, economic and
energy data.
Nourishment salts in circulation
Meat production
Consumed product
Material recycling
Production of
packaging
Packer/filler
Energy recovery
Used packaging
Transport to retailer
Composting
Transport to shop
Storage at retailer
Figure 1 Example on a value chain for food and packaging
3. Methodology
In the model, three main functions of packaging is evaluated
over the total value chain: communication/sales/branding,
product quality preservation and logistic efficiency (see Figure
2.
Increased net material intensity
Safe
product
quality
Communication
, branding and
sale
Optimal design
Value chain
efficiency
Increased costs
Figure 2 A model for optimal packaging design
The VCA methodology of packaging is based on a life cycle
approach, and is focused on a few key aspects related to
packaging optimisation, all estimated with the basis in 1000 kg
product packed, distributed and consumed:
- Gross Material Intensity (total mass of primary, secondary
and tertiary packaging)
- Net Material Intensity (Gross material Intensity minus the
fraction of materials being recycled into new products
after use)
- Energy converted in production of packaging and
distribution of products
- Degree of filling compared to theoretical volume of a the
packaging elements and the pallet
- Total cost of packaging, packing, distribution and handling
- Value added in the retailer shops.
An example on how Gross material intensity is calculated is
shown in Figure 3.
[all figures in kg]
fiber
Weight of primary packaging
0,08
Weight of secondary packaging
0,55
Weight of tertiary packaging
25,2
Weight of product
0,25
Material intensity for the
primary packaging:
(0,08 kg/
0,25 kg product =
0,320 kg primary packaging/kg
product
No of primary
No of
packages in
secondary
the packages on
secondary
the pallet
package
Weight separated on packaging material
plastic
glass
metal
wood
0,08
0,55
0,2
25
Material intensity for the
secondary packaging:
(0,55 kg/
(0,25 kg product *
18 primary
packages/secondary package)
=
0,122 kg secondary
packaging/kg product
Width [cm]
Depth [cm]
Height [cm]
15
9
20
39,5
50
26,5
120
80
120
Material intensity for the
tertiary packaging:
(25/20+0,2)kg/
(0,25 kg product * 18 primary
packages/secondary package
* 16 secondary
packages/tertiary package) =
0,020 kg tertiary packaging/kg
product
18
16
The weight of the pallet is
25 kg. It has an average
trip rate of 20. The net use
of material is then:
25 kg/20 trips =
1,25 kg/trip.
0,2 kg is added for plastic
wrapping.
Total material intensity:
0,320 + 0,122 + 0,020 =
0,462 kg packaging/
kg product
Material intensity for product "Good to eat"
Figure 3 Method for calculation of gross material
consumption
[kg packaging/kg product]
0,020
0,122
MI P
MI S
MI T
Degree of filling is calculated by measuring the volume of all
types of packaging in the system (primary, secondary and
tertiary) and of the product as such.
0,320
Energy use is calculated with specific data for production of
packaging materials and conversion processes, and for
manufacturing of the product. Energy use in transport is
calculated on the basis of standard truck carrying capacities
and transport over a distance of 100 km. Energy use for
cooling or freezing in retail storage is calculated on the basis
of average storage time, energy consumption and volume of
the storage.
Value chain economy is calculated through an Activity Based
Costing method, based on packing, distribution and storing of
1000 kg product.
In all the calculations, the intention has been to adjust for
product loss in the system, i.e. how much product that is lost
in each of the main step of the value chain. This will both
influence on the activity based costs (product is packed and
distributed that never give income), but first of all through
reduced income. Access to data on product loss has however
shown up to be very difficult.
4. Examples from use of VCA in sea food packaging and
distribution
The VCA methodology has been tested in several case
studies in the Norwegian Food and Seafood industry over the
last years. The main purpose of those case studies has been
to get a better and more systematic knowledge of the
packaging and distribution efficiency and effectiveness of
each company’s products. The studies have also been used as
an input to improvements in the packaging system, and to
evaluate different solutions.
The example presents results for two different solutions for
distribution of frozen fish filets; a wet pack solution in fibre
boxes and a plastic pouch solution. The wet pack boxes are
simply wrapped with plastic films (12 units in each) and
placed on a Euro pallet. The pouches are packed in fibre
boxes (12 units in each) and placed on pallets.
Primary packaging
Secondary packaging
Tertiary packaging
80
Kg/1000 kg packed fish
70
60
50
40
30
20
10
0
Gross material
intensity
Net material intensity
Gross material
intensity
Net material intensity
Wet pouch
Wet pouch
Plastic pouch
Plastic pouch
Figure 4 Material intensity (gross and net) for two different
packaging solutions
Gross and net material intensity show quite different results
for the two packaging solutions, although the total picture is
quite similar. Primary production is the most dominant in the
wet pack solution (fibre box), whereas secondary packaging
is dominant for the pouch solution. The results illustrates
some general trends in packaging development:
- If the primary packaging is changed to lighter materials,
e.g. plastic films, this must be compensated with more and
stiffer secondary packaging, and the total gross material
intensity is not significantly improved.
- Net material intensity is even not much changed, because
the new plastic laminates is difficult to recycle, at least
without chemical recycling
- Weight of pallets increase, because the degree of filling is
reduced (see Figure 7) and more pallets are needed to
distribute 1000 kg product
- Both weight and volume of packaging waste is changed
from the consumer to the retailer shop, where collection
and recycling is easier and more cost effective.
Wet pack solution
Pouch solution
MJ/tonne fish distributed
9000
8000
7000
6000
5000
4000
3000
2000
1000
0
Filet
Production Transport to Transport to
Retail
Retail store
production
of
retail
consumer distribution
packaging distribution
and store
Total
Phase in the value chain
Figure 5 Energy consumption in the value chain of frozen
sea food
Figure 5 shows energy consumption through the packaging and
distribution chain of the two solutions. The plastic pouch
solution needs more transport and storage energy, as the degree
of filling is reduced (see Figure 7). Total energy consumption is
thus about 35% higher for the pouch solution. Energy
consumption in production of packaging materials and
conversion represent less than 16% of total energy consumption
in the value chain.
1000 NOK per tonne fish packed and distributed
Energy costs
Over weight costs
Handling costs
Packing costs
Transport costs
Packaging costs
10
9
8
7
6
5
4
3
2
1
0
Wet pack
Plastic pouch
Figure 6 Total value chain costs for two different sea food
packaging solutions
Figure 6 shows the total value chain cost of the two
packaging solutions. The pouch solution is 40% more
expensive than the wet pack solution, mostly due to higher
costs in the packing process. Costs for the packaging is on
the same level, and constitutes about 20% of total value chain
costs. Transport costs are relatively low, and do not differ
between the two solutions, although degree of filling is very
different. The reason is that weight is the limiting factor in
transport, and that the costs are weight and not volume based.
Wet pack
Plastic pouch
Per cent of theoretical volume
120
100
80
60
40
20
0
Primary packaging
Secondary packaging
Tertiary packaging
Total
Figure 7 Degree of filling in the total packaging system
Figure 7 shows the degree of filling for the two different
packaging solutions, compared to a theoretical volume. The
plastic pouch solution has significantly lower degree of filling
than the wet pack, first of all due to primary packaging. Both
solutions have potential for improvements, as the wet pack
can be modified to fill the pallet better, and the degree of
filling of the plastic pouch can be increased. Low filling
degree has effects both on gross material intensity, transport
work and energy consumption in storage.
5. Discussions and conclusions
The value chain assessment has shown up as an important
tool both to follow trends in packaging use and as a tool for
improving packaging solutions. The method is first of all for
internal use in companies, but can also be used in
communication with customers.
The most important aspect of the methodology is to define a
common platform for evaluating different packaging
solutions over the whole value chain and for the whole
packaging system. Total value chain efficiency and
effectiveness of packaging can be measured both in energy
consumption and in economic terms, as a common scale in
optimisation work. Regarding environmental aspects, the
value chain assessment with the key figures shown is first of
all an instrument for packaging optimisation; i.e.
improvements within the same material solution. To make
more complete evaluations of different material solutions, full
life cycle assessments (LCA) should be carried out in
addition. The LCA will however be based on the material
and energy data from the value chain assessment. For the
two solutions shown in this study, LCA studies carried out by
students in an LCA course indicated that the wet pack
solution was far better than the plastic pouch solution with
respect to most environmental aspects.
To measure the effectiveness of the packaging solutions,
product loss in the value chain directly or indirectly related to
weakness in the packaging system should be part of the
model. Such data has however shown up to be very difficult
to get access to. With the high volumes of food waste in the
society, more complete analyses of product loss related to
packaging solutions should be carried out.
References
Liodden, J.A., Gjerde, J. & Hanssen, O.J. 2002. Value-Chain Analysis of White
Fish and Pelagic Fish Produced by Domstein Måløy. Østfold Research
Foundation, OR.12.02 (in Norwegian).