Company spotlight: Smurfit Kappa
What does your company do?
We are one of the leading providers of paper-based packaging solutions in the world. We work with companies both big and small all across the UK – creating intricate packs for the health and beauty sector for example, to developing complex packs to ship motorbikes across the world. Every day brings a new challenge!
We know the eRetail market has been growing at an exponential rate over the last 10 years and will continue to do so in the years to comeWhat is your USP?
Jason Peckham, Smurfit Kappa
To start with, I’ll mention sustainability, which underlies everything we do in our business. We are a closed-loop manufacturer, meaning that we make the paper in one of our two UK paper mills, convert into boxes then recycle through our recycling plants which is then sent back to our paper mills. In addition to sustainability, our ability to print using a variety of different inks and processes means that, when coupled with our design expertise, we are able to offer our customers quite unique solutions, allowing them to differentiate in the marketplace.
We have both large and small factories located throughout the UK, meaning that we are able to not only service large customers, but small to medium-sized ones also. We have a Machine Systems side of the business, allowing us to design and build bespoke machinery for our customers to assist in the packaging process – something that increasingly, more and more eRetailers are interested in.
Finally, we have sector experts for eRetail, who focus solely on the supply-chain, operational and branding needs of the eRetailers.How would you describe your business’ vision?
Our ethos is all about adding value to our customers as opposed to adding cost. To become the partners of choice for both eRetailers who are both small and maybe growing at substantial rates, or big and well established who may know more about what they want but need some expertise to refine the process or packaging requirements.
For me, that leads to creating long-lasting, memorable packaging that impacts positively on the consumer.What are you doing currently in the ecommerce/multichannel market?
We are working with a number of the Top500 retailers, creating innovative new packaging solutions which are fit for the eRetail supply chain without compromising the functionality of the pack, or the unboxing experience for the consumer. In addition to this, we work with a number of key players in the FMCG market on innovative projects as they are beginning to focus more on utilising ecommerce as a route to market.
eRetail packages are sent out rather than being displayed on a supermarket shelf, so you have different challenges to wow the end user, or the person experiencing the packaging. There’s a loyalty challenge for some of the big brands. You’ve got to ensure the brand message is echoed throughout the supply chain, particularly through the customer experience when they receive whatever it is they may have ordered online.How does this compare to what your competitors are doing?
Traditionally I would say larger UK packaging manufacturers have been present in the FMCG market. That’s where their heartland has been and it’s been the smaller players who have been focusing more on eRetail. We know the eRetail market has been growing at an exponential rate over the last 10 years and will continue to do so in coming years. With the emergence of new technologies and routes to market it really comes at an exciting time for packaging managers to use the expertise they have gained over the years in different industries to push the boundaries of what can be achieved with a view to developing packaging that will help shape the eRetail market in the future.Who are your customers?
The exciting thing about working in the packaging industry is that almost every sector in the UK will require some sort of bespoke packaging, whether it’s FMCG, alcoholic beverages, pharmaceutical, or automotive. We are constantly evolving the way we work, both in terms of product and process, and developing new solutions to ensure we deliver what our customers require.What do you see as challenges in the coming year and what are you doing to meet those challenges?
I believe consumer-driven demand for free, next-day/same-day delivery will be a game changer in the eRetail market, but of course this will add significant cost for eRetailers, who will therefore have to find ways to reduce their packaging and operational costs to account for these additional overheads. At Smurfit Kappa more and more eRetailers are coming to us to improve their packaging set-up and for us to help them take costs out of our business. What we often find is that by optimising the entire packaging process we’re able to save companies significant amounts of money while improving the packaging portfolio. An example would be the type of work we’ve done with The Hut Group, which you can read more about in the case study.
Customer case study – The Hut Group
Within its portfolio, The Hut Group owns and operates the Myprotein.com ecommerce site which dispatches over five million boxes of products to their customers each year. James Buckley, head of group procurement, has recently overseen a cost-reduction project which saw the group cut packaging costs significantly. The company has calculated that changes to packaging and related processes will save the company approximately £250,000 a year.
“Across The Hut Group we’re very conscious of balancing the quality experience for customers with cost-efficient packaging,” says Buckley. “While we do have subsidiaries within the group which demand luxury packaging (www.coggles.com and www.knutsfordengland.com) we don’t need all packaging to be highly engineered and premium. In the case of MyProtein, we wanted the packaging to be highly effective in the supply chain, engineered for performance and aesthetically pleasing to customers, while keeping costs under control.”
Working with Smurfit Kappa, The Hut Group embarked on an eight month project that started in April 2015. The company went through Smurfit Kappa’s ‘eScan’ exercise, where the current packaging set-up across the supply chain was analysed in order to understand where adjustments could be made to reduce costs and optimise their packaging offering. At the core of the project was a decision to move away from the 0201 styled corrugated carton.
“When you’re dealing with five million boxes a year, that’s a lot of time spent taping the seals,” says Buckley. “Having gone through a detailed design, planning and testing process, we have moved to crash lock boxes which only need taping at the top to close in a simple action. With this new box, we’ve been able to almost halve the packing time of each order and gain a high increase in our KPIs.”
The Hut Group recently commissioned a new £120m distribution centre in Warrington, Cheshire, which has been built for optimum supply chain efficiency for the retailer. “We need to get a very high number of orders out every day, so all the automated elements and packing processes have been engineered with this objective,” says Buckley. “For Myprotein.com, we rationalised the number of box sizes we deal with down from 13 to just six, which has really streamlined pack process, minimising inefficiency and driving efficiencies.”
Buckley believes a robust process of testing and monitoring performance has ensured the right decisions were made before fully committing to box sizes and types. “We’ve found that working with a major supplier who understands the realities of the market and the practicalities of the corrugated products has delivered results. Ultimately, packing has become easier for our DC teams, customers are happy with the packaging and the protected products, and we have been able to make significant cost savings along the way.”
Smurfit Kappa IN BRIEFDate founded:
370 different production sites in 34 countriesTurnover:
€8.1bn in 2015Customers:
Tens of thousandsNumber of employees:
45,000For more information: www.smurfitkappa.com