Optimising pack velocity
10 April 2014
Kite Packaging Managing Partner Gavin Ashe talks to Simon Duddy about returnable packaging and the firm’s ethos.
It would be wrong to say that returnable packaging is a new trend, but in recent years it has certainly seen more attention, as firmS seek ways to boost their environmental credentials.
Kite Packaging Managing Partner Gavin Ashe sees the returnable packaging market as essentially cyclical, with companies happy to switch emphasis from returnable to one-way and back according to changing needs.
"It depends where a product is in its lifecycle and how a company deals with its customers,” says Gavin.
"For example, the automotive industry was one of the early movers in returnable packaging but many companies are moving back to corrugated because of space issues and slippage (theft).
"RTP can be very expensive. It works best when you have a true closed loop and the product is valuable, for example, in pharmaceuticals, or companies that control their own fleets, for example supermarkets.
Kite has worked with Loadhog on a multi-use wheeled pallet and is talking to a distributor at the moment about returnable packaging with a view to maximising load capacity in trucks.
"Transport cost is the driver here,” says Gavin. "They believe they can get 15% more stock in the trucks and save road miles.
"It is an interesting part of the market and has established a place as 4-6% of the overall total. With reusable, the work tends to be big projects, and therefore the work can ebb and flow. We may work for two years on a big, perhaps £1 million, project, and then the sector can be quiet for several years. It is in the realm of CAPEX whereas most packaging comes under the category of consumables.”
Kite Packaging was formed 12 years ago. In terms of ethos, it is a partnership founded business, with all employees actively encouraged to take up shares in the company. It is 100% employee owned.
The firm has relatively low staff churn and employees who take a sense of ownership and pride. Gavin believes this has a positive knock-on effect on customer satisfaction.
"We have had an excellent year. We’ve seen double digit growth in a marketplace of low single digit growth. This is down to innovation, great customer service and a clear strategy.”
"We have had an excellent year,” he adds. "We’ve seen double digit growth in a marketplace of low single digit growth. This is down to innovation, great customer service and a clear strategy.”
Kite segments its customers into two very clear categories - those who require a large volume of packaging with a high level of service; and the small and medium sized customer buying standard packaging on a standard delivery service.
"We look after the latter by having the lowest cost, most efficient web-based business in the UK,” says Gavin. "We service the former through our local branch network with key account managers, and who normally look after no more than 20 accounts, and one full time packaging technologist to roughly every 60 customers.”
The company focuses very highly in terms of bespoke packaging design, testing and R&D, to ensure the customer’s packaging needs are met.
Customers spending more than £100,000 per year on packaging are usually manufacturers, although Kite has a fair amount of distribution and internet fulfillment customers also.
These customers normally buy hundreds of SKUs. For example, Eaton corporation has 13 sites in the UK, with Kite sole packaging supplier. It provides 2,600 SKUs and is the only non-US company to receive Eaton’s Global Supplier of the Year Award more than twice in a row. It has received it six times in succession.
"Bespoke designs are a key part of what we do,” says Gavin. "We are a supplier to F1 teams, providing specialist packaging for explosive components. This packaging was developed and tested in a very short time period to get get VCA (Vehicle Certification Agency) approval. The aim is not to protect the item, we are looking to protect the airplane from the item.
"We also have customers dispatching 100,000 books and DVDs a week. Their biggest issue is pack velocity, they want to get product through their packing benches as quickly as possible.
"We will put a packing technologist in, video the process, and look to see how we can tweak it, to change the packaging design slightly to save fractions of a second per pack, that mount up over time.”