Packaging Design for Shrinkage Prevention

ECR EuropeJuly 12, 2010  

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by ECR Europe (2010)

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The 2003 ECR Europe publication Shrinkage – A Collaborative Approach to Reducing Stock Loss in the Supply Chain stated that: ‘There is an increasing recognition of the scale and extent of the problem of shrinkage in the FMCG sector. In addition, some of the consequences of shrinkage, such as out of stocks and restricted product availability, impact directly upon shopper satisfaction. Reducing shrinkage can also increase sales’.

That report promoted the adoption of the ‘Shrinkage Road Map’ – a simple but effective methodology designed to deliver real benefits to the companies who use it to tackle their shrinkage problems. The report also set out the importance of incorporating this approach into a shrinkage reduction strategy that is itself fully integrated into the overall corporate policy of the company; thus giving shrinkage management the same weight and importance as other functions within the business such as sales, distribution and marketing.

In many people’s minds shrinkage is synonymous with theft and one of the most visible manifestations of anti-shrinkage strategies is the use of security systems on and around packaging. There are, however, many other sources of shrinkage, such as damage, wastage, and administrative errors that can be directly attributable to the way in which products are packaged.

This Report and Guidelines offers a packaging strategy built around the Shrinkage Road Map. It sets out the areas in which packaging can be used to attack the broad range of causes of shrinkage with real examples of how packaging developments can be used to develop and deploy tried and tested solutions.

Because packaging design does not take place in a vacuum it sets out collaborative approaches to getting benefits across the total supply chain. It outlines the complex challenges and tensions inherent in designing modern retail packaging, and offer a series of practical guidelines the industry should consider when thinking about how to minimise the impact of packaging-related shrinkage.

As with previous ECR publications this Report and Guidelines shows how the application of a systematic coordinated approach to managing shrinkage can bring companies a real opportunity to increase profits and customer satisfaction – a win-win outcome that should make this essential reading for the FMCG sector!

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