Brand CasesSustainable package and supply network innovation by P&G China and its suppliers

Publication Date:2020-09-14
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Leading package Innovation and reusable package circular system development for sustainability

E-commerce is an important and growing channel in China. There is a need to protect these goods from damage from the stresses of transportation, i.e., transporting the goods from the manufacturer ultimately the consumer/ end user.  Previously, the goods are packaged into a transportation shipper from manufacturing site to e-retailer warehouse, and then be packed into a parcel box made from heavy duty corrugated cardboard with multiple additional protection and filler when ship to consumer. Although this system does protect the consumer goods contained therein, a significant amount of material is used in eCommerce.   There is also an environment cost associated with the use of such paper board and plastic fillers.   Given the growing trend of e-commerce coupled with the ever present need of environmental protection, there is a need to provide a packaging system, especially designed for e-commerce, that provide protection to consumer goods but also be environmental friendly. From 2017 P&G as the leading company innovated and launched the ecommerce Ship In Own Container (SIOC) package in China.  With such package innovation, not only improved the consumer experience by reducing 70% leakage and damage, but also reduced 30% parcel box dimension, reduced more than 8000 tons of paper board usage a year. By now, P&G has launched SIOC package in 10 brands. In 2019, P&G shipped 48MM SIOC package in China without additional parcel box or protection material. We plan to further expand to all brands with more than 65MM SIOC packs in upcoming year.

Picture 1:Ship In Own Container

At the same time, P&G is leading in China to launch the reusable package and develop the cycling system with our supplier and customers. From 2019, we were the first FMCG company to launch the reusable shipper to replace the traditional paper shipper when transport products from P&G to our customer. In past 10 months, we have shipped more than 120,000 cases reusable shipper in China, and we plan to roll out more than 3MM cases reusable package in next 12 months and reduce more than 1000 tons of paper waste a year.

Picture 2:Reusable Shipper

On 2020 July 6th, P&G and JD.com announced to launch a new bottle recycling program under “Responsible Beauty” project, encouraging customers to use green boxes and participate in charity programs more easily. To join the program, customers in selected cities like Shanghai and Guangzhou can buy products on JD from P&G’s brands such as Head & Shoulders, Pantene and Herbal Essences, and opt to use JD’s reusable “green box”on the checkout page. Traditionally, when customers participate in the green box program, JD couriers will take the empty box back from the customer. With this program, however, customers can keep the box and package toys or plastic bottles in the green box and scan a QR code on its surface and have the donated items delivered to a sorting location. The materials will then be sorted, professionally cleaned, and ultimately used to make products like tables, chairs and PCR grass lawn. The “Responsible Beauty“project and P&G 2030 vision globally and are keen to roll out innovative programs in the sustainability area.

Picture 3: Responsible Beauty, Give Plastic A Second Life

Supply Network Transformation for Green and Sustainability 

In fast-evolving China consumer market and retail environment, P&G has always been committing to offer superior products and efficient service to our consumers and customers.  The digitally enabled innovation on intelligence, our advantaged scale of global platform, and seamless collaboration with China industry eco-system are key game-changers. We are reengineering our supply network to be consumer-centric, highly responsive, and fully synchronized.  And at the same time, we put great efforts in our practice to reduce environmental footprint, promote environmental protection and strive for sustainable development.  Our objective is touching and improving consumers’ life, meanwhile we aspire to make the world where consumers live better. 

When we re-design our supply network for future, a key consideration is to maximize our advantage of scale and turn it into a bigger impact that is broader and far-reaching. Our renewed and upgraded distribution network enables our product closer to consumers via shorter and more efficient logistics, largely improving speed to serve, reducing one-time used packaging thru transportation network.  We partner with pioneers in the logistics industry to remove unnecessary nodes and touches, optimize transportation routes, using intelligent technology to improve truck turn-over, vehicle fill rate and reduce empty mile, to make delivery path shorter, packaging waste less, national long-haul transportation efficiency higher, regional short-haul transportation turn-over faster.  As of 2020, our new distribution network reduces our transportation distance to customers by 35%, uplifts transportation efficiency by 10%, and they contribute to 11% CO2 emission reduction in the impacted areas. 

Picture 4:re-design our supply network for future

In a rapid development, fast-changing eCommerce environment with increasing consumer needs on diversity and differentiation, we are actively innovating and upgrading our eCommerce supply chain to make it more efficient and more environmentally friendly. Cooperating with our retail partners seamlessly, breaking the silos across the supply chain physically and digitally, we establish new integrated eCommerce fulfillment platform, shorten supply chain, eliminate non-value-added nodes and touches, optimize packaging, and finally form a consumer-centric and high efficient eCommerce supply network that consists of multiple-layer and multiple-tailored fulfillment model.  It expands our practice that aims for only a courier between consumers and our production line.  As we create new superior speed and experience for consumers, we also bring operations of retailers and suppliers at a new level.  All these efforts are estimated to reduce 1,700 ton of CO2 emission every year, equivalent to 90,000 trees newly planted.

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