This article first appeared in Digital Edge, The Edge Malaysia Weekly on May 24, 2021 - May 30, 2021

Every year, new eco-friendly brands mushroom on social media platforms, highlighting their use of sustainable packaging made from recycled, recyclable or biodegradable materials. Missing from the equation, however, are the large incumbent brands, which still rely heavily on single-use plastics and view sustainable packaging as side projects rather than the status quo.

While pressure is mounting on these manufacturers to make the switch, many obstacles still stand in their way. What seems like a simple task is actually a momentous effort requiring manufacturers to go back to the drawing board, says Fabio Tiviti, senior vice-president and ASEAN-India general manager of Infor, a US-based software company.

“Costs and margins are huge considerations for every business, and the use of alternative materials can impact the premium that consumers must pay for non-plastic materials. The popularity of plastics as a packaging material is largely attributed to the low costs and convenience associated with it,” he explains.

“On the other hand, materials like glass weigh more, which drives up shipping costs and can be more challenging to handle. Manufacturers may also need to overhaul their machinery to make the filling, sealing and labelling of the new glass packaging viable. For food and beverage manufacturers, the use of paper packaging will also impact the shelf life, freshness or appearance of the food — calling for refinements in the recipes.”

Instead of the availability of sustainable packaging options, it is rather the logistics and cost benefits that hinder most manufacturers from making the transition. However, Tiviti says that product lifecycle management (PLM) solutions can whittle down many of these barriers, especially when used in combination with advanced technology such as predictive analysis.

In short, PLM solutions manage the data obtained throughout the product’s entire lifecycle, from its design and manufacturing all the way to servicing and disposal. To illustrate, Nestlé alone has 165,000 different suppliers, which can be challenging to track without a PLM solution, let alone coordinate efforts to switch to sustainable packaging.

“PLM solutions essentially help manufacturers simplify and streamline the entire packaging process. It provides critical data insights on packaging specifications, batch formulas and shipping needs,” says Tiviti.

“This is extremely valuable for project managers, as it enables them to stay informed on the progress of transitioning to new packaging — such as collaborating on and documenting strategic decisions, as well as determining dynamic pricing algorithms and go-to-market tactics.“

With essential data collected, manufacturers can deploy predictive analysis to garner insights and help manufacturers compare “what if” scenarios as they consider different packaging materials and pricing options, he adds.

Industries that require rapid turnarounds and close insights into the product’s lifecycle will stand to benefit most from PLM solutions. Such industries include F&B, as well as consumer packaged goods (CPG). 

However, Tiviti points out that any forward-looking manufacturer should get a head start in making the switch to alternative packaging materials. This will position them ahead of the competition and enable them to potentially reap greater rewards in the long term. “Aside from the cost and efficiency gains from labour and operations, PLM solutions present brands with a way to capture new segments of the consumer market. In today’s climate, sustainability ranks top of mind for businesses and consumers,” he says.

“For brands and manufacturers looking to stay ahead of the curve and on the pulse of consumer demands, transforming their operations and packaging strategies for sustainability will be key. In fact, a 2017 study by Unilever found that a fifth of consumers make purchasing decisions based on their perception of whether brands share their values, which presents sustainable packaging as an untapped opportunity of over US$1 trillion.”

Despite the opportunities they present, manufacturers face many difficulties trying to implement PLM solutions into the workflow. Tiviti points out that isolating mission-critical information and managing the human front are two of the biggest hurdles they need to overcome. 

“There are countless teams involved in the production process, and PLM solutions need to ensure that information is accessible to every individual involved in the process. The inability to migrate information accurately and quickly could be detrimental to a company’s operations. To reduce hurdles during implementation, corporations can look to adopt industry-specific PLM solutions that are purpose-built for their business needs,” he explains.

“As with any major change, there may also be some initial resistance from employees who are already used to existing workflows and processes. So, it is important for managers and administrators to communicate the advantages of adopting new solutions.”

Tiviti recognises that the shift away from plastic packaging is not an overnight process and will require buy-in from stakeholders both within and outside the organisation. However, companies need to kick-start the transition by conducting feasibility studies, in which PLM solutions will play an instrumental role.

For years, the government made great efforts to reduce single-plastic use by addressing the rising demand. Yet, bans and levies on plastic straws and bags have barely made a dent in the high domestic plastic consumption. 

Prior to the pandemic, an average Malaysian consumed about 16.78kg worth of plastic packaging each year — higher than China and other Asean countries, according to a 2020 World Wildlife Fund (WWF) Malaysia report. 

This figure has yet to take into account the boom in food takeaways and e-commerce deliveries during the pandemic. For example, a single meal may contain up to six different forms of plastics, from chilli sauce packets to the separate packaging for noodles and soup.

At this inflection point, suppliers and manufacturers can no longer sit on the sidelines if Malaysia is to fulfil its commitments to the 2015 Paris Agreement. “Tackling sustainability requires a well-rounded approach from all stakeholders — including the public and private sector, right down to the man on the street,” says Tiviti.

“While consumers can do their best in reducing plastic consumption, nothing is better than preventing plastics from entering the value chain in the first place. Starting from the upstream, manufacturers and large corporations can play an effective and powerful role by limiting the amount of plastic used.”

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