What the word that has recently become fashionable and popular in logistics circles – co-packing – means?
Сo-packing is a combination of the English words “contract” – an agreement, deed and “packing” – packaging. Translating literally, co-packing means “contract packaging”.
How and where such packaging is carried out, how goods with the mark “three in one”, “promo” and other similar inscriptions appear on the store shelves – let’s find out with Michal Kowal, Raben Ukraine Contract Logistics Director.
“Most people perceive warehouse logistics exclusively as a place for goods storage, not even suspecting that the functional load of the warehouse is now much more diverse. Our warehouse logistics copes successfully not only with the packaging of goods, but also with related additional services: labelling, stickering, applying a barcode to a production unit, thermal packaging, foiling, arranging promotional kits, gift sets, i.e. packaging of goods taking into account the maximum needs of a particular client,” – says Michal Kowal.
Currently, the most common services include product packaging, labelling, and stickering.
Co-packing is a service for creating special promotional sets where, in addition to selecting the appropriate products, an individual packaging should be provided.
Labelling means applying information on the package with basic data about the product in the form of a text, symbol, image and barcode.
Stickering is a service for preparing and applying stickers with the necessary information.
“The legislation of Ukraine binds manufacturers or importers to provide foreign goods labelling in the national language. We provide such service», – says Michal Kowal, adding that Raben Ukraine provides all the above mentioned services on the basis of several warehouses in different regions of the country: in Velyka Dymerka town, Brovary district (Kyiv region) as well as in Lviv, Dnipro, and Kharkiv.
The packaging service has existed since Raben Ukraine launch in Ukraine. “The first customers who were interested in this service ordered packaging from us. We have purchased equipment for this group of customers,” – Michal Kowal recalls. What is the difference compared to what we have now? “We saw that in order to develop co-packing, it is necessary to improve it all the time. Packaging quality requirements are changing and becoming more stringent. The new customers we started working with are developing and reinforcing their own requirements,” – says Michal Kowal. – Essentially, we are talking about a certain philosophy – creating a new perception of packaging. And if earlier we talked about an ordinary warehouse unit, which was almost completely in line with all the rules in other warehouse’s units, then now, based on customer requirements, we understand that the co-packing means much more than that.”
Results and Prospects
Currently, Raben Ukraine is in the process of purchasing additional equipment. “We can say that we have passed successfully a very substantial season with our key customers, international companies that had high quality requirements. We provided the service at a very high level,” – says Michal Kowal, evaluating the year of 2019.
In 2019, the company initiated the co-packing zone upgrade. “We have updated the procedure. We have boosted our staff. We have gained a good experience and built a good team. In terms of figures, in 2019, Raben Ukraine increased the co-packing zone in a warehouse near Kyiv five-fold up to 2100 square meters,” – says Michal Kowal.
In 2020, Raben Ukraine with its partner intends to install two additional packaging lines in the warehouse zone.
“If you look at the warehouse layout, we planned it in such a way that it could develop with no problems. In case of additional demand within one quarter the area may be increased two-fold,” – emphasizes Michal Kowal. In addition, Raben Ukraine’s plans for 2020 include expansion of a zone with no certain temperature (ambient temperature zone).
Why Raben Ukraine?
Our competitive advantages – experience and high professionalism, modern technologies, quality, ability to provide services under different temperature conditions, multifunctionality.
Let's talk about quality
“High quality focus is at the heart of all our processes. How does Raben Ukraine ensure quality with so many different products? We always apply risk analysis. We have a division of the warehouse depending on the temperature and type of goods. For different products, we have different temperature zones separated by full-fledge walls. The presence of walls is very important, because the separation between goods ensures high quality of services provided. In this way, the spread of odours and its possible effects on other products can be avoided. If our packaging volumes will grow, then we have the opportunity to develop in this direction,” – says Michal Kowal.
We’d like to note that the Ukrainian market has changed significantly in recent years. Every year, the requirements to services quality are constantly increasing. “Customers, who previously were ready to store cargo at a temperature that did not require a clear fix, now insist on ensuring this requirement. This demand came to Ukraine from the Western Europe,” – says Michal Kowal.
Previously, the so-called “pseudo-economy” dominated on the Ukrainian market. Customers did not pay particular attention to the storage quality. Often, instead of an exact temperature zone, the client chose the ambient temperature zone. “The market has changed. There are full-fledged requirements to both the quality of storage and the quality of packaging. We are developing along with the market,” – says Michal Kowal; and thinking aloud, he continues: “Why is everything changing? The export market is no longer focused on Russia and the East, but on the Asian and the EU countries. Recipients of cargo at endpoints in these regions have strictly stipulated quality requirements. For example, if I produce sweets in Ukraine, but want to sell these to Slovakia and Austria, then the auditor comes first, evaluates the production, storage and shipment conditions of products. Therefore, all companies willing to work with the Western markets will require a high quality repackaging service from the provider.”
Raben Ukraine strives to satisfy the needs of all customers. “The co-packing zone for all our customers, including multinational companies (which have strict quality standards), should be close to the production process of the customers. This is no longer just a warehouse with its relevant services; it is a small production that should satisfy the needs of the customers in line with the rules existing worldwide. We are talking about the availability of overalls and special medical examinations for workers, these are also issues related to cleaning the co-packing zone, presence of checkpoints – monitoring the quality of both direct repackaging and people’s approach to work,” – adds Michal Kowal.
Unfortunately, the quality standards in Ukraine are still low. For example, a physical examination. Very often, it is not carried out at all. In this regard, Raben Ukraine offers on the contrary a double protection system. First of all, people who come to our work must submit a medical examination certificate. At the same time, in parallel, a corporate medical service is constantly operating on the territory of the company, which conducts an additional physical examination. The company has two categories of employees. Our full-time employees (30 persons, who work all year round) undergo a medical examination regularly. We also have seasonal workers, whom we attract through the outsourcing companies. Outsourcing companies will never get a tender award unless they prove that they provide a thorough medical examination of employees. In addition, new employees will be required to undergo an additional physical examination with us. Only then, they are allowed to work. During the peak season, we have 150 employees, including full-time staff,” – comments Michal Kowal.
How is the quality confirmed?
The co-packing zone complies with ISO standards. We constantly undergo quality and safety audits. We are talking about the standards ISO9001:2015 (Quality Management System), ISO22000: 2005 (Food Safety Management System), OHSAS 18001:2007 (Occupational Health and Safety Management System) and ISO14001:2015 (Environmental Management System). Everything is confirmed with the certificates of conformity issued by the certification authority Bureau Veritas, which we receive annually. In addition, there is also an internal audit conducted by Raben Group representatives.
Moreover, the quality of services is confirmed by audits conducted by the company’s customers. First of all, these are multinational companies that usually attract international auditors in this area. “Auditors come to us every year and provide their opinions. Last year in our co-packing zone there was not a single risk marked red,” – Kowal says.
Different temperature zones
One of the competitive advantages of any packaging zone is the multi-temperature mode. According to Michal Kowal, Raben Ukraine is now repackaging within the temperature range of 14-18 °C (exact temperature zone), which is essentially unique (not to be confused with the similar temperature mode of storage in warehouses). We can also carry out packaging in the fresh zone at a temperature of 2-6 °C (yogurts, cheeses). The company’s warehouses also have a temperature zone, which does not require special maintenance (ambient temperature zone), where it is possible to create separate packaging for an industrial group of products (for example, cosmetics), as well as for certain types of food products.
The portfolio of potential products that require repackaging services is quite wide. “At the moment, most customers are from the FMCG Food sector. At the same time, we provide repackaging services for FMCG Non-food – cosmetics and industrial products,” – Kowal says.
Under the same roof
A huge advantage of Raben Ukraine is that all services are provided under the same roof. “We provide a range of services – international and local transportation, contract logistics services (storage in a warehouse and additional services – co-packing, etc.). Sometimes it happens that goods arrive after processing at a customs warehouse. We have many imports now. Many products must be labelled in Ukrainian,” – Kowal says.
Raben Ukraine can serve imported goods in one place: for this, there are two own customs terminals, here you can apply labels in the local language. “Our partner does not have to worry about moving cargo over long distances. He doesn’t have to do unloading and customs clearance at one point, and then somewhere else additionally look for a partner for applying stickers,” – adds Michal Kowal.
Moreover, having a well-developed delivery network in Ukraine, Raben Ukraine can offer potential customers that require repackaging the pick-up of goods in the collection line, delivery to the warehouse, application of stickers and sending the goods further along the extensive distribution network in Ukraine.
A similar system operates in contract logistics. “If a client wants to receive a sticker service for a long time, he can use our warehouse space for storing goods and products batch stickering. As you can see, there are a lot of processes under the same roof of Raben Ukraine,” – summarizes Michal Kowal.
In retail and logistics, one cannot avoid the peaks; seasonality is a constant phenomenon. New Year, Valentine’s Day ... “In 2020, as the next step of the co-packing zone development, we will strive to smooth out seasonality so that there are no such obvious peaks, as it is usually on March 8 or Christmas. We are now increasing the co-packing zone, expanding the portfolio of clients precisely in order to smooth out the peaks. It is also important to note that we provide the co-packing service not only to our warehouse customers, but also to all other customers who do not need to store products in our warehouse. Moreover, the company’s scale does not matter. For example, an importer who buys 10-30 pallets in China or Western Europe is also interesting for us,” – emphasizes Michal Kowal.
Today, Poland utilizes many robots in the co-packing zone. Following current trends, Raben Ukraine is also gradually introducing automation. “You need to know the specifics of Ukrainian and Polish customers. Everything that exists in Poland — conveyors, markers, shrink machines — will literally be in Ukraine. Something we have implemented partially, something is in the process now. Our new co-packing zone is equipped with chamber-type heat shrink machines, which have an ergonomic structure and original design. The zone is also equipped with a conveyor, marking installations, video cameras, mechanical ventilation with heat recovery and modern lighting. In particular, LED systems, automatic light control systems (detecting movement and measuring the intensity of daylight) are used,” — explains Michal Kowal.
The use of robots in production is always effective and attracts attention: it is beautiful and unusual. Is Ukraine looking forward to such a future? I would answer "most likely, yes."
"What holds us back from the full implementation of robots in production processes? To implement any automation, you need to calculate return on investment. It is also very important to understand the scale of services for introducing robots. If we are talking about a client who gives 10,000 pallets, then such investments will be justified. If we look at the client base in Ukraine, then this figure is much less.
Our dream is to achieve large volumes that will allow us robotizing efficiently the services we provide,” — enthusiastically summarizes Michal Kowal.
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