Packaging has a significant impact on the cost and productivity of logistics. Inventory control depends upon the accuracy of manual or automatic identification systems keyed by product packaging. Order selection speed, accuracy and efficiency are influenced by package identification, configuration, and handling ease. Handling efficiency is affected by package design, unitization capability and techniques, and communication or information transfer between channel partners. Transportation and storage costs are driven by package size and density. Customer service depends upon packaging to allow quality control during distribution to provide, customer education and convenience, and to comply with environmental regulations. Given the increasing length and complexity of global supply chains and the costs of locating new facilities, the concept of packaging postponement to achieve strategic flexibility is particularly important.
Source: Christopher. M. (1998). Logistics and supply chain management: Strategies for reducing cost and improving service. (2nd ed.). New York: Prentice Hall.