Using Risk Management to Navigate Your Packaging

Written by: Jordan MacAvoy, VP of Marketing at Reciprocity Labs



From the production to the marketing stage, the profitability of your product is only as good as the weakest part of its value chain. This is why ensuring that you uphold high-quality standards throughout your daily operations is essential- and your approach towards packaging can be one of the most consequential parts of your supply chain. Other than ensuring that products are safe while in transit, the packaging of your product plays a pivotal role in attracting customers to buy your product.


Simple packaging mistakes could lead to your profitability plummeting. For instance, if the package doesn’t secure the products and they arrive to end-users while damaged, the chances are that customers will avoid doing business with you in the future, with some choosing to sue your company. Like every other part of running your business, packaging requires you to understand the inherent risks that come with it and work on ways to mitigate these risks. With a strong risk management strategy, reducing common packaging risks can be quite easy.


Here is how to weave risk management into your packaging for the sake of your business’ sustainability:


It Starts With Risk Identification and Assessment

Most packaging risks are quite easy to spot. For instance, the risk of mislabeling your products is rather obvious to identify and mitigate. Identifying such risks will be as easy as brainstorming them with the rest of your workforce, and creating a list. For the less-than-obvious risks, such as mistakes in branding your packages, it might pay to approach risk identification through other methods.


You can start by researching common mistakes made by the competition in your industry, attend industry workshops, conduct lab tests, speak to professionals in your industry, and conduct market research on the ideal packaging customers want. Once you have outlined all of these risks, you should then proceed to assess them. Assessing the risks helps you to understand the likely impact they can have on your business and how to rank them.


When assessing the risks, you should classify each one according to the impact it will have on the business, as well as the likelihood that the risk will come to life. Later, you can design a risk assessment matrix to help rank the risks. This makes identifying the best risk treatment options to use quite easily.


Choose Risk Treatment Options

There are four ways to treat packaging risks, which are contingent on your business’ risks tolerance, as well as your current resources. These include transferring, ignoring, accepting, and mitigating the risks. For any risk that seems too huge for your current business resources to upset, it might be wise to completely ignore it by avoiding any business operations that could lead to it.


If you can handle a risk in-house with your current resources, implement control measures to help mitigate it. In case a risk can better be handled by a third-party individual or business, you should transfer it to them. For instance, the risk of incurring financial losses from damaged in-transit goods can be offset by purchasing liability insurance. Lastly, if a risk is too trivial to have an impact on your business, you should accept it and proceed with business as usual.


Monitor and Audit Risk Treatment Options

The risk treatment options you opt for should be scrutinized through strong QA/QC strategies. This helps you to have some level of control over the inherent risks and control risks that can arise. Ideally, you need to set up policies, procedures, and processes to aid with the monitoring of your current control processes.


These measures should help detect faulty risk treatment controls and outline the best way to move forward. You should also have an auditor regularly review these measures to ensure that they are fool-proof. Not only will this help you identify loopholes, but it will also point out new packaging risks that may arise. Remember, packaging risks are dynamic- today’s risks landscape can change quite drastically. For instance, new risks can emerge, deeming the old risks treatment options obsolete.


Communicate and Delegate

Risk management is an organization-wide endeavor, and all hands need to be on deck. For instance, if you opt to use a certain format for labeling your product packages but fail to communicate it with new recruits, the chances are that there will be confusion on the labeling of your products. This could easily lead to the products being wrongly delivered or mishandled.


Take your time to communicate any risk control measure you opt to work with. You should also make it possible for employees to provide feedback on the effectiveness of these controls. This communication loop helps identify loopholes in your control measures before the products can get to the market and wreak havoc. Lastly, ensure that you delegate the different risk control tasks to specific individuals to ensure high levels of accountability.


Packaging mistakes can set your company back monumentally, both financially speaking and reputation-wise. With risk management by your side, it becomes easy to have a bird’s-eye view of your risk landscape and exercise enough control. Uphold high risk management standards to strengthen your product packaging practices.


Jordan MacAvoy is the Vice President of Marketing at Reciprocity Labs and manages the company’s go-to-market strategy and execution. He is also part of our contributor team for PackageIntegrity.com, to learn more visit his Bio Page.

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