REVIEW OF THE LITERATURE
CHAPTER 5 ANALYSIS AND DISCUSSION
5.5. Industrial Customers (IC)
5.5.1. Questionnaires: Industrial Customers (IC)
This sector, the third link in the supply chain, represents the first consignee of the packaging in its final form (after it has been manufactured). In Question IC1, the participants were asked in which sector they belonged. Question IC1 combined with IC2 and IC3, helps to make this categorisation more specific, since in IC2 the different sectors of the Industrial Customers, are asked to state the volume of packaging that they use during a time-period, per material and in IC3, to show the proportion of packaging that they use during the same time-period per material.
However, IC2 was expected not to be answered precisely, due to the difficulty of recovering such data by the companies (especially by those that do not operate an Electronic Requirement Planning system) and furthermore, due to the hesitation of companies to provide sensitive data relevant to their operations.
The answers in IC2 would have helped to validate the data concerning the packaging materials in circulation, comparing the results in different sectors (mainly
165 between Suppliers, Packaging Manufacturers and Industrial Customers).
Nevertheless, for the above reason and because of the fact that the research could proceed without having the exact numbers in the specific issue, IC3 was included as an alternative question, providing general data that at the same time were sufficient enough to make meaningful conclusions.
Question IC4, investigated what amount of packaging that the Industrial Customers use, is recyclable (in total or per material). The purpose of this question was to identify if the industries know about the specifications of the packaging they use and which sector (if there were any), that uses the most environmentally friendly packaging. In addition, the results were indicative of the present situation and gave evidence if there is ground for future improvements in the issue. For example, if a high proportion of companies don’t use recyclable packaging, then the government could force these companies (mainly using taxes), to substitute their packaging with that produced with more environmental friendly materials.
Questions IC5 and IC6 were included in order to ascertain cases of packaging failure. The participants, in Questions IC5 and IC6, are asked if they had noticed any packaging waste due to improper handling and what proportion of the total packaging they use ends up in waste.
The purpose of the above two questions was to underline the importance of keeping high standards in the quality of packaging produced. Furthermore, these questions along with questions:
• WR2 asking Wholesalers and Retailers if they have ever noticed damages and in what frequency in the products due to improper handling, that happened either in their facilities or during transportation, and
• C6 and C7, asking Customers if they had ever destroyed a product due to improper handling of its packaging and if they had ever bought a damaged product due to an improper or destroyed packaging,
would show the importance of packaging in the protection of goods and products.
Packaging quality constitutes an important issue for the market. According to Behmanesh (Iran Daily, 2006), a lot of the exported Iranian agro products are wasted due to improper or low packaging quality. Wood et. al. (2002), harmonising with the above aspect, state that ineligible packaging, undermines the quality of the products and thus large amounts of food (and other goods as well) becomes unserviceable.
Chapter 5 -Analysis and discussion
166 In Question IC7, Industrial Customers were asked if they have ever thought of using – where possible - only recycled packaging materials. The purpose of this question, was to understand if the Industrial Customers had ever thought of acting in a more environmentally friendly way, without being forced by the government or other external factors. This question, could constitute an important source for future research, examining the main factors that mainly force the companies to proceed with serious changes in their operations.
Questions IC8, IC9, IC10 and IC11, are informative in order to understand – once again- if the participants knew about the Directive, if they think that the implementation of the Directive is going to be affordable –in terms of cost or taxes-, if the use of take back programmes can result in source reduction and a more environmentally friendly way of doing business and finally, if they believe that their operations are going to be affected and in what way.
As already cited, questions concerning the public opinion on the specific Directive, have been included in all questionnaires in order to understand if there will be acceptance or opposition in the (Greek) market, when the government decides to implement the Directive. It was expected, that the Industry would not be open in such a process, especially when it is expected that the law is going to generate new costs and aggravate their operations. For this reason in Question 13, industries were asked what they intended to do with the extra cost that the new taxes are going to generate. In most of the cases, it was expected that the industries intended to push that cost down to the next link of the supply chain (and finally to the final consumer).
Question IC12, asking the Industrial Customers whether they intended to require suppliers to provide them with lighter packaging (where possible), in order to reduce the amount of money that they will be called to pay, combined as already cited with PM10 and WR12, shows the intentions of the industry to use –under some conditions- lighter and maybe more environmental friendly packaging. However, packaging quality –as already discussed- is crucial, since an eventual downgrading of the quality, could result in defective, non usable and inappropriate products. For this reason, it combined the outcomes of IC12 with Questions IC5 and IC6, along with WR12, C6 and C7, asking the same question to all of the participants and different links of the supply chain (except from the Suppliers and Packaging Manufacturers, that do not use packaging in the same manner for their products), if they had ever destroyed or received a damaged product, due to improper handling or unsuitable packaging of the product.
167 Question IC13, investigated the main issue, discussing the possibility of the participants to push (to the next link of our supply chain), the cost generated by the implementation of the Directive. In a hypothetical situation, where the other links of the supply chain have already increased the prices of their products (after the implementation of the Directive), it was expected that the link of the Industrial Customers would do the same and push that cost to the next link, namely Wholesalers and Retailers. But here is where the problem begins. The Wholesalers and Retailers are thought to have the strength to push their suppliers to keep prices down. So, how will the industry incorporate the extra cost into their prices, since they struggle under the competition? Is it here, where there is a serious problem, where the whole supply chain pushes the cost down to the next link, but this cost is – expected to be- absorbed by the Industrial Customer, that due to the competition, in most of the cases is forced not to push it down to the powerful Retailers and Wholesalers? And what if Wholesalers and Retailers, decide to increase their imports from countries outside of the European Union, where they don’t implement similar environmental laws or if their environmental taxes are disproportionately lower, compared with the domestic European market?
In the present global economy, where stable, consistent and trustworthy supply chains operate, it is now more easier than ever for a trader to expand and start doing business with companies operating on the other side of the world.
Developing countries can provide the rest of the world with low cost products. As Norman F. Klopp Jr. executive vice president of investment research for an investment firm in Cleveland, USA, cites: “The inability to raise prices in large part is the result of tough global competition, which now is a permanent fact of life in manufacturing” (Prizinsky, 1997).
On the other hand, in cases where the link of the Wholesalers and Retailers do not intercept between the Industry and the Final Consumer, then it is easier for the Industry to incorporate this cost, into the price of its product. This will be discussed later in the “Consumers” section below.
In Question IC14, participants were asked to say what process they think is better (recycle, reuse, incineration or disposing) concerning the most common packaging materials: paper, plastic, metal and glass. This question was included in order to be compared with S9 (where the Suppliers were asked: “Is it more environmental friendly to recycle the waste or to produce new raw materials, in terms of energy and natural resources?”). The comparison, along with the results of WR14 and C13, where Wholesalers-Retailers and the Consumers were asked the same
Chapter 5 -Analysis and discussion
168 question respectively, was expected to reveal if the consumers and those parts of the supply chain that do not participate direct in the packaging manufacturing process, are well informed concerning the environmental effects from the final manipulation of the used packaging. If the Wholesalers and Customers believe that the plastic packaging should be recycled, but instead the Suppliers, answered that plastic recycling is not environmental friendly in terms of natural resources, then the view of the public that packaging should be recycled in order to protect the environment, is wrong.
5.5.2. Results of the Questionnaires: Industrial Customers (IC)