Packaging and Fulfillment

When the car was first invented, models were built slowly, one whole automobile at a time, just like every other manufactured product of that era. Then in 1901, Ransom Eli Olds introduced the first mass-produced vehicle, the Oldsmobile Curved Dash, which was built using a method developed by Olds—the stationary assembly line. Years later, Henry Ford added a conveyor belt to the assembly line, revolutionizing manufacturing and setting the standard for how products would be made for the next century. Now the industry is undergoing another revolution—digital manufacturing.

What is Digital Manufacturing?

The term “digital manufacturing” describes the integration of computer systems and digital technologies into the manufacturing process. It’s an approach that relies less on traditional manufacturing practices and more on emerging technologies such as robotics, artificial intelligence, and the Internet of Things (IoT). This confluence of new technologies has created such a buzz in the manufacturing world that Klaus Schwab of the World Economic Forum coined the phrase “the fourth industrial revolution” to describe this shift.

Digital Manufacturing Technologies

From design to delivery, digital manufacturing technologies are adding efficiency, flexibility, and productivity to the entire product lifecycle—yielding higher quality products while accelerating time to market. Here are six of the most impactful of these new technologies:

Digital Twins

Digital twins are virtual counterparts of physical objects or systems. These real-time digital replicas allow companies to test new products before they are built in the real world, and can cut the time it takes to go from design to finished product. Volvo, for example, uses digital twins of new vehicle designs to virtually test the aerodynamic properties of different materials and proposed design features. Using this technology, Volvo can improve vehicle performance and create more fuel-efficient models—even before the first prototype is built.

And Volvo is hardly alone. McKinsey & Company reports product development leaders are rushing to build their digital-twin capabilities, with the global market for this technology predicted to grow approximately 60% annually, reaching $73.5 billion by 2027.

From design to delivery, digital manufacturing technologies are adding efficiency, flexibility, and productivity to the entire product lifecycle—yielding higher quality products while accelerating time to market.

Additive Manufacturing and Rapid Prototyping

Additive manufacturing, also known as 3D printing, is the process of building objects layer-by-layer using a 3D printer that converts digital data into a physical object. With its ability to create complex shapes and customized products directly from design files, additive manufacturing allows device prototypes to be produced rapidly and cost-effectively. In addition to slashing lead times, this rapid prototyping gives manufacturers greater flexibility. For example, while it’s not practical to produce a small batch of PCBs with traditional prototyping, an electronics manufacturer using rapid prototyping can efficiently produce prototype batches of as little as five units.

Artificial Intelligence

Artificial intelligence (AI) is a specific field within digital technology that focuses on developing intelligent machines that can approximate human thinking. Using machine learning and natural language processing, AI systems can learn, reason, and make decisions—mimicking human reasoning while working far more quickly and processing much larger data sets than the human mind is capable of.

With AI, manufacturers can mine and analyze vast amounts of data to optimize product design, material choice, and other facets of production. Leveraging data can also help a manufacturer better navigate its supply chain, especially when managing inventory. And AI has even been used to help manufacturers determine when it’s more cost-effective to simply raise wages vs. hiring new staff.

IoT Technology

The Internet of Things (IoT) is a network of physical devices embedded with sensors, powered by software that allows communication across the internet. At home, this technology might help you control your lights or notify you when it’s time to put your laundry in the dryer. On the factory floor, IoT technology is transforming the way manufacturers make their products. For example, using electronic tags and sensors, manufacturers can track products throughout the supply chain; inventory managers can locate devices within a warehouse; and plant operators can service equipment before malfunctions occur.

Industrial Robots

Worldwide, there are approximately 3.9 million industrial robots, according to the International Federation of Robotics. Increasingly, these machines are helping manufacturers become more efficient. For example, German automaker Mercedes-Benz has entered into an agreement with robotics company Apptronik to test humanoid robots at select Mercedes-Benz factories. These robots—such as Apollo, a 160-pound, 5’8” bipedal robot—will be used to automate repetitive tasks, according to Mercedes-Benz and Apptronik.

Augmented Reality

Augmented reality (AR) uses computer-generated images, projected onto or near a real object or scene, to enhance our perception of the real world. From flight training to road navigation, this technology is changing our world. For manufacturers, AR has proven to be a productivity-boosting enhancement in production.

Traditionally, manufacturers share work instructions through physical or digital manuals. This requires workers to switch their attention from the product they’re working on to a book or computer screen. But with AR, important information is projected directly onto the work surface, eliminating switching time and decreasing the distraction and fatigue that workers can experience when required to constantly shift focus.

Some Key Benefits of Digital Manufacturing

Digital manufacturing technologies offer many benefits to manufacturers.

Increased Efficiency: Digital technologies allow manufacturers to create new efficiencies. In 2019, for example, General Electric discovered that using AR glasses at its jet engine manufacturing facility increased the productivity of the engine mechanics.
Faster Innovation Cycles: Advanced design tools and virtual prototyping allow products to go from design to finished product faster than ever before.
Improved Customer Satisfaction: Digital manufacturing technologies give manufacturers the flexibility to rapidly adapt to market shifts.
Cost reduction: AI systems are enabling manufacturers to streamline manufacturing processes to save time and reduce material waste. Access to detailed data also enables manufacturers to keep manufacturing machinery in peak operating condition through predictive maintenance, avoiding costly shutdowns and delays.
Better Quality Control: With real-time monitoring of manufacturing processes, product issues can be identified and corrected immediately. Manufacturing processes can also be more easily standardized, leading to higher quality products.
Greater flexibility: With advanced technology, manufacturers can now quickly reconfigure production lines for different products and varied batch sizes.

How to Start Your Digital Transformation

Given the many benefits of digital manufacturing, it may be tempting to dive straight into the process. But before starting your digital transformation, you need a plan. A blueprint, or operating model, will provide a clear vision of what your finished manufacturing system will look like once it is complete, and will help you stay on track during your transformation.

In order to develop a reliable blueprint, you need to first evaluate your operational value stream—the sequence of activities required to deliver your product or service to your customer. Once you’ve clarified your production steps, you can prioritize the business process improvements that will have the most impact. For example, if your goal is to cut production time in half, what process improvements will be required to reach that state? Can you eliminate steps or streamline a process through automation? Can you analyze data better to save time in the long run?

Industrial robots, augmented reality, IoT technology—implementing these digital technologies can be a daunting process. How do you figure out the right balance between new technology and your traditional processes? How fast do you transition? How much can you afford to spend on new technology? Fortunately, you may not need to stress over these difficult questions. A reputable third-party vendor will likely already understand how to deliver the services and products you need in the most efficient and cost-effective way. For many manufacturers, this approach is the right solution as they grapple with the best way to transition into the new world of digital manufacturing.

Reliable Electronics Manufacturing

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Hippocrates, famous for the Hippocratic Oath, urged doctors “namely to do good or to do no harm.” This admonition—routinely paraphrased as “first do no harm”—is also a good adage for medical device manufacturers to keep in mind, as the practice of medicine relies more than ever on the devices they make. But while most medical device manufacturers are careful to ensure that their products are safe and reliable, they don’t always give medical device packaging the same careful attention.

That oversight can have serious, even fatal, consequences.

7 Common Mistakes in Medical Device Packaging

There are two main purposes for medical device packaging: protecting a product so that it arrives intact and in good working order, and maintaining a sterile environment. Contamination is an especially urgent concern. According to the U.S. National Library of Medicine, viral and bacterial infections are among the ten leading causes of morbidity and mortality in the United States.

One way to prevent contamination—and the subsequent recall—of medical devices is with reliable, high-performance packaging. According to the U.S. Food and Drug Administration (FDA), packaging and labeling issues account for 13% of all medical device recalls, which is why some experts assert that medical device packaging is nearly as important as the device itself.

According to the U.S. Food and Drug Administration (FDA), packaging and labeling issues account for 13% of all medical device recalls, which is why some experts assert that medical device packaging is nearly as important as the device itself.

Now more than ever, healthcare organizations are working hard to reduce the number of hospital-acquired infections. And to help their customers achieve these goals, savvy medical device manufacturers have learned how to avoid the seven most common packaging pitfalls.

Mistake #1: Losing Sterile Integrity

Ensuring the sterility of medical devices is critical for reducing infection, yet it is the most common defect found in medical device packaging. Unfortunately, some medical device manufacturers fail to create a truly sterile barrier system (SBS) in which to encase their products for transport. This means that in some cases, when their products arrive at the point of use, they fail to meet the aseptic standards required by FDA and International Organization for Standardization (ISO) regulations.

While nonsterile packaging can be the result of contamination at the packaging site, often the issue is more fundamental—the design of the packaging itself. It’s important to keep in mind that packaging can only be made sterile on the inside. A package’s exterior will always arrive at its destination in a nonsterile state. This means it’s essential to design packaging that can be opened without introducing contamination.

So, how can you design your package to limit contamination? The National Library of Medicine found that pouches that had outward-curling seals had significantly lower contamination rates. In other words, if the exterior of a package curled away from the interior as the package was opened, it was far less likely that the outside of the package (the nonsterile surface) would come in contact with the interior’s sterile contents.

Mistake #2: Not Accounting for the Device’s Entire Journey

A sterile barrier system is only useful if it stays intact for its entire journey, which is why your package design must include protective material to shield the SBS from the time of assembly to the point of use. Many sterile packages are damaged due to pinholes, slits, cuts, and tears. To avoid these outcomes, wise manufacturers design an entire packaging system that protects the device—and its SBS—throughout the journey from factory to hospital. This means designing resilient packaging that can withstand exposure to road vibration during long hours of transportation. Packaging must also be strong enough to survive warehouse mishaps like a fall to the ground.

Mistake #3: Ignoring Best Practices for Medical Device Packaging

Whether you’re shipping something as simple as a box of bandages or as complex and delicate as a tracheotome, your packaging is critical. Both the United States and Europe have stringent regulations for medical device packaging. Yet not all manufacturers adhere to best practices and regulations when it comes to certain aspects of their product packaging.

Some manufacturers, for example, fail to get their medical device packaging properly validated. It’s true that validation is an extensive and at times complex process. But the regulations serve a purpose. Rigorously testing your proposed packaging will ensure that it provides an effective barrier against microbial ingress, moisture, and environmental contaminants. Furthermore, a good validation process does more than ensure your packaging meets regulatory requirements. It also guarantees that your device gets to your customer in sterile condition, able to perform as advertised right out of the box. This preserves your brand reputation, and eliminates liability headaches as well.

Of course, your efforts to comply with FDA and ISO regulations can be negated if your product is contaminated by a vendor. So, if you’re working with third-party contractors, be sure to screen them carefully to ensure they’re also adhering to best practices for medical device packaging and shipping.

Mistake #4: Using the Wrong Packaging Material

Many medical devices are packaged using thermoform trays—plastic trays that are made by heating plastic sheets and molding them into the desired tray shape. But there is a wide range of plastic available for this purpose, and choosing the wrong one can lead to packaging failure. For example, if you’re packaging a medical device with a lot of mass, you might need a high-impact plastic such as polycarbonate to reduce fracturing during distribution and handling.

The design of the thermoform tray is also critical. The tray or case must be tight enough to hold the medical device firmly in place. Otherwise, a loose product could jettison through the tray lid and fracture the plastic casing from the inside out. Conversely, packaging must have a bit of give, so that it doesn’t damage sensitive sensors or other high-tech components. A good package design strikes the right balance between these two extremes.

Mistake #5: Using the Wrong Container

In addition to using the right packaging material, you need to choose the right size and strength for your exterior shipping box. For example, if you are using an outer carton to protect your sterile pouch, you need to avoid squeezing the pouch into a too-small carton. You should choose a container that avoids any folding, wrinkling, or creasing of the ends of your sterile pouch. Otherwise, the vibrations of a moving truck could lead to pinholes at the junctures of the creases or folds of the pouch. Complex pouch folds are even more problematic, as they form a concentrated point of stress at the juncture of the materials.

When it comes to the sterile pouches themselves, however, bigger isn’t always better. Some research has found that increased contamination rates are associated with larger pouches versus smaller ones. Unfortunately, the reason for this is not entirely clear. One theory is that larger pouches require more hands-on repositioning to open, and that this increased handling offers more opportunities for contamination.

Mistake #6: Inadequate Testing

Just as it’s important to test and inspect your product, you need to test the effectiveness of your packaging material—and package design—to ensure that the SBS and the outer carton will protect the device as it travels from assembly to customer to storage.

Testing might reveal, for example, that a single sterile barrier is not sufficient to maintain a sterile environment for a product that might sit in a hospital storeroom for up to a year; instead, a double barrier is needed. Real-time aging testing like this will enable you to see how your medical device packaging holds up under storage conditions in which both temperature and humidity can fluctuate widely, especially over an extended period of time.

But what if you’re trying to beat a competitor to market? Or more importantly, get a life-saving medical device to patients as quickly as possible? That’s where testing via accelerated aging—elevating temperatures to artificially speed up the aging process—can be useful. For example, subjecting a sterile barrier system to 40 days of +55°C temperatures has roughly the same effect as storing the SBS at +23°C for a year. That’s a huge time savings.

There is a caveat, however. Using temperatures that are too high—in the hopes of cutting a few more days off the testing process—can cause a package to melt or warp in a way it never would under real-world conditions, negating the purpose of the test. So, exercise caution when applying accelerated aging techniques. Or work with a laboratory that specializes in testing via accelerated aging.

Mistake #7: Neglecting to Develop a Recall Protocol

In addition to protocols for testing, manufacturers should develop specific protocols in case the need for a recall arises. Such a protocol might involve plans for recall initiation, reporting, execution, and monitoring. Recall protocols are especially important right now, as medical device recalls are on the rise. Between 2012 and 2022, recalls increased by 125%. (And medical device adverse event reports increased by over 500%.)

Having protocols in place means you’ll be better prepared to initiate a voluntary recall, which will do less damage to your business reputation than a forced recall. That was the case for medical manufacturer Nurse Assist, LLC. In November 2023, the company issued a voluntary recall on its saline and other water-based products over concerns of compromised sterility. These included various bottles, spray cans, cups, and syringes. When the recall was initially released in November 2023, no adverse effects had been reported. And while the FDA has since received reports of adverse events, Nurse Assist’s prompt, voluntary action has enabled the company to mute the damage to its brand.

Diligence is Needed in Medical Device Packaging

As healthcare providers continue to prioritize infection reduction, and medical device recalls continue to rise, designing and deploying effective medical device packaging is more important than ever. Avoiding the seven pitfalls outlined here is the first step in making sure that your packaging performs in a way that increases patient safety—and enhances your company’s reputation.

A Packaging Partner You Can Rely On

Are you looking for a medical device manufacturing and logistics partner you can count on? At PRIDE Industries, our trained engineers can customize a turnkey manufacturing solution for your unique product. And our specialized knowledge doesn’t stop there. We’re also experts in medical device packaging, warehousing, and shipping. Discover what PRIDE Industries can do for you.

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It’s no secret that artificial intelligence (AI) and machine learning are infiltrating the way we do business—as well as our personal lives—in multiple ways. Uber uses AI to forecast the number of ride requests for different locations. Social media platforms customize user content by applying AI algorithms. And manufacturers across a variety of industries are using AI to take predictive maintenance to a new level, analyzing historical and real time data to anticipate failures and repair or replace machinery before something breaks. So it’s no surprise that electronics manufacturers have found yet another use for AI: optimizing electronics packaging.

The global market for AI-facilitated packaging is expected to grow at a compound annual growth rate (CAGR) of 55.2 percent from 2021 to 2026, according to Global Market Estimates, a market research and consulting company. This rapid increase in the use of AI to optimize packaging is no surprise, as improved packaging offers many benefits, from better product protection to improved brand positioning.

Because electronic devices tend to be fragile and prone to damage during transit, AI can be especially useful in optimizing their packaging.

Important Considerations in Electronics Packaging

Because electronic devices tend to be fragile and prone to damage during transit, packaging must be optimized for specific products. So how does an electronics manufacturer choose the best packaging? Opting for the cheapest solution doesn’t always save money in the long run. Manufacturers have many factors to balance and questions to consider, including:

How well will the packaging protect the product?
Does stronger packaging justify a heavier weight and higher shipping costs?
Is there an acceptable level of returns for damaged products? If so, what is it?
What is the optimal balance between packaging price and performance?

In addition to the questions above, manufacturers need to think about customer perceptions, as people are becoming more concerned about packaging pollution. In a 2020 survey, McKinsey & Company found that 60 to 70 percent of consumers said they would pay more for sustainable packaging. AI can be used to analyze vast stores of internal and public data to optimize packaging so that it meets electronics manufacturers’ requirements for quality, safety, and sustainability, allowing them to quickly find the right balance between cost and effectiveness.

3 Ways AI is Improving Electronics Packaging

Successful electronics manufacturers are constantly evaluating new technologies and seeking ways to improve production. Across the nation, these savvy manufacturers are leveraging AI and machine learning to optimize their product packaging in three critical areas.

Design

AI can help companies optimize electronics packaging by analyzing data such as product type, weight, and fragility. It can also factor in other considerations such as company sustainability goals and shipping distance. AI can even be used to incorporate packaging considerations into the product design phase, helping engineers configure a product that costs less to ship and is more resilient in transit, resulting in fewer returns.

AI algorithms are now being used to customize packaging for a broad range of products. A TV, for example, may require a box with thicker corners for better edge protection. Other electronics packaging considerations include protection from falls, extreme temperature, vibration, humidity, sunlight, contamination, and water. To minimize vibration, containers sometimes include internal locking mechanisms. And to make product inspection easier, clear locking containers—such as those manufactured by U.S.-based Clamtainer—allow final inspection of a component without disturbing the packaging.

AI can also be used to determine the ideal packaging material for a particular product. This is especially important given the range of new materials available, which are far more diverse than traditional cardboard and polystyrene packing peanuts. Mushroom packaging, for example, is made from an organic material that’s literally grown to a precisely programmed shape using a process that takes just seven days. Other novel materials include bamboo, cornstarch, and seaweed—sustainable substances that win kudos from the general public, enhance a manufacturer’s reputation among consumers, and can even cost less than traditional packaging.

Another way that AI is impacting package design is by using 3D prototypes to speed up the time it takes to determine the optimal packaging for any given product. In the same way that 3D prototyping is used to test product designs, packaging options for the finished product can be tested and quickly modified using AI models and 3D printing technology—without the expense or time of producing the actual electronics packaging.

Sustainability

Optimizing a product’s packaging should be part of any initial product design, especially if sustainability is important to your company—the European Commission estimates that more than 80 percent of all product-related environmental impacts are determined during the design phase. However, leveraging AI for sustainability goes beyond design. It can also help reduce waste, decrease shipment damage, and lower shipping costs. Amazon has been using an AI model that learns from real-world customer complaint data to accomplish these goals. Applying their machine learning model to hundreds of thousands of packages, they have been able to reduce waste, cut shipment damage by 24 percent, and reduce shipping costs by five percent.

AI can also help manufacturers design packaging with recycling in mind. This not only helps companies meet their environmental, social, and governance (ESG) objectives, it’s also becoming an essential objective now that more and more local governments are enacting extended producer responsibility (EPR) regulations. For example, California passed a law in 2022 that imposes new regulations and fees on manufacturers of single-use plastic packaging. Other states—including Maine, Oregon, and Colorado—have also passed strict EPR laws. And while many of these regulations primarily affect the makers of plastic forks, straws, and bags, they are expanding to include packaging for all kinds of products.

Supply Chain Management

AI can also help in supply chain management, from production inspection to shipping improvements, enhancing or even replacing human efforts. Unlike a person, AI never gets bored or distracted—it doesn’t miss product defects. And unlike human brains, which have a tendency to fill in missing data and thus see things that aren’t there, an AI “brain” lacks this imagination, and so more accurately detects a product’s true state.

AI can even improve on the traditional “machine vision” technologies that are used for inspections. Many current visual inspection technologies are capable of spotting variations from a programmed standard, but can’t determine if the variation is acceptable. For example, in the case of date labeling on a package, if a date is in a different font, many current inspection systems will reject it as an error. Harry Norman, founder of OAL, a British automation and robotics company, likens traditional machine vision to having vision without a brain. Incorporating AI into the system gives the machine a “brain,” one that can be trained to account for variation. For example, a date stamp with a tilted “2” that would have been rejected in the past with traditional visual inspection technology can now be recognized as acceptable.

Yet another way AI is strengthening the supply chain is by streamlining the shipping process. Manufacturers now have access to data-driven shipping automation platforms that include packing algorithms. According to ShipHawk, a U.S.-based provider of automated shipping solutions, companies can lower shipping-related costs by more than 20 percent with data-driven shipping. Machine learning algorithms can also be used to assign packages unique RFID tags so that products can be easily tracked throughout the entire supply chain.

Don’t Set It and Forget It

Keep in mind that AI is only as good as those who design, program, and monitor the technology. So be cautious about taking a hands-off approach. But with the right oversight, AI can transform electronics packaging. The technology’s ability to improve design, enable the use of novel materials, and make recycling easier means that manufacturers will undoubtedly continue to use AI to optimize their product packaging for years to come.

Kitting and Fulfillment Services with a Positive Social Impact

PRIDE Industries offers comprehensive packaging and fulfillment services that incorporate sustainability practices tailored to each customer’s needs. Our flexible approach, backed by a dependable and inclusive workforce, gives our customers both reliable service and a unique social marketing advantage.

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The leading magazine in the packaging and fulfillment industry writes about how companies like Achusnet Golf (think Titleist and FootJoy brands) and Veritiv find skilled, high-retention labor force with employees with disabilities.

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Brewery Solves Labor Shortage with Employees with Disabilities

Jerry Moore acquired Knee Deep Brewing Company in 2010, initially using a contract brewing facility in South Lake Tahoe to make beer and ship kegs to bars and restaurants just over the Nevada border in Reno. Fast-forward to 2013, when operations moved to its current home, a 37,000 square-foot, 40 BBL brewhouse with multiple 120 BBL fermenters. Unfortunately, labor shortages have been a persistent challenge.

The Challenge: A Reliable Workforce

“We had trouble finding reliable, hardworking employees to do the work.”

Like many front-line roles in the wake of the Great Resignation, the labor shortage faced by the brewering was real, and turnover was high and disruptive.

Moore came up with a novel solution. Just down the road from the Auburn, Calif., brewery was a job development center run by PRIDE Industries, training people with disabilities for real-world jobs. Moore reached out and a crew from the social enterprise started in 2020. It’s been a win-win relationship ever since.

“The first thing that surprised me was how happy they were to be here,” Moore said. “They show up on time, work hard, are a lot of fun, and have turned out to be a perfect fit.”

The Solution: Workers with Disabilities a Perfect Fit

Such a great fit that when Knee Deep launched its first special brew to call attention to Autism Awareness Month in April 2022, they named the beer Perfect Fit, complete with a PRIDE Industries logo on the cans to call attention to autism and promote the inclusion of people with disabilities in the workforce. The brewery made 10 barrels and sold out in a few weeks.

“It was an English-style IPA which people liked,” said Brewmaster Dean Roberts, “but I think people also liked the cause of autism awareness, and it gave them a reason to choose that beer.”

The PRIDE Industries team named the 2023 version of the April brew—Hoppy Roger—with a pirate-themed label that included caricatures of employees Aaron, Thomas, Zach, and Evan crewing the ship with a Knee Deep logo replacing the skull in the traditional Jolly Roger flag. This time the company made 30 barrels to satisfy demand.

Knee Deep donates a portion of proceeds to The Michael Ziegler PRIDE Industries Foundation, which provides programs to help people with disabilities, veterans, and foster youth—like the team working at the brewery–become job-ready.

“Awareness is great, but we want to do more,” Moore said. “We see the power of acceptance and inclusion and want to spread to the news.”

The Result: Contagious Enthusiasm

Should other breweries consider hiring people with autism or other disabilities? Yes, but not just brewers. “It’s not that different from hiring anyone else,” Moore said. “It’s finding the right person for the right job. This job happens to work for these individuals, and they love it.”

Take crew member Zach, for example. Ask him if he likes his job, and he answers immediately: “I love it.”

“They’re happy to be here, and that’s contagious,” said Roberts. “We’re all one team, and everyone enjoys working together. You don’t even think about the disability part anymore.”

It helps that a PRIDE Industries job coach is on hand to make sure everything runs smoothly.

“I love working with this team,” said coach Aaron Cartwright-Vasquez. “They’re great workers—I have to make sure they have what they need and take their breaks.” Cartwright-Vasquez provides transportation for those who need it and ensures everyone understands their schedules, which can vary weekly. “They’re waiting for me every morning wearing smiles.”

Untapped Labor Source

“Knee Deep Brewing has always been proud to have the best people working for it,” Moore likes to say. “Without them, we would not be where we are today. With great people comes great beer!”

More than 15 million people of working age in the U.S. identify as having a disability, an Accenture study found. The study found that companies that actively recruit and manage employees with disabilities have 28 percent higher revenue, twice the net income, and 30 percent higher profit margins. “Persons with disabilities have to be creative to adapt to the world around them,” the study said. “As such, they develop strengths such as problem-solving skills, agility, persistence, forethought, and a willingness to experiment—all of which are essential for innovation.”

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Packaging and fulfillment

“The first thing that surprised me was how happy they were to be here. They show up on time, work hard, are a lot of fun, and have turned out to be a perfect fit.”

— Knee Deep Brewing Company Owner Jerry Jones

The concept of extended producer responsibility (EPR) is as simple as it is demanding. EPR adherents call for product manufacturers to shoulder responsibility for all the environmental costs associated with the entire lifecycle of the products they make—from sourcing raw materials to final disposal of the product. The concept of EPR was first introduced in Sweden in 1990, by Professor Thomas Lindhqvist, in a report that emphasized the responsibility of businesses to manage “the take-back, recycling, and final disposal” of the goods they produce.

It’s no surprise that in the intervening decades, the concept has grown in popularity. According to the Environmental Protection Agency, more than 14.5 million tons of plastic packaging was created in 2018. Of that plastic packaging, nearly 70% ended up in a landfill, where it will take 400 to 500 years to degrade. And packaging is just one facet of a product’s environmental impact, because the creation and disposal of the product itself creates a trail of waste that is harmful to the planet.

For a long time, both consumers and producers were able to ignore this fact, but with landfills filling up with electronic and other waste, the public—and the officials they elect—have taken notice. And both groups are putting pressure on businesses to develop EPR strategies.

Shifting Environmental Costs Upstream

The current model of “reduce, reuse, recycle” is a well-established approach to plastic pollution. EPR extends this approach considerably, shifting the environmental costs of a product upstream to the manufacturer and away from the public sector.

Up until now, Americans have focused primarily on downstream solutions to plastic waste—including waste collection, pre-treatment, and sorting. But “reduce, reuse, and recycle” has severe limitations. Voluntary recycling programs, for example, are notoriously ineffective.

According to research by the environmental group Beyond Plastics, in 2021 less than 6% of recyclable plastic was actually recycled. This means that 34 million tons of plastic went to landfills. Another four million tons were incinerated, releasing a considerable amount of air pollution, despite the scrubbers, precipitators, and filters found in today’s waste-to-energy plants. In 2016, for example, the incineration of plastic in the U.S. released 6 million tons of carbon dioxide into the environment.

Downstream solutions have another major problem: Local governments complain that this approach leaves them responsible for waste created by businesses that aren’t even based in their jurisdiction. Put simply, cities and states, and their residents, are tired of bearing the disposal costs of many consumer products, especially those with a high percentage of plastic. It’s this attitude that has led to the growing popularity of extended producer responsibility.

Global EPR Trends

As with so many manufacturing trends, this one is impacting every country a little differently.

Europe is on the forefront of EPR innovation. In member countries of the European Union (EU), producers are responsible for financing the collection, recycling, and end-of-life disposal of consumer products like batteries, tires, oil, paper, vehicles, and even construction and demolition waste. The EU is also encouraging businesses to take responsibility for the disposal of plastics, medicines and medical waste, chemicals, pesticides, lamps, and light bulbs.

The EU is tackling waste on the front end as well. In 2021, the organization banned the sale of many common one-use plastics, including plastic cutlery, straws, plates, and bottle caps. Styrofoam food and beverage containers are also out. This affects not only European producers, but any business that exports to Europe. Some companies are now faced with redesigning packaging specifically for the European market.

Canada, too, is implementing a variety of EPR-inspired policies. Like the EU, it’s banning both the production and import of many single-use plastics. This includes checkout bags, straws and stir sticks, and takeout containers. The focus right now is on food-related single-use plastics, but exporters shouldn’t be complacent. Plastic products—and plastic packaging—are also being looked at for possible regulation. According to Plastics Recycling Update, there’s talk of prohibiting manufacturers from making recycling claims on any product unless “at least 80% of Canadians have access to systems that accept the products and provide reliable end markets for them.”

Made in America: Extended Producer Responsibility in the U.S.

In the U.S., extended producer responsibility is handled less uniformly than in other countries. There is no federal legislation regulating EPR, but some states have been busy. In 2021 alone, more than 30 bills mandating extended producer responsibility were introduced at the state level, and EPR laws are already in place in several states.

California recently passed some of the most sweeping EPR legislation in the country. Senate Bill 54, signed into law on June 30, 2022, imposes new fees and regulations on manufacturers of single-use plastic packaging and single-use service ware. And the new law doesn’t just affect manufacturers. It also applies to the owner or licensee of the brand or trademark under which the product is sold in California. This all-encompassing definition means that if you sell any of these regulated products in California, you have to put an EPR program in place that meets the new state requirements.

The situation in California is not unique. Maine, Oregon, and Colorado have all passed stringent EPR laws, and the trend is growing. So far in 2022, 40 EPR-related bills have been proposed in 19 states, from New York to Hawaii. There are even two bills addressing producer responsibility under consideration at the federal level.

Corporate Stewardship: Complying with Extended Producer Responsibility Regulations

The EPR trend is gaining momentum. If your business hasn’t been impacted by producer responsibility laws yet, it will be soon. What does that mean?

Most likely, your company will be paying more to sell products in states with EPR laws, as the whole point of EPR is to compel manufacturers to share the financial costs of product recycling and disposal. In California, for example, the recently enacted single-use plastics law requires members of the plastics industry to contribute $5 billion over 10 years.

Fee structures will vary from state to state, but all states with EPR laws require some kind of payment. Most states also encourage (or even require) manufacturers to join a producer responsibility organization (PRO). The PRO is an entity that develops and runs a producer stewardship plan. PROs are required to be nonprofit organizations.

The advantage of joining a PRO is that it lets companies rely on a third party to manage the fiscal compliance relating to EPR. Most PROs also provide support with registration and reporting requirements and serve as a de facto voice for member businesses. So, while the state where you do business may not require your company to join a PRO, it may still be to your advantage to do so.

A Tool for Creating the Circular Economy?

Some business leaders have argued that PROs and other EPR requirements are in essence a stealth tax. But states and local governments have a ready response to that accusation: Make your products more sustainably, make them easier to reuse and less toxic to recycle, and then everyone’s costs will go down. In this way, government officials are pushing companies to deliver on their promises of a circular economy.

But whether a company’s leadership sees EPR as a tax or simply the cost of doing business, the phenomenon can’t be avoided. More than 30 states now have at least one EPR law on the books, and many have several. This is why now more than ever, designing products with sustainability in mind is essential to the bottom line.

Manufacturing Services for the Circular Economy

Are you looking for a manufacturing partner that can help you eliminate waste and pollution in your product’s lifecycle? At PRIDE Industries, our engineers are experts in streamlining product design for more sustainable manufacturing and end-of-life disposal. And our partner network of certified recyclers maximizes the recovery of useful material and ensures proper waste disposal.

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