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By James Goldman CPP, EAS Independent Consultant

“It’s the packaging supplier’s fault!”

Package quality disputes between suppliers and customers often start with someone in the filling plant stating “these packages aren’t as good as the ones we ran last week” without any data to support their suspicion. Data, not feelings, must be the basis of any package quality discussions with their supplier.

Too often packaging users, both large and small, become embroiled in disputes with their packaging supplier over the package quality. Most typically, the root cause of the dispute is either the plant personnel were not aware of the simple resolution procedure included in the Supply Agreement, or the supplier’s written Supply Agreement omitted meaningful Acceptable Quality Limits (AQL’s) resulting in a product that the customer unable to use.

All high-volume manufacturing processes, including package manufacturing, will from time to time generate defective products through process improvement projects continuously aim to reduce the frequency. New technologies can help to reduce the number of defects produced, and quality assurance programs at manufacturing plants can identify and reject defective parts.

The starting point of all quality assurance programs is to:

  • Identify all defects that are possible for the product being manufactured.
  • Understand the consequences of each defect.
  • Classify the defect according to type and how many can be tolerated in the market.
  • Identify how to detect the defect and the practical limits of detection.
  • Create the appropriate testing and inspection plan.

It is critical for Supply Agreements between the package supplier and the end-user to completely define the quality requirements.  The ANSI / ASQC (American Society for Quality Control) Standard defines AQL as “the maximum percent of non-conforming ware that, for the purposes of sampling inspection, can be considered satisfactory as a process average”.  In common with these quality specifications is the industry practice to define “Acceptable Quality Limits” or AQL’s for defects. Quality classifications of “Critical,” “Major,” or “Minor” are determined based on possible results should the filled package be distributed to consumers.  The defect classifications are defined as follows:

Critical Defects could result in a health or safety hazard to the consumer, and therefore have no acceptable level or 0% Acceptable Quality Level (AQL) since every defect is a consumer hazard. Examples of a critical defect include things like shards of plastic packaging mixing with the container’s contents. Before any product is commercially manufactured, safeguards must be in place to prevent Critical Defects from being shipped.

Major Defects could possibly result in failure, line disruption, or affect customer acceptance.  In relatively low numbers, major defects do not pose a significant threat to consumers. Because of this, major defects are defined differently depending on the type of package and it’s contents. The threshold for a package intended for eye shadow may be different than that of a personal care product. The cost of preventing these defects must be balanced against the downstream cost to the supply chain if the defects leave the point of manufacturing. Lowering the AQL for any defect increases the overall cost of manufacturing and therefore the sales price to the customer, however increasing the AQL may increase the total cost to the customer due to losses they incur.

Minor Defects are generally any aesthetic or appearance condition not likely to result in failure or to reduce the serviceability of the product. Minor Defects do not affect the downstream supply chain cost.  Like Major Defects, lowering the AQL for Minor Defects increases the overall cost of manufacturing and therefore the sales price to the customer.  Therefore, the AQL for Minor Defects is influenced by the brand owner’s marketing department and what their customer will accept or detect.

How is all of this ironed out? Though effective and thorough Supply Agreements. In addition to defining the defect classifications, these agreements must include how the classification determinations will be made, logged and verified. It should include language on properly calibrated testing equipment and how any defects will be dealt with.

Globally, the packaging industry and their customers often use the Military Standard 105E (Mil-Std 105E) to define the sampling procedures and tables to determine the appropriate inspection sample size based on the lot size when considering whether a lot of bottles meets an AQL.  Under the Mil‑Std 105E Accept/Reject method, the required inspection sample size is defined and the accept/reject levels are quantified.  If the number of defects found in the random sample is equal to or less than the “Accept” limit, then the Lot is Accepted; if equal to or greater than the “Reject” limit, then the lot is sent back to the supplier.   Defects including package measurements or line performance should be clearly defined by the Supply Agreement, so the quantitative results obtained by the inspection are definitive and binding to all parties.

Packaging disputes can be avoided with careful discussions and decisions made in conjunction with suppliers. However, the key to resolving disputes is in the details of a written Supply Agreement and knowledgeable reaction in the filling plant. Make sure your program includes:

  • Assurances that appropriate AQL’s are identified for every package dimension and potential defect.
  • AQL specifications and the inspection process.
  • Properly educated plant personnel in both the Mil-Std 105E procedures and the applicable AQL’s.
  • Implementation of the inspection process as soon as anyone suspects a problem.

Do you need help designing a Packaging Supplier Agreement? Would you like a third-party or due diligence audit of your packaging manufacturing facility? Can your efficiency be improved? EAS Consulting Group packaging experts are here to help. Contact us to discuss your regulatory challenges.

Posted in Foods, Issue of the Month.