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Packaging though an integral part of logistics also affects marketing and production function. Packaging helps in promoting the goods and informing the customer. As production employees often package the goods, the size, shape and the material of the package greatly affects production’s labor efficiency. Packaging greatly influences the entire logistics system. The size, shape and type of packaging material influence the type and amount of material handling equipment as well as how goods are to be stored in the warehouse. Likewise, package size and shape affect transportation in loading, unloading, and transporting a product. Material handling efficiency is strongly influenced by packaging.
The functions of Packaging are as follows: Protection: It helps in the protection of materials and goods in the logistics process. This protection is from damage, theft, contamination and environment. It is generally not economical to provide absolute protection to the product from all possibilities. Hence a balance should be maintained between cost of packaging and providing adequate. protection. High cost and delicate goods require a high amount of packaging to avoid spoilage of goods. Therefore we normally see that the packaging in consumer durables such as television, computers are much higher as compared to packaging in soaps.
Communication: Packaging, enables product identification and tracking, and displays product care information. With newer technologies coming in such as bar code scanners has helped in improving capabilities in product identification and tracking. Product identification and tracking helps in receiving, order picking and to improve the overall efficiency of the logistics process. Sale: Packaging also helps in improving the appeal of the product to the customer thus resulting in higher sales. 
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