The Logistical Lowdown

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How Contract Packagers Improve Focus on Core Operations

Posted by Adam Bates on 7/12/17 11:00 AM
Adam Bates
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Shrink wrapped carton of orange drink bottles on packaging line in a warehouse

In today’s competitive market, businesses everywhere are taking a closer look at their operations to try to minimize costs. One method companies are using is to outsource one or more of their processes to other companies so they can focus on optimizing their core operations. For instance, a consumer goods manufacturer might outsource the packaging of their product to a contract packager.

A contract packager is a company that specializes in handling the packaging needs of a product manufacturer. Some of these companies use high-speed machinery while others rely on large workforces to tackle their client’s demands. A contract packager performs services such as shrink-wrapping, blister packaging, and repackaging. In some cases a contract packager can double as a logistics partner who aids in assuring the finished product reaches the end consumer. 

 There are many situations where a company would benefit from using a contract packager.

For instance:

  • If there is an opportunity for the in-house machinery to be used for another purpose.
  • If a project moves into unfamiliar territory or an area where a company has little experience.
  • Test runs are required for a new product.
  • The current in-house machinery is unable to keep up with demand.
  • A company’s workforce is unable to keep up with demand.
  • A new project requires machinery a company doesn’t currently have.
  • New regulations or environmental requirements compliance would require a large investment.
  • A lack of labor availability requires a company to consider alternative options.
  • A business is entering a new market where their current product packaging needs reworked.
  • Current assets will be down for maintenance or other planned downtime.
  • Seasonal items can be handled as needed.

In each case, a company would benefit from outsourcing their packaging operation to a contract packager. Outsourcing in these instances can expand production capacity without the added cost of investing in more machinery or hiring additional personnel. This is especially true for companies whose demand fluctuates regularly. This allows a company to expand their options and increase their flexibility. 

Not only this, but contract packagers can assist where there are large variations in packaging format. A company who manufactures multiple products probably needs multiple forms of packaging for those products. They may also serve multiple clients who request different specifications for the final package. Being aligned with someone who specializes in a variety of packaging services enables a company to meet specific customer demands without having to take focus away from their core competencies. A contract packager is set up to handle many packaging operations at once, ensuring a shorter lead-time to market.

It is also important to consider that a contract packager who is more centralized can play an important role in optimizing distribution networks, reducing transportation costs, and further reducing lead time.

Considering the opportunities, it could be in your company's best interest to have a contract packager wrapped around your finger in order to maximize production capacity, utilize multiple forms of packaging, and minimize costs.

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Topics: Co-Packing

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