Why Do Consumer Packaged Goods Companies Outsource?
In today's competitive and cost conscious packaging environment, consumer packaged goods (CPG) companies are feeling intense pressure to be able to complete their projects on a strict schedule, with impeccable quality assurance, at a competitive cost.
They must have short campaign start-up times, certified production facilities and trained personnel, as well as the right equipment and raw materials, to complete projects on time and on budget.
They must be flexible and able to respond to (sometimes) unreasonable internal or external demands, like rapid campaign launch times or extensive raw ingredient requirements.
Many turn to contract manufacturers for help.
Why Companies Use Contract Packaging Companies: Companies report many reasons why they use contract packagers to support their manufacturing efforts.
They may want to test market a product without committing company resources to it.
They may have competing priorities for their cash, and choose not to invest in necessary equipment.
If they lack the geographical footprint necessary for a specific product's distribution, acquiring the added assistance is a beneficial option.
Some companies may have a lucrative opportunity to package a specific product, but lack the required experience needed to successfully complete the project.
They may not have the proper environmental or food standard certifications, or perhaps they may have seasonal demand for their products, but not need to have a full-time, year-round production facilities.
The list goes on and on.
What to Look for in a Packaging Partner: When looking for a packaging partner, companies are looking for companies that can offer expert, cost-efficient, practical solutions that will initiate, organize, streamline or improve their core packaging operations.
In general, outsourcing helps with supply chain management and keeps consumer packaged goods companies lean.
The need to stay lean or become lean has been magnified over the last few years during the economic downturn, as manufacturers were hit hard.
To fight a difficult economic landscape and retain sales it is critical for manufacturers to find balance.
They must maintain product quality and focus on servicing their customers through timeliness and flexibility.
This includes crucial factors such as speed to market, timeliness of delivery, and the capability for tight turn around times.
They must also while carefully monitoring investment and costs (such as labor, transportation, and materials).
The best contract manufacturers help solve for all of these issues.
Manufacturers who use them agree as evidenced by the finding that 54 percent of them reported that they expected their use of outsourcing will "stay about the same" over the next 12 to 18 months.
They must have short campaign start-up times, certified production facilities and trained personnel, as well as the right equipment and raw materials, to complete projects on time and on budget.
They must be flexible and able to respond to (sometimes) unreasonable internal or external demands, like rapid campaign launch times or extensive raw ingredient requirements.
Many turn to contract manufacturers for help.
Why Companies Use Contract Packaging Companies: Companies report many reasons why they use contract packagers to support their manufacturing efforts.
They may want to test market a product without committing company resources to it.
They may have competing priorities for their cash, and choose not to invest in necessary equipment.
If they lack the geographical footprint necessary for a specific product's distribution, acquiring the added assistance is a beneficial option.
Some companies may have a lucrative opportunity to package a specific product, but lack the required experience needed to successfully complete the project.
They may not have the proper environmental or food standard certifications, or perhaps they may have seasonal demand for their products, but not need to have a full-time, year-round production facilities.
The list goes on and on.
What to Look for in a Packaging Partner: When looking for a packaging partner, companies are looking for companies that can offer expert, cost-efficient, practical solutions that will initiate, organize, streamline or improve their core packaging operations.
In general, outsourcing helps with supply chain management and keeps consumer packaged goods companies lean.
The need to stay lean or become lean has been magnified over the last few years during the economic downturn, as manufacturers were hit hard.
To fight a difficult economic landscape and retain sales it is critical for manufacturers to find balance.
They must maintain product quality and focus on servicing their customers through timeliness and flexibility.
This includes crucial factors such as speed to market, timeliness of delivery, and the capability for tight turn around times.
They must also while carefully monitoring investment and costs (such as labor, transportation, and materials).
The best contract manufacturers help solve for all of these issues.
Manufacturers who use them agree as evidenced by the finding that 54 percent of them reported that they expected their use of outsourcing will "stay about the same" over the next 12 to 18 months.
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