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4 Simple Ways Contract Packaging Can Help Improve Your Supply Chain

How does packaging affect the supply chain and why is contract packaging important?

The Contract packaging is when a company outsources its packaging production to another business. This includes designing, printing, component production, assembling, and finishing the product in the final packaging.

Finding a contract packager with the right capabilities for your program takes research and vetting. Ask for a minimum of three to four contract packages for bids.

Increased Efficiency

Getting products out the door and to retail shelves quickly is the goal for any manufacturer. Contract packaging companies are dedicated to that process and can handle a higher volume in a shorter period than an in-house operation.

In addition, contract packagers can offer warehousing services that help reduce shipping costs by keeping inventory at the company’s facility. This allows for a faster order turnaround and frees up space at the manufacturing plant for other operations.

Contract packaging is often the best option for smaller manufacturers who need their production capabilities. It can also be useful for larger companies looking to expand into a new market or introduce a new product line. This eliminates the cost of in-house acquiring and maintaining a packaging machine, labor, facility space, and transportation costs.

Lower Costs

Running a packaging line and supply chain can be expensive. Packaging machinery, labor costs, materials, and logistics can run up a $150,000 – $300,000 bill. Businesses with insufficient continual product volumes to justify the investment or need one-time packaging runs are a good fit for contract packagers.

Co-packers have staff, production facilities, machines, and equipment in place, so your business can skip paying to build, maintain and operate this equipment or bear the warehousing costs associated with storing your packaging. These cost savings can be channeled to other business areas to improve production and market your product more effectively.

Contract packagers are often professional package designers and manufacturers themselves. This allows them to use the latest methods and materials that may reduce your costs while maintaining quality and integrity.

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Increased Flexibility

Many contract packagers have a wide range of packaging methods that can be used to meet different business needs. Choosing the right strategy is key, as it can significantly influence the project’s overall cost.

The type of packaging materials required is another important factor in the overall price of the package. For example, a flow wrap may require lower material costs than a clamshell or thermoformed pack.

Depending on the business, contract packagers can either ship the packaging “Knocked Down Flat” (KDF) back to the hiring company or assemble and ship it directly to retailers and other customers. This option allows the contract packager to control how the product will look upon arrival and can help to increase brand awareness. Time savings are also significant in this scenario.

Increased Productivity

When a business hires a contract packager, they can focus on designing, producing, and selling their products. They no longer have to worry about packaging and the associated supply chain logistics.

Contract packaging companies typically have staff, production facilities, and machinery that can quickly handle large product volumes. This saves a business the cost of purchasing and maintaining packaging machines and frees time for other tasks.

Contract packagers can also help print and prepare components like manuals and inserts. Additionally, they can produce plastic / thermoform packaging such as clamshells and blister packs or transport trays. They can even assemble and ship complete point-of-sale displays to reduce freight costs. This can significantly shorten your supply chain’s time-to-market.

contract packaging can help improve your supply chain
Contract Packaging Improves Your Supply Chain

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