Choosing a contract packaging company

June 27, 2014

Many manufacturers have taken to outsourcing their packaging tasks these days, as they find it more cost effective, and it takes away the headache of dealing with all the issues associated with different designs, packaging solutions and planning. So how do you know when to start looking for a packaging solution outside of your own warehouse?

There are many “red flags” that should warn you that you really need to start looking to outsource, and just a few of them are mentioned below.

Why you may need a contract packaging company

  • Your manufacturing lines are struggling to cope with your packaging demands. This can happen often, intermittently, or gradually, and can have a marked effect on your production so you should keep an eye on the situation, and if you feel that your staff are not coping, you should try to look for a solution outside of your building.
  • You have a new short term need for packaging that you would prefer not to use your in-house staff for, as it would take people away from your longstanding packaging needs.
  • You have a short packaging run for a new, test or seasonal product. Utilising your current packaging equipment wouldn’t work, so you would have to invest in new.
  • Your promotional packaging or inserts (intended to market your company) require non-standard packaging and are quite labour intensive.
  • Environmental or regulatory requirements dictate that your company complies with sometimes-expensive investments, which you are not prepared to undertake in house.
  • Your in house staff cannot cope with a heavy workload, and you require help to ensure that you get through this particularly busy period.
  • Your product is sold overseas, so can be shipped to the destination in bulk, and then each unit can be packed locally. This will save transportation costs.
  • You have the need for a packaging form that your current staff or machines are not equipped to handle.
  • You have a chronic shortage of staff
  • Your machinery needs maintenance, and needs to be shut down for some time.
  • You want to downsize.

Of course when you are considering outsourcing your contract packing solutions, you need to draw up a clear plan of action. Make sure to go through in detail what you’ll want to achieve, and remember to ask everyone on your current productions line (if you have one) for any opinions/issues they might have so you have covered all basics. Once you’ve done this you can then give a full brief to your prospective contract packaging services supplier and they can tell you whether or not they’ll be able to fulfill your needs.

How to choose a contract packaging service provider

It’s important to remember when looking to outsource your contract packaging services, that you’ll need a contract packing company that matches your ambition. You should certainly consider some or all of the following criteria when choosing your packaging partner.

Where are they based?

 If you’re nowhere near your contract packing company, then you’re going to struggle in an emergency situation to get a result if such an emergency should arise. Having a contract packaging company close by to your manufacturing and distribution partners, or facilities can make a real difference when it comes to saving time, and can also ensure your freight costs are lowered. Of course, if your business is located in an area with high overheads, such as property prices, this cost may be offset. Take a careful look at prices vs. location and decide which is more important to you.

How long have they been trading?

Whilst it wouldn’t be fair to say that a business in it’s first year of trading cannot offer you something you need, many businesses prefer to go with a contract packaging services company with a good long-standing reputation in their field and if they offer a wider range of products and services because of this, then you may end up getting everything, and more covered. They may even be able to offer you advice and products you have not yet considered which could be of further benefit to your company.

How much will it cost?

Sift through the quotes you get and work out what’s included and what’s not. Different companies offer different services so quotes will vary greatly. Its important to remember that the cheapest quote will not necessarily be the best, so work out what you’ll be receiving for your money and weigh up the value of any extra’s you may have been offered. It’s also important to read the fine print on any quotations.  If you don’t you could well be in for a nasty shock along the way.

How good is the communication

However good the solutions are, the thing that really matters is how well you can communicate with your co-pack company, and how well they communicate back. You should have contacts you can speak to on a regular basis, regular reviews and the opportunity to ask questions at every step. You’ll also need to ensure there is a hierarchy in place for any complaints or issues as they arise, in order to make sure that you’re able to make changes quickly if needed.

 How big is the company?

 Are they large enough to cope with the demands of any expansion? Every business owner wants to think that their business will expand, and if there are grand plans further down the line, you need to know that the company you’re dealing with, will be able to cope with that growth and even grow alongside you. On the other hand, you want to be important to your contract packing company. As a small fish in a large pond, you may not get the level of service you would with a larger company. This is entirely up to you to get a feel by asking the right questions to prospective contract packaging partners.

Do they have references?

A company you want to work with long term will have been trading some time, so they should have a list of clients you can contact for references. Be sure to double check their references by telephoning a couple of those clients and asking some probing questions about how well the company has handled their account. Whilst doing this, you may want to check the list to see if there are any competing companies utilizing your prospective contract packaging company. Could there be a conflict of interests?

Once you’ve chosen your contract packing company

Make sure that you and your prospecting contract-packing partner are on the same wavelength when it comes to the finer details of any operation.  Speak to your contract packaging supplier often during the set up process to ensure they have all of the correct procedures in place and ensure that you work to the same guidelines in order to make communication, problem solving and analysis easier. This will ensure that everyone knows what they should be doing and avoids any miscommunication.

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