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Article | May 4, 2009
Using a contract packager
In April, we published advice from packaging professionals about selecting contract packagers (aka co-packers or private-label manufacturers).
• Make sure they can grow with you; you should be able to forecast your production needs and plan accordingly. • In general, the CP will only be as strong as its management. • Check to see if they are financially sound and if they have had any product recalls. • Conduct a ship test to ensure structural integrity. If custom packaging is being purchased, outline inventory liability. If capital is required, clarify volume expectations and track when depreciation expense is fully absorbed. • It is a partnership; make them swear that WE are in this together— ownership!
This month we provide insights about using CPs. Here are some of the 150+ survey responses, edited for clarity. • Always attend first production runs, and sign off on an agreed master sample. • Make sure specifications are clear and unambiguous. Make random Quality Assurance checks with your team at the contractor’s site. • Demand that your CPs have the processes and systems in place to ensure product quality and compliance (for example, traceability) and efficiency. Real-time visibility of their production and inventory, particularly if it can be shared with the end customer, ensures that management has good control of the business. • Establish your own quality expectations, determine the contractor’s ability to perform to that level, and follow up on documentation, and then LEAVE THEM ALONE! • You can never be too explicit with instructions. Also, make sure you know the key people at the packager, especially those in the warehouse, packaging, QA, and shipping departments. Make a point to visit on a regular basis, have quarterly update meetings, and generally be known at the packager. • Develop a good working relationship and go into projects with an open mindset.• Know your industry and the market. If your firm also manufactures internally, use your internal cost model as a benchmark and leverage in your negotiations. • Control of components and service needs must be well-defined, followed, and executed by the packager. • For food and pharmaceutical products, ensure that the packing equipment is cleaned to GMP/FDA standards on a regular basis. • Work with one that offers good communication and does not over-commit on abilities or timelines.
For more responses, see packworld.com/webonly-27313.
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