- Contract Packaging
- Leaders in Packaging
Article | March 31, 1996
Five reasons to work with container 'resourcers'
"Fast. Flexible. Focused. Resourceful." Those are the hallmarks of today's successful packaging operations and packaging managers. But, as growth in the U.S.
consumer market continues to slow companies on both sides of the packager/supplier equation are consolidating. As a consequence packaging managers are being pressed to be faster more flexible more focused and ultimately more resourceful. And they're expected to do all that with smaller staffs. "The downsizing of American companies is hurting packaging operations" the packaging director at a Fortune 200 company tells us. "We're downsizing and our suppliers are downsizing. The people with experience are leaving and the ones who are left are being overwhelmed by changes in the marketplace." Given the circumstances it's not surprising that packaging managers are turning in growing numbers to a cadre of independent experts to help them solve their deadline-every-day packaging problems. Among those experts is a small group of experienced packaging entrepreneurs for whom tight budget times are the best of times. We're talking about the 40 or so warehouse distributors who make up the National Association of Container Distributors. As corporate downsizing aggressive competition and insistent retail customers force manufacturers everywhere to rethink their packaging paradigms many now realize they can do things better faster and less expensively than they have in the past. There are at least five reasons why packaging managers are forging strategic packaging partnerships and alliances with container distributors. Among them: 1. They are experienced. A typical container distributor has been in business for 80 years. Unlike other segments of the packaging business distributors tend to be entrepreneurial family operations where packaging market insights sourcing strategies and customer capabilities are handed down from one generation to the next. This builds a unparalleled repository of "problem solving" experience. Handling the container and closure needs of packagers for three or four generations makes distributors a unique historical resource for packagers. 2. They are "power" purchasers. It's not uncommon for distributors to be among a container manufacturer's largest customers. While statistics vary from manufacturer to manufacturer distributors on average account for about a third of all domestic bottle closure and dispenser sales in the U.S. Because distributors source containers for a number of different packagers they tend to be large-volume steady buyers of containers closures dispensers and related packaging components. Sales to distributors are invaluable to producers whose margins depend on maximizing production capacity levels. Consequently container distributors can and do leverage their purchasing power to negotiate lower prices than most individual packagers could achieve. 3. They are the producers' partners. Over the last 10 years most container manufacturers have undergone a considerable amount of restructuring and downsizing of their sales organizations. One effect of this manufacturer downsizing has been the establishment and/or enhancement of sales/marketing relationships with distributors. In some markets where manufacturers once maintained sales offices distributors are the producers' only local links to packagers. 4. They are price competitive. Whether they're bidding on a single order of 50 stock bottles to ship for an isolated test market or a contract for 50 custom containers a week for a national product launch from several different production sites distributors can often beat manufacturer's prices. Coupled with their purchasing power most have efficient flat hierarchies and low overheads. The "owner-operator" philosophy that drives most container distributors finds many distributor executives wearing several hats. Equally at ease on sales calls or on a warehouse loading dock successful distributor executives keep their customers happy (and their margins healthy) by reducing costs wherever they can. 5. They are responsive. As flat as their hierarchies are container distributors' customer response mechanisms are multi-dimensional. Shipments that go out the same day they're received are not unusual. Fleets of distributor trucks make one- two- three- or more-time-a week drops to keep hundreds of national and regional packaging lines clicking. Most NACD distributors maintain well-stocked warehouses and quickly draw down inventories to handle fast turnaround orders. To keep the just-in-time pipelines filled "can-do" distributors can also ship containers directly from manufacturers to customers. Special orders? Distributors pride themselves in converting desperation "last resort" calls into regular first-call customers. Do they also walk on water? Distributors don't pretend to be able to solve everyone's packaging problems. But the work they do belies their name. "Distributors" puts too narrow a spin on their capabilities. Think of them as the National Association of Container Resourcers and you'll understand why packagers today are turning to them in growing numbers. c
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