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Preventing the dreaded stockout

In a world where retailers frequently fine Consumer Packaged Goods Companies when a stockout occurs, sellers of previously owned packaging equipment can prove to be a highly prized asset and ally.

Frain Industries is a Chicago area firm that specializes in certified pre-owned packaging equipment. Because they offer the buyers of packaging machinery an alternative to brand new equipment, I would have assumed that the relationship between companies like Frain and packaging machinery OEMs, the makers of that brand new equipment, would be somewhat strained if not contentious. But in a recent conversation I had with David Eggleston, Chief Operating Officer at Frain Industries, I learned that packaging machinery OEMs often value the role played by companies like Frain because speed to market has become so profoundly important to today’s brand owners.

A lot of it has to do with stock-outs, which, according to Eggleston, are a huge concern to CPG companies these days. Retailers today charge a CPG company a penalty if that CPG company fails to ensure that packages of its cereal or diapers or condensed milk are always available enough in inventory that consumers will be sure to find those products when they enter a store. So if a CPG company needs a new line to be able to produce enough inventory to prevent a stockout, companies like Frain can quickly add capacity on a rental basis. In the process, they buy some time for the OEM, time that can be used to make the new equipment.

“With certified pre-owned packaging equipment, we can get a customer up and running in anywhere from one to 10 weeks, depending on complexity,” says Eggleston. “The average OEM time frame is anywhere from 20 to 25 weeks.”

Once the brand new equipment from the OEM is ready, the Frain-supplied equipment can be removed and returned back to Frain until it’s needed in another factory.

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