The smaller your business, the more challenging it can be. The process begins with knowing what you want and how to find it.
Start by defining what you want from a contract packager. Is the goal a long-term strategic, full-service partner or just an ad hoc service provider?
If you’re looking for a full-service provider, this type of contract packager can do it all, because:
• They have innovation capability and can help you create new products.
• They offer package-design services and specifications. This capability can be extremely valuable if your organization lacks professional package design capability.
• They provide raw-material procurement services. An established contract packager might provide you with greater purchasing power than you may have, enabling lower raw material costs.
• They offer distribution operations. When shipping products to your customers, the contract packager’s distribution network and capability might save you lead-time and cost.
If you’re looking for a basic packaging converter, you should know the following upfront: You provide the materials while the packager provides the conversion process (packaging). The packager returns the finished product to your distribution facility.
As a third option, you can select a contract packager that falls somewhere in between full-service and basic packaging converter.
There are pros and cons to whatever choice you make. The more capability you look for, the higher the cost. Whether it is worth the cost is something you will have to determine. Sometimes, the least-expensive approach is not the best choice.
There are many ways to go about finding the right contract packager, but let me offer six steps to help find and manage the service provider that is best for your company.
• Identify contract packagers that meet your need.
• Assess their capabilities and performance with some of their other customers and then identify three or more packagers that are the “best fits” with your organization.
• Conduct a Request for Proposal (RFP) with the best-fit packagers, then select the best two or perhaps three.
• Conduct a supplier audit to vet each remaining contract packager on your list in terms of service capabilities and organizational and management compatibility.
• Select the contract packager you want to do business with, identify the key elements of the relationship, and negotiate the contract.
• Manage the process.
Let’s focus further on how to identify the potential players: who is out there and how can they help you get your product to the retail shelf. Here is a list of resources to start your research:
1. Ask your raw material suppliers for recommendations. They interact frequently with contract packagers and can be a great source to help identify potential contract packaging providers.
2. Query the Internet. It is a simple and quick means of identifying the players. The more sophisticated contract packagers will have their own Web site. You can start your search from the very general and get more specific to narrow the field. To try it out, type “contract packaging companies” in your Web browser (Google, Yahoo, etc.) and you will have a terrific starting point.
3. Professional networking. Solicit help and recommendations from your fellow professional colleagues.
4. Networking sites. Using online professional networking sites like LinkedIn can provide you with a resource to help identify and connect with potential resources.
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. Professional organizations. Visit the Web sites of the Contract Packaging Association (use the Request for Quote feature on their home page to refine your search in their membership directory), Professional Purchasing Managers Association, Professional Manufacturing Engineering Association, Consumer Specialty Products Association, and the Cosmetic Toiletries Fragrance Association.
6. Trade and packaging shows. These are terrific venues, and contract packagers generally attend and sell their capabilities. It’s also an excellent opportunity to establish a professional network to aid in your search.
7. Trade magazines. Solicit help from the leading magazines covering the industry, e.g., Packaging World and Contract Packaging.
My number one and two picks are your raw material suppliers and the Internet search. They will provide immediate results. The remaining resources will require more time to produce results but can be very valuable in building your knowledge base.
The author, John Farren, has decades of manufacturing experience, including 32 years with the Gillette Co., where he retired as vice president global contract manufacturing and packaging operations. Contact him at [email protected].
