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Look in unlikely places for inspiration. Shift to strategic thinking. Look for opportunities in private-label. Speakers bring ideas galore to Naples, FL, for service buyers and providers.

STRATEGIC SHIFT. Lisa Shambro, executive director of the Foundation for Strategic Sourcing, says contract packaging clearly is m
STRATEGIC SHIFT. Lisa Shambro, executive director of the Foundation for Strategic Sourcing, says contract packaging clearly is m

Lisa Shambro spends a lot of time analyzing the supply chain relationship between product manufacturers and their contract manufacturers and secondary packagers. Shambro, executive director of the Foundation for Strategic Sourcing, has come to the conclusion that two fundamental problems are preventing the optimization of relationships between consumer product companies and their service providers.

In her presentation opening the Contract Packaging Association’s annual meeting Feb. 19 in Naples, FL, Shambro said that:

• Product manufacturers often are not communicating internally about the full value of outsourcing services beyond matters of price.

The service providers too often are doing an inadequate job of explaining the breadth and value of their services beyond price.

• Both the manufacturers’ and service providers’ approaches need to change, Shambro explained, because the industry is continuing to move rapidly from a traditional make/pack/ship operation to service offerings that provide a far more integrated approach both upstream and downstream of traditional manufacturing and packaging. The gap is widening between the least capable and most capable service providers, she added, with implications that need to be weighed carefully as the relationship between product manufacturer and service provider evolves from short-term, tactical operations to long-term, strategic partnerships.

Trend toward strategic partnerships

“What we’re seeing now is divergence,” Shambro said. “There is a trend brewing in this industry. I would describe us as being somewhere in the middle between tactical and strategic, but now we’re starting to see a significant move toward strategic is upon us.”

Shambro issued some key points that contract manufacturers and packagers should focus on to better serve their customers. These typically are requirements of major product manufacturers, and they can provide some guidance for smaller consumer product companies on developing expectations for their manufacturing and packaging service providers.

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