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COVID-19 Might Forever Change the Service Provider/End-User Relationship

Through the years, I have seen a variety of events and situations cause changes in the packaging industry.

Brian Stepowany

One that caused a change for me was a weather-related event that destroyed the supply chain of the company I was working for at the time. This event caused my former employer to change its manufacturing and procurement practices to ensure we could continue to supply our customers when a plant had been put out of service for an extended period.

And now, the COVID-19 pandemic has caused changes in the packaging industry. Let’s look at four potential changes in the service provider/end-user relationship. There are many aspects to how the COVID-19 pandemic has affected the current supply chain, and its effects will also modify how we look at business models moving forward.

1. Secondary sourcing will become critical. The first idea that pops into my mind when thinking of COVID-19 is the number of people affected. For some companies within the supply chain, the number of workers has been depleted and output has been decreased. This, in turn, affects supply chains as well as the timelines on all aspects of your business. Similar to my previous experience with the natural disaster, secondary sourcing becomes critical, so you need to have another source either within one company or a separate secondary source. What’s the saying, “Don’t put all your eggs in one basket?”

From this COVID-19 learning experience regarding single sourcing and its risks, companies might not put all their eggs in one internal manufacturing basket, and perhaps in the future companies will be open to dual sourcing for redundancy and business continuity. This dual sourcing capability also will lend itself to flex capacity to address temporary surges in demand or a seasonal product.

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