Now that they’ve squeezed out as many nonessential internal costs as possible, they’re beginning to look externally to do the same. Contract packagers who can assist consumer packaged goods companies in this quest while also keeping their products "on brand" with consumers and retailers might have the edge in the battle for new business.
At the Coca-Cola Co., concepts such as "lean manufacturing" and "Six Sigma" will drive the consumer products giant’s operations heavily over the next three to five years. Coca-Cola is on the lookout for packagers and fillers that can present innovative ideas that help take costs out of the soft drink company’s supply chain without sacrificing the Coca-Cola brand’s equities.
At Contract Packaging magazine’s recent CP 07 conference, John Postel, manager, contract packaging, explained how Coca-Cola is accomplishing its goals.
"As we begin to see you as an extension of our manufacturing system, we expect to see that you will be running your organization similar to how we run ours," Postel told contract packagers in the audience.
Postel disclosed that Coca-Cola is creating both a scorecard and a performance matrix to guide its evaluation efforts.
"One of the things that we are looking at is what we call ‘Production to Adherence,’" Postel said. "If you are manufacturing solely for us and your line is dedicated, then we look at the efficiency of that particular line. We look at quality, how you pass our internal audits. We are looking at safety and environmental issues within your plant. We also look at your third-party audits.
"We also look at order-fill rates, or order cuts. If you are producing 100% for us, then we are looking at how you impact our customer service rates."
Coca-Cola also has a goal of conducting reviews at least quarterly with its co-packers’ management and production teams.
