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Got Capacity? Need Some?

In light of current supply chain disruptions, both CP/CMs and their clients must be more realistic than ever about estimating capacity for new business opportunities.

Robby Martin, Engineering Specialist, Bush Brothers & Company
Robby Martin, Engineering Specialist, Bush Brothers & Company

In my previous columns, we’ve discussed what makes a successful partnership between co-man/co-packs and their customers. This month, I had intended to write about capacity. I never imagined by the time of this column we’d be facing such a volatile and uncertain environment. So, though I still want to discuss capacity here, let’s first recap some of today’s realities as a prelude.

The supply chain disruptions that began at the end of Q1 of 2020 have extended into and beyond some of the most critical lockdown periods that COVID thrust upon us. Moreover, the responses by individuals and even companies to recent increases, or spikes, in COVID cases, remain even more mixed, if not muted, versus the responses put in place in 2020. Maybe more recent responses are due to an improved assessment of risk. Maybe they’re due to a better understanding of the virus and the remedies or treatments involved. Personally, I believe at least some of the more limited response is because individuals and companies have simply learned much about how to cope in the more recent phases of the pandemic.

However, even with an overall improving personal and local backdrop, with so many linkages across the globe, the worldwide supply chain continues to mostly push and pull against itself in the areas of supply, transportation, pricing, scarcity, and many others. And, we don’t have space or time to even get started on cost inflation! I’m poorly qualified, and I won’t waste your time with facts on this topic as you can find plenty of material written about what’s going on and what to expect. Instead, I’d like to focus on how we talk about this with our CP/CM partners, especially when we are all experiencing many of the same issues as those mentioned above. For the purposes of this column, we’ll wrap this into another area of importance in a CP/CM partnership arrangement. Of course, I’m talking about capacity.

Just as with some of the other areas we’ve addressed in this space, capacity has many factors in play in CP/CM arrangements. The demand expected by a client is one of the earliest questions asked in an inquiry into capabilities and project fit. While this is often to help a CP/CM decide the value of a potential project, it’s also crucial to developing common expectations as an agreement comes together and a partnership is formed. Now, as a CP/CM provider, you may think you want all the volume someone is willing to give you. But, if there ever was a “careful what you wish for” moment, this could be it! In these volatile times, your own assessment of what you can handle is subject to certain criteria and context that is likely not entirely stable. This makes your appetite for business volume difficult to manage if you’re not careful and honest in your self-assessments.

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