Such was the case with this electronics marketer. The company recently extended its brand portfolio of professional-grade products with the introduction of high-grade consumer electronics in retail stores. Sales spiked quickly, prompting the need to accelerate product production and sharpen time- and inventory-management capabilities. As a small enterprise, the electronics marketer lacked the ability to handle the attendant challenges, so it sourced a contract packager to help.
The electronics company also hired a purchasing manager, and it was determined that the co-packer lacked the flexibility necessary to meet product demand. Nor could it resolve other issues. For those and other reasons, the co-packer was terminated.
The two electronics company managers told me that the unraveling of this relationship offers a few lessons. Among issus souring the relationship:
- The co-packer’s project manager assigned to the job lacked effective project-management skills. • Neither company identified who would lead package-design efforts.
- No one discussed forecast volatility. What could have been done differently?
“We should have done an ISO-type audit on them,” the purchasing manager said. “We should have asked to see their team. We would have realized that they were drastically understaffed.
“We, on the other hand, had established a business process, but it was not handed off well to functional departments. “And the original team disbanded way too early.”
