You may have a decision to make about packaging: do you set up a new packaging line in-house, or look for qualified assistance from a third party? Keep your options open until you know what contract packing services are all about and have to offer.

In this article, we’ll help you get a better understanding of just how broad the capabilities of contract packaging are, and whether the service is a good fit for your business.

Why Consider Using Contract Packaging Services?

Contract packaging, also called co-packing, can be a viable alternative to trying to manage all facets of packaging and storage of your products exclusively on your own.

The challenge of trying to calculate the potential expense potential of the labor and space required to do your packaging in-house is significant. Plus there’s the additional facet of warehousing and its management to consider.

By offloading a section of your supply chain, for example to a 3PL provider who offers co-packing as a value added service, a significant portion of your company’s resources may be freed up to go towards other prioritized growth plans.

There are many benefits to outsourcing elements of your supply chain. You can realize cost reductions, superior packaging results, thorough optimization and professional management of your packaging line.

What are Contract Packaging Services?

Contract packing services are outsourced agreements with third parties that businesses can take advantage of when their own resources for in-house packaging are not fully available.

Some third party businesses offer professional packaging service as their core competency, other providers offer contract packaging and co-packing as additional, value-added services designed to help their clients manage more aspects of their supply chains.

In terms of the actual physical parts of packaging, there are typically two elements that need to be addressed to provide a suitable container for a given product. Namely, primary and secondary packaging.

Primary packing is the container that immediately surrounds the product, whereas the secondary packaging encompasses the primary package.

A robust contract packaging service provider will be able to supply these components, plus be able to label and prepare them for shipping in accordance of their type and destination.

How Does Contract Packaging and Co-Packing Work?

Contract packaging works through supplying all the services and materials related to packaging needs. This includes the purchase, optimization and implementation of the packaging machinery and appropriate materials for your products. In effect, it’s essentially a turn-key solution for outsourcing all the required packaging systems of your business.

Additionally, contract packaging companies can supply the R&D services, packaging design, printing, labour, and complete fulfillment capabilities that many companies don’t have the resources for. In fact, co-packers are often experts in all facets of packaging and related services.

Types of Contract and Co-Packing Services

Contract and co-packaging services can accommodate virtually all types of goods from everyday products to specialty items. The only real limitation is finding the appropriate company that can provide the type of service you specifically need.

For example, if your company produces goods that require refrigeration, you want to make sure you contracted service provider has the capabilities and warehousing to accommodate your products at the temperatures they require. Likewise, if you deal in food items, you’ll want to make absolutely sure your co-packer’s facilities are SQF or HACCP compliant and certified.

Additionally, packaging services can be highly specific to a type of product category, for example – cosmetics. The cosmetics industry would require packaging for such items as lipsticks, lip balms, lip gloss, eyeliners, eye shadows, eyelashes, foundations, mascara, pressed blushes, makeup primers, and brushes.

Examples of Local Contract Packaging Services

The following examples of packaging and co-packing services was gleaned from Thomas:

• Blister and clamshell packaging
• Club and multi-packaging
• Display assembly
• Flow wrapping
• Fulfillment services
• Labeling
• Poly bundling
• Kitting services
• Print bindery
• Club pack packaging
• Shrink sleeving, and shrink wrapping
• Mil-Spec and MIL STD packaging
• Plus many more

Markets Served by Contract Packaging

Virtually every market segment employs contract packaging. Some of the more common examples would be:

• Consumer markets
• OTC (over the counter)
• OEM (original equipment manufacturers)
• Automotive
• Toys
• Military
• Personal care and cosmetics
• Pet products
• Food and beverage
• Household
• Industrial
• Marine
• Medical
• Liquor markets
• And many more

Chances are, regardless of the types of products you make and market segment you specialize in, there’s a contract packaging service provider for them.

In addition, market segments can be further stratified as municipal, government, insurance, retail and manufacturing industries.

Are You Ready for a Contract Packaging Service?

Operating your own packaging line requires the investment in labour and infrastructure, storage space and the packaging machinery itself. Due to the significant amount of investment and capital required, a company that doesn’t have the necessary funding to manage all aspects of their own supply chain is a good fit for contract packaging.

The list of KPI’s you need to consider to develop a packaging line is intimidating and should only be considered if you have a solid growth plan with a proven track record in place. Otherwise, outsourcing your packaging needs to a third party reduces risk until you have such resources available.

In some instances, a company may be at that stage of growth where it makes sense to augment their own in-house packaging capabilities and supply chain needs. By outsourcing some of these needs to packaging service providers, you can save time and money, and are potentially a good fit for partnering with a co-packer.

How to Develop a Relationship with a Contract Packaging Company

To develop a relationship with a contract packaging company, you’ll first need to research a few vendors in your area. Logistically, it makes more sense to work with a provider in your own local region. This cuts down on lead times, downtime, associated shipping costs and generally makes doing business with your chosen partner easier.

You also want to have a packaging provider’s representative come out you’re to examine the state of your current packaging infrastructure. This will give them a first-hand look at how you manage your products, existing packaging line, and peripheral items of importance.

Next, you’ll want to get a quote from each company you’re considering, at least three, compare offers, budgetary requirements and fully assess compatibility. After making an educated decision for the packaging service with the best fit, reach out to the respective representative to begin the purchasing and term agreement processes.

To see if Brimich Logistics and Packaging can assist with your contract packaging needs, contact us today to speak with a packaging professional!

If you’ve designed your packaging to only look good to your customers, you may be in for a nasty surprise. What do you need to know to make absolutely sure your products can withstand the rigours of the journey through the supply chain?

The Importance of Packaging in the Supply Chain

There’s little doubt that retail markets, manufacturing methods, logistical flows and the environment in general are evolving. With this fluid landscape in mind, it’s important to anticipate how your product packaging fits with what’s just over the horizon.

Remember McDonald’s burgers served up in styrofoam containers? Nope, gone.

With respect to the gist of this article, that’s perhaps a little too far down the consumer FMCG supply chain. But the point is, if you don’t keep up with customer trends and expectations (as McDonalds was wise enough to do), you will become history sooner than expected.

Why is Proper Packaging so Important?

Imagine for a second, what condition do you think your smartphone would be in if it had left the factory without any packaging? Would it have wound up in your hand unscathed, in perfect working order without damage? Probably not.

Now imagine that same product perfectly packaged to presumably withstand any hardship on its journey to you, but has to experience severe heat, humidity or other conditions that were not anticipated.

The above examples may be extreme, but they illustrate how the success of each is dependant on the other. Both currents in the supply chain flow, the product deliverable and delivery system itself, have to be in harmony to keep the wheels of any economy turning smoothly.

Just as transportation systems must be efficient, packaging is just as important with respect to the total delivery process. Proper packaging serves as the protective barrier for goods from the time they leave the manufacturer, through transportation to distribution channels and finally landing in the hands of the customer.

Sustainable Packaging and Its Role in the Supply Chain

Making changes towards more sustainable packaging design, even minor ones, can make a world of difference, and a difference in the world. Small improvements in production, materials and operations decrease pressures on resources and reduce environmental impact.

Is there an end point where we say packaging is perfect? The answer lies in understanding that over time, change is inevitable. Therefore as a business owner, it’s imperative that you continually re-assess your packaging efforts, look for opportunities. Smart packaging means refining your processes to be more in line with consumer trends and current supply chain management conditions.

A few solutions that can increase packaging sustainability in the supply chain include:

• Minimal Packaging: Efficient and effective packaging is not only in line with lean manufacturing, it sheds a more favourable light on a company’s reputation as an environmentally conscious and authentic sustainability partner.
• Packaging Weight: By intelligently reducing the weight and mass of packing without sacrificing structural integrity, logistics-related costs can be reduced through decreased fuel consumption and maximized storage space.
• Single-Source Materials: While a see-through plastic window may help sell a pastry or pie, it does nothing in terms of sustainability when it’s hidden inside another opaque container. Wherever possible, alternatives for mixed-materials, especially in consumer packaged goods (CPG) should be considered.
• Dissolvability: Compostable, plant-based packaging continues to be a more favourable marketing alternative. From forks and spoons made of starch to protein-based edible flexible films, their value lies in their efficient ability to return to the earth.
• Re-ability: Reusable packaging in the supply chain along with multi-use containers is not only widely accepted, but continues to gain traction every day. Reusable, refillable, returnable items such as plastic containers are expected to enjoy a CAGR of 9.5% through to 2028.
• Waste Controls: Whether through efficient movements in physical handling and storage, or partnering with 3PL services that practice green logistics, controlling waste of any kind is an imperative throughout the supply chain.
• Legitimacy: Counterfeit products, especially in the e-commerce sector, dilute consumer confidence across the board. By offering a method of verification, such as QR codes on labels or tamper-proof packaging, provide customers with the security they feel is necessary to qualify a purchase.

Essential Packaging Requirements in the Global Supply Chain

If you package your products, you are by default a contributor to the betterment of the global supply chain. As part of a responsible supply chain management strategy, proper protective packaging helps ensure the shipping industry is not encumbered by excess losses and insurance claims due to substandard or inadequate packaging.

While every market segment has its own specific baselines for packaging requirements, all related systems must work together to ensure the delivery process runs smoothly from iteration to destination.

Regardless of the type of item, from a toothpick to a new refrigerator, there are fundamental packaging functions that must be considered:

• Protection: Product packaging must protect the goods from the rigours of shipping, handling and other external factors to make sure that products arrive in good condition.
• Storage: Since products can travel through multiple storage locations before they reach their final destination, packaging and associated materials must allow for convenient storage and meet storage requirements.
• Transportability: Better packaging design allows for more efficient handling, stowing and stacking capabilities. By maximizing available space, all aspects of the transportation process become more cost-effective.
• Tertiary Packaging: The extra layer of protective packaging that safeguards the secondary and primary packaging levels of the goods. Not only is there an organizational benefit through grouping products into a single container, using eco-friendly materials for this function is generally more favourable as we move towards global awareness and environmental responsibility.

Final Thoughts

There are many aspects to packaging that work with and within an evolving supply chain system. Major influences include the ability to draw from data-based feedback, making forward-thinking decisions based on solid information and managing the supply chain responsibly.

To successfully accomplish this year after year, we must be able to predict and control key resources such as product protection, specifications, delivery times, inventory levels, workforce stability and perhaps most importantly the safety of all who are part of the global supply chain network.

What Does Packaging Optimization Mean?

In simple terms, “packaging optimization” is a process that utilizes smart packaging. This refined method of packaging is designed to safely contain, protect and communicate the specific contents of your packaging as your products travel through the various handling processes within the supply chain.

The product’s journey starts with the manufacturer, then may go on to a warehouse or in-store fulfillment centre, and ultimately wind up being delivered at its final destination. This  last mile of delivery could be a consumer’s home, an office building, retailer or other end point.

At each step along the way, there are factors which determine in what condition your products will ultimately arrive. Optimizing your packaging for the rigours of your product’s journey can make all the difference in the world.

Start by Choosing Optimal Packaging Materials

The first step in choosing optimized packaging for your product is in fully understanding its vulnerabilities .This involves going the testing stage (if applicable), then determining the best packaging materials.

Once your product has gone through testing using established protocols for its shipping class, the next task is developing the the proper packaging to help protect the product as it navigates through all supply chain environments.

This packaging system is broken down into three levels:

1. Primary Packaging – The packaging directly in contact with the product itself and is often designed with the “unboxing” experience in mind. Other considerations are product protection and perhaps store display.
2. Secondary Packaging – Packaging that’s just outside of the primary packaging and typically used to create a stock-keeping unit or SKU. Also part of the unboxing experience, this protective layer also helps guard against moisture and humidity.
3. Tertiary Packaging – Referred to as transit or bulk packaging which often forms a group quantity of SKUs. This level of packaging is the final layer used to protect the products in transport, safely and securely, from point A to point B. For example, this could be from a manufacturer’s loading dock to the final point of sale.

How Much Packaging is Just Enough for the Environment and Supply Chain?

In order to save on costs, many products wind up being under-packaged. This results in avoidable damage that sends the product into reverse logistics. This also produces product waste along with associated fees and other costs.

Conversely, there are some products which are over-packaged using far more material than is necessary. This excess is not only wasteful in its own right, but has an impact on our environment. Not just in terms of landfill or limited recycling, but in transportation costs due to size and weight issues. These overages in turn lead to excess fuel and energy consumption, along with higher transportation fees throughout the supply chain.

The sweet spot in optimal packaging should be designed to fit the requirements of your supply chain with these key points in mind:

• The right type and thickness of packaging films or rigid plastics
• Effective thickness and properties of foam or protective packaging
• An appropriate strength and flute of corrugated board used
• An efficient use and amount of winds of stretch wrap
• An efficient use of packaging tape or adhesive in the right location

Optimize Package Design

Whether you’re designing a package from the ground up or updating an existing design, there is value in following best practises within your industry, along with taking cues from consumer feedback.

Some considerations may include using fewer materials or lowering packaging weight. For example, modern packaging materials may include a dissolvable bag-in-container for non-solid or semi-solid products such as cereals. Or a bio-degradable rigid container might offer the right benefits for transport and storage space for other products.

Now with the right packaging and materials selected, it’s on to actually designing and engineering the packaging. Keep in mind this can impact different sections of not only the supply chan, but you own general packaging operations:

• Manufacturing & Operations – Your package design should ideally work within your current manufacturing processes and automation equipment. Additionally, these optimized packaging requirements should enable your systems to run at their optimal speeds.
• Material Vendors – Is your current material vendor able to produce the package to your specifications, and are they in line with your packaging objectives? Upgrading design factors can affect material vendor capabilities, as well as your own manufacturing systems. Therefor, make sure your provider’s equipment capabilities, material competencies and visions for the future are up to the task.
• Supply Chain Costs – Unique or non-standard shapes can impact your transportation expenses. Your packaging is truly optimized when all systems and touch points are maximized – or minimized as in the case of wasted air space. Shipping air, unless it’s absolutely necessary and relevant to the product, is wasteful.

Optimize Product Counts for Better Cost & Efficiency

End-users and customers often dictate the order quantities and case counts – that is, with the exception of the number of hot dogs in a package with respect to the number of hot dog buns  – a mysterious mismatch. Regardless, this demand is true for not only consumer packaged goods (CPG) manufacturers, but B2B manufacturers as well.

Fitting more product on a pallet without compromising product safety can improve your overall cube or product shipping density. This is an important part of transportation optimization especially when you use less-than-truckload (LTL) freight extensively. Similarly, fitting more product on a retail shelf or within storage can also help reduce inventory and storage requirements.

What is the Right Amount of Packaging Protection?

The right level of packaging protection will ultimately mitigate or at least minimize damage during transit or stacking. Effective packaging protection designed for specific products can have a wide array of requirements. For example:

• Protective barriers for pharmaceuticals and food products to help extend and maintain shelf life. This industry-specific packaging protects against environmental damages and penetration from oxygen, moisture or other contaminants.
• Fragile products require additional shock protection. This helps keep products from suffering damage due to mishandling and impacts.

Standardize Your Product Package Designs

Consider standardizing package sizes and dimensions across multiple products. This lets you increase efficiencies by streamlining manufacturing, reducing system changeover times, and improving line utilization. The added benefit is less risk of wastage as excess packaging can be redirected to other products with minimal loss in time, effort and materials.

Build Sustainability in Your Supply Chain

Baking in energy-efficient production will not only help reduce stress on the environment, it can also help your bottom line. Choosing to use energy-efficient machines and forward-thinking packaging materials with lower manufacturing temperature requirements, can produce very real and tangible savings.

Incorporating sustainable practices, recyclable materials and reusable packaging helps keep your packaging agile, adaptive. and generates goodwill towards the public’s growing awareness that environmental problems indeed need to be addressed now more than ever.