Contract Packaging (I)

In the process of manufacturers constantly looking for ways to shorten the market feedback time, packaging procurement has become an important production strategy. End users can test new packaging products without risking investing too much in equipment and labor.
As packaging manufacturers face more and more market branches, the fastest growing area to meet this demand is to sign contracts with cooperating packaging companies. When retailers see “catch up with market speed” as the highest priority, manufacturers find that external procurement of packaging is the fastest way to accomplish business. Of course, its cost is also high, but this part of the cost can be earned back in the value-added sales process.
Packing World magazine conducted an in-depth investigation of the contract packaging last fall. These are just some of the conclusions drawn from this survey. This survey not only set up three separate questionnaires for contract packaging on Packworld.com, a world magazine packaging website, but also interviewed contract packaging staff and their customers.
This article will discuss the overall trends exposed.
The understanding of contract packaging is often unclear. You know what it means, but you can't express it. In addition, there are many expressions for contract packaging in English, such as co-packing, contract manufacturing, repackaging, co-packaging, and fulfillment. Although each of these terms represents some specific behavior, many packaging workers obscure the differences between them. In essence, these terms are often used interchangeably by industry personnel.
For example, the manager of the packaging department of a major state-owned food processing company claimed during a meeting that the company had more than 100 "co-packers" in the country to cooperate with. When asked about the meaning of co-packer, he admitted that companies did not qualify for co-packaging. He used this term only to show that all those companies that provide them with packaging services. Whichever term is used, they have the meaning of an external procurement package.
As pointed out in the end-user survey report, there are many major factors in the company's search for external procurement packaging functions. Although many end users believe that "there is no mature technology within the enterprise" is one of the main reasons, but the cooperative packaging companies that also participated in the survey believe that they have not obtained too much profit from it. Nearly a third of the co-packaging companies believe that “speeding up the market” is their main advantage to most end users.
To install and run a packaging line or to set up a packaging plant requires a lengthy application approval process, and some companies have realized that contract packaging companies can temporarily or permanently replace this process.
In addition, the unavailability of labor skills in the end-user is also a major factor, and this is the advantage of 27.5% of the contract packaging companies. Companies that purchase packages externally usually pay only for the part of the labor they need, thereby reducing the cost of having to hire them for years. This advantage was once one of the controversies between the coalition and non-union, but it is not so important now. Some contract packaging companies have been organized, but their labor costs are substantially lower than many manufacturers. (To be continued)