3 Signs You Need to Find a New Packaging Supplier
Are you happy with your current packaging supplier? If packaging is more of an afterthought than a primary focus, chances are the answer is yes.
If you consider the true cost of packaging and how it impacts your brand as much as your bottom line, you may start to question whether your packaging suppliers are actually a good fit. Formal packaging audits consider a lot of inputs and variables, but there are a few signs that can point you towards the conclusion that it’s time to source corrugated packaging from somewhere else: your packaging is not up to spec, your packaging supplier is not transparent and your supplier poses a threat to your organization.
Your Packaging is Not Up to Spec
Packaging designers and engineers spend an incredible amount of time defining specifications related to the materials, shape and structure of each product’s packaging “system” (i.e., the sum of a product’s primary, secondary and tertiary packaging). Packaging specifications consider many different factors, including weight distribution, product tolerances and fulfillment methods, to ensure that goods and materials can make it through the entire supply chain unharmed.
Every packaging parameter matters to the designers and engineers who defined them, but they don’t always translate to what actually gets made in the packaging factories, especially if your company is using antiquated tools governing the specification management process. According to a recent survey of packaging professionals, 70% of respondents indicated they were either using spreadsheets, shared folders or simply nothing to manage their specification data. If you don’t have a good system in place for managing specification data, you may also struggle to communicate those specifications to your suppliers and make sure that your suppliers are consistently delivering packaging to spec. Unfortunately, even small variations in any of these parameters can have major downstream consequences, especially if your packaging has been designed and specified with your supply chain in mind.
Companies should audit their packaging on a regular basis to ensure that their suppliers are delivering exactly what was requested (and paid for). If you discover that any of your packaging is not up to spec, it may be time to reevaluate your packaging supplier. Alternatively, if your packaging needs (and specifications) have changed, you will need to assess whether your existing supplier has the right packaging equipment, expertise and experience necessary to deliver. If you’re not sure about their capabilities, that could point to a larger problem, and also the next sign that you need to find a new packaging supplier: lack of transparency.
Your Packaging Supplier is Not Transparent
It’s one thing if you aren’t asking your packaging suppliers the right questions, but if you ask and your supplier either doesn’t know or won’t answer, it’s time to reevaluate your relationship. Lack of visibility makes it impossible to direct, implement and measure any significant or meaningful changes to your packaging program, especially if you are trying to manage packaging on the other side of the world. For example, if you are sourcing packaging in Southeast Asia and don’t have dedicated personnel on the ground, you must rely on your suppliers to provide you with the information and insights needed to make strategic packaging decisions. Alternatively, you can look to outsource or complement elements of packaging management with companies that have people in the countries where you have manufacturing facilities and warehouses to provide you greater packaging visibility and control.
Examples of information you should be able to receive from your packaging supplier include:
- Unit cost
- Packaging capabilities (people, processes, equipment, etc.)
- Second- and third-tier suppliers
- Certifications that the supplier holds ( i.e. ISO9000, ISO14000, ISO18000, FSC, etc.)
- Supplier scorecard or performance report
- Operational, commercial, compliance and quality reports
Your Packaging Supplier Poses a Threat to Your Brand
The days of “business as usual” being “good enough” are gone. Consumers around the world are increasingly demanding more from the brands they know and using different metrics to evaluate the brands they don’t. Consumers not only expect companies to improve their business practices and invest in social issues that are aligned, but to be a force for change in broader society—which means doing business with entities (e.g., packaging suppliers) that care and share their beliefs.
The 2017 Cone Communications CSR Study found that consumers that have a more positive image, are more likely to trust and are more loyal to companies that support social and environmental issues. According to the results, 70% of consumers believe companies have an obligation to take actions to improve issues that may not be relevant to everyday business operations (respondents identified poverty and hunger, environment and human rights as top areas for corporate involvement). The Billerud Consumer Panel found that consumers may even be willing to reward sustainability efforts by spending more on products and with brands that champion social and environmental issues: 72% of respondents from mega-cities around the world indicated that they would be willing to pay more for a similar product if packaged in a way that provides substantial sustainability benefits.
Besides supporting ethical and sustainable brands, many consumers are also willing to punish brands that prioritize profits over the planet. According to Cone Communications, nearly 50% of respondents said they have boycotted a company in the last year for irresponsible business actions or because the company supported an issue contrary to their beliefs. These findings are consistent with other studies, such as the 2018 Ethical Consumers Markets Report that found 49% of the UK population had chosen not to buy a particular product or shop at a particular outlet because of concerns about its ethical reputation (27% of personal boycotts conducted by shoppers in the UK in October 2018 were against businesses with a negative environmental impact, and 19% were in response to unethical corporate practices).
And if you think consumers won’t look at all facets of how your brand impacts society and the environment, think again. As consumers continue to show their support or disapproval for companies through financial sway, their propensity to do extra digging on company programs has increased over time. According to the Cone Communications study, 39% of Americans report they have done research into a company’s business practices or support of social or environmental issues in the past 12 months.
What does all of this have to do with your packaging supplier? In short, protecting your brand. If consumers discover that your packaging suppliers are violating human rights or polluting the environment, it could hurt your brand in a big way. Again, this is why it’s critical that you have full visibility regarding how your packaging suppliers operate and even who they work with, since second- and third-tier suppliers can be just as damaging to your brand if consumers are able to connect bad actors with your packaging or products in any way.
Do You Want More Packaging Control?
Billerud can help. We make the complex world of packaging simple by acting as the single point of contact for all of your packaging needs in Southeast Asia. We have teams of people in offices around the world and a network of production partners to support global brands at every step of the international packaging supply chain. We are also committed to driving social compliance, workplace safety and quality assurance, as these are all integral to the long-term success of our company as well as our partners.