Three Reasons to Outsource Packaging Operations in Asia
Businesses today operate in increasingly specialized environments with greater specialized teams responsible for more specific specialized tasks. For global organizations with Asian-based manufacturing operations, one such task is the strategic management of packaging.
How Managed Packaging Can Give You a Competitive Edge
Unfortunately, large companies working with multiple packaging suppliers in Southeast Asia find it difficult to account for their discrete needs and true packaging requirements, let alone maintain the level of control and transparency needed to achieve the triple bottom-line benefits of optimum packaging: social responsibility, economic value and reduced environmental impact.
If you don’t have the right people or processes in place to strategically manage your packaging operations in Southeast Asia, you have two options: invest or outsource. There are certainly benefits to building an in-house team of designers, engineers and project managers that are laser-focused on the total cost optimization of overseas packaging programs, but it’s a long (and expensive) road to achieving the same level of expertise as outside specialists. Even then, unless you are planning on imbedding people in Vietnam, Thailand, the Philippines and anywhere else you have manufacturing operations, you may still not have the same level of control as specialized packaging partners.
Deferring to experienced packaging providers can give you a competitive advantage by placing essential strategic packaging functions and decisions in the hands of those best prepared to manage the development, production and delivery in Southeast Asia. Some of the key benefits of consolidating overseas package-material sourcing and production under the expertise of specialized partners include:
“Headlines tell us that we are entering an era of extreme uncertainty regarding international trade,” says Robert Testa, Sales Director of America Corrugated Solutions at Billerud. “As a result, U.S. and European companies with Asian-based manufacturing operations are looking for new ways to mitigate and control costs as they navigate these choppy waters.” One effective risk-mitigation strategy is to take advantage of the regional expertise provided by specialty packaging companies that are focused on that part of the world.
Procurement is hard enough with local suppliers; when you are sourcing packaging on the other side of the globe, it becomes even harder to have the level of control needed to make strategic decisions, let alone act on them. It’s no different with packaging.
For companies operating in Southeast Asia, there are many factors to consider with respect to packaging specifications and requirements. Even minor differences in paperboard grades between suppliers in the United States and Asia, for example, can have a significant impact on the strength (and aesthetics) of your packaging. By partnering with a regional packaging expert, you will avoid some of the common missteps that could end up costing you millions of dollars.
Do you feel confident finding (and evaluating) packaging suppliers in Asia? Do you wish you had a larger, or more reliable, network of packaging suppliers in the region? Unless you are planning on attending a packaging trade show in Asia or have dedicated packaging support teams in countries where your factories are located, it may be difficult to make changes to your supplier network. Fortunately, there’s an easier and more cost-effective way to find the right packaging suppliers—let someone else find suppliers for you.
Another benefit of partnering with a packaging broker or production company with regional expertise in Southeast Asia is access to a wider network of pre-approved suppliers than you could expect to find on your own. Brokers, consultants and contract packagers that specialize in packaging procurement and production in Southeast Asia usually have offices overseas and people on the ground whose job it is to find the right suppliers for their clients.
Global companies are wise to the savings opportunities present in their packaging operations, but few are very adept at unlocking those savings. A major hurdle in the way of total cost optimization is the very nature of the relationships packaging engineers have with their suppliers in Southeast Asia.
In order to drive any kind of measurable packaging initiatives, packaging engineers must first benchmark their existing program and then gather pertinent information from suppliers regarding unit cost, production capacity and lead times, among many other things. If you rely on your factories to provide such information, you may not get the most accurate, honest and up-to-date figures you need for the decisions you are trying to make. Specialty packaging providers that operate in Southeast Asia don’t have any such problems, and neither do the brands that partner with them to drive actual packaging improvements.
Ask yourself, do you really think a factory will tell you that a proposed change in design or material specification will save you money if it ends up costing them money? By having an outside party represent some (or all) of your packaging interests in Southeast Asia, you can avoid the run-around from factory suppliers so you can enact real change in real time.
Consulting Packaging vs Managed Packaging
If you’re considering outside packaging help, first decide what kind of outside help you need.
Packaging consultants can deliver files and process strategies, but they can’t implement their recommendations or execute the packaging programs they help design. At Billerud, we support global organizations at every step of the international packaging supply chain, allowing companies to focus on other mission-critical aspects of shipping goods from Southeast Asia to Europe and North America.
Our packaging experts look for solutions beyond the obvious, and in the process uncover hidden savings opportunities throughout your supply chain. If you don’t ask a consultant to look in the right place, they might not look at all. At Billerud, we look at everything to find you savings.
Customer engagements begin with a no-obligation, no-cost audit of your packaging and shipping operations in Asia to identify savings opportunities.