Did you know that supply chain emissions are on average 5.5 times higher than emissions from direct operations? That means for the average enterprise, the emissions footprint of its supplier ecosystem is more than five times greater than the emissions footprint of its own offices and facilities. Consumers are much more aware of sustainability issues affecting the globe and are demanding more sustainably produced products from the companies that make them. Investors are also choosing companies that have sustainability first mindsets, to help them meet both consumer demand and adhere to governmental pressure to strengthen their environmental regulations. For enterprises such as consumer brands, being “green” is increasingly becoming an integral part of doing business. 

Contract packagers and manufacturers have a strategic role to play in minimizing waste in the upstream supply chain and need to know exactly what materials and inventory there is in their systems to avoid inefficiencies and waste. 

A recent report called the PMMI Business Intelligence report 2022 Shaping the Future of Packaging Operations, additionally indicated that “packaging operators recognize that they are somewhat behind the curve regarding sustainability and are aware of the need to catch up. However, a true industry shift will require technology breakthroughs…” 

In order to maintain profitable efficiency in tight markets while delivering greater service standards for their brand customers, co-packers have much to gain from investigating in new ways to drive more efficient and sustainable operations. 

However, achieving more efficient operations in order to reduce waste requires enhanced visibility, efficiency, and collaboration with customers, and it is here that a purpose-built digital platform can deliver such value to these businesses.

1. Increase shop floor visibility and control: 

Digitization, through cloud-based software platforms can enable co-packers and leading consumer goods companies to increase their speed to market and gain much greater visibility across their operations. By knowing exactly what stock levels and order requirements exist, users maximize efficiencies in packaging operations to deliver better service with far less waste from issues such as over stocking, expedited deliveries or unused inventory.

2. Enhance collaboration and communication with customers:

By using a purpose-built platform for contract packaging operations to enable real-time visibility into the production floor, companies can also significantly reduce lag time of production status updates, enabling them to notify partners about potential order disruptions and opportunities, as well as the response times to those events.

In addition, a central data platform for the co-packer can create a single source of truth for order and inventory statuses, allowing the company to collaborate more quickly, clearly, and effectively with brand customers, building the relationship and strengthening trust between all parties. 

Ultimately, increased responsiveness and collaboration reduces time wasted as well as materials obsolescence from inefficient actions taken responding to supply chain and demand-related order disruptions. Organizations much look beyond their own enterprise and work together (with customers and suppliers) in concert to eliminate the “Bullwhip Effect” and mitigate the impacts of supply chain disruptions by synchronizing the end-to-end supply chain.

3. Maximize labor efficiency:

Digitizing the shop floor also alleviates constraints caused by labor and skills shortages. Between the “great resignation” and the “gray wave” of retirements, businesses that digitize their operations remain productive regardless of the workforce running them. Digitization results in standardized processing, data collaboration and improved efficiencies while delivering visibility, control and agility for co-packers.

Further, co-packers are better prepared for disruptions and spikes in demand when they future proof their operational workflows with modern technology. These organizations become the “supplier of choice” with more efficient, profitable, and sustainable operations.

Co-packing digitization 

Efficiency is the key to reducing waste in the supply chain while maximizing profitability. From providing live access and updates during production, to ensuring easy identification and isolation of stock or the ability to check that all components are available for each bill of materials, co-packing software ensures that operational waste is minimized, and resource efficiencies maximized across the business.

Shop floor digitization also provides the visibility and tools to help contract packaging and manufacturing businesses further reduce their impact by enhancing their ability to manage materials and inventory. Cloud-based software solutions are already generating value, meeting brand and consumer demand for greater sustainability, and will continue to enable businesses to innovate and drive out waste in this growing part of the global supply chain.

By enabling data automation on the shop floor, co-packers are leveraging improved collaboration with partners and achieving improvements across their entire business, helping deliver value to brand customers through more efficient and less wasteful operations.

Author’s Bio

Jason Tham is the co-founder and CEO of Nulogy. For more than a decade, Jason has led industry thought leadership with speaking engagements for the Contract Packaging Association, the Gartner Supply Chain Symposium, the Council of Supply Chain Management Professionals (CSCMP), among many others.

Jason draws from his experience in continuous improvement and packaging at Kellogg’s highly automated production facility, and in R&D, manufacturing and quality at Magna International. He graduated with a BSc (Hons) with a Management Sciences option from the University of Waterloo.