A natural extension of manufacturing is packaging of the final product. Packaging provides a considerable value addition to the product by adding aesthetic appeal, functional protection and informative messages to the customer. Packaging is the face of the product that creates brand value, the ability of the customer to recall the product.
In a traditional manufacturing business, packaging plays three different roles. In consumer industries, the way a product is packaged adds aesthetic appeal for the customers. For instance, the soap industry depends very much on the packaging characteristics that help customers to remember the product. The color and design of the package helps sway the impulsive purchasing decisions of the customer. Functional protection is important in industries that package products that are prone to decay. Thirdly, packaging provides valuable information such as contents, date of manufacture, expiration date of the product and any other instructional information.
As with any outsourcing activity, businesses are increasingly turning to third-party vendors for their packaging solutions. This is made necessary by various factors. A business may find logistics solutions in contracting out packaging, when it makes sense to transport products in bulk and then package them in small quantities, nearer to the customers’ location. Businesses may come with new product lines for which there may not be a packaging solution in the short term.
Contract packaging is done by industries such as pharmaceutical, beauty care products and electronics. Depending upon the needs, contract packagers provide cost-effective, quick and efficient service. It is important to choose the right kind of packager, as it has a direct effect on the customer and therefore, the bottom line of the business. Certainly, in the pharmaceutical industry, where unethical practices result in disaster to the business as well as the customer, it is important to associate with packagers who have good manufacturing practices.
The management of supply chain relationships is a high-priority area for businesses, and contract packaging is no exception.
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