Demand for turnkey packaging services said to be increasing

John Kalkowski -- Packaging Digest, 9/5/2012 10:26:53 AM

American manufacturing businesses are increasingly outsourcing their entire packaging needs, relying on full-service, turnkey solutions as a means to remain commercially viable in increasingly competitive world markets.

Based on annual reports shared by Assemblies Unlimited (http://www.assemblies.com) outsourcing packaging needs in 2012 has become a primary way that many smaller businesses are staying fiscally solvent and consumer focused.

"We have seen a marked increase in the number of domestic manufacturers seeking a full turnkey packaging solution in 2012," stated Randy Shaw, owner and CEO of Assemblies Unlimited in bloomington, IL.  "It suggests a general shift in the underlying philosophies driving market viability and profitability for these businesses. A decade ago, we saw businesses trying to handle many facets of packaging in-house: but the inherent costs of staying on the leading edge of packaging changed the way most businesses approach it. They needed a way to maintain levels of quality without driving up costs, and outsourcing provided one smart and simple answer. In 2012, more businesses are taking advantage of this as they means to remain competitive."

 

Shaw states that by using a turnkey packaging solution, a business is better able to stay focused on their core competencies and therefore, improve their products, supporting services and profitability.

 

"Traditionally and historically, companies typically outsourced only the labor portion of their project, while internally managing the planning and scheduling of the supply chain. When offered complete project management services by a contract packaging partner able to manage not only the labor portion but also handles the sourcing and planning of raw components from beginning to end, the efficiencies are easily realized through the cost effectiveness in local sourcing of raw materials, reduced freight costs, and the forging of key vendor relationships.

 

"Five years ago, we saw many businesses seeking the cheaper solutions offered overseas," Shaw says, "but the quality levels and issues involved with shipping are making these businesses come back to US providers - especially as competition for consumers increases. These business owners are reporting back to us that any cost savings they found by going overseas was simply absorbed by issues involved with overseas packaging or shipping products around the world. In bringing packaging services to a US partner, they are decreasing time-to-market and maintaining crucial quality levels. These issues have a direct effect on profitability, which is why more businesses in 2012 are turning to full-service partnerships with credentialed packaging providers."