Supplier Collaboration

Supplier Collaboration In Designing Packaging Requirements

Designing and defining packaging requirements is a difficult task for most companies who purchase packaged components. Competing forces such as lot size, consumption frequency, logistics utilization, ergonomics, and especially piece price can make it challenging to determine the correct packaging. We often observe one of two approaches to this situation:

Piece Price

The most common approach we see is with companies who focus on piece price and logistics utilization. This approach generally yields large, bulk packagingSupplier-Collaboration for larger lot size components and densely packed parts in corrugated containers for smaller lot size components. While piece price and logistics utilization are usually favorable with these packaging choices, ergonomics and point-of-use presentation are extremely unfavorable. Bulk containers are difficult for operators to pick from and require significant line-side space. Corrugated containers create material waste and periodic work for the operators in un-packaging the components.

Point of Use Presentation

Another approach we observe in the industry places a focus on point-of-use presentation and reduction of periodic work for the operators. This usually results in handheld totes of smaller container quantities. While this option is great for assembly efficiency, it often results in significantly higher piece prices and substantial investment in returnable container fleets.

The Solution

The best approach is a middle ground between the two aforementioned approaches. In order to be truly effective in package design, however, there must be supplier collaboration between all stakeholders. The stakeholder most often forgotten is the supplier. Supplier collaboration stimulates solutions that satisfy the purchaser’s point-of-use and logistics efficiency needs while aligning with the supplier’s manufacturing needs and simultaneously satisfying the purchaser’s piece price requirements. Supplier collaboration also creates an environment where both buyer and seller can help each other find efficiencies that result in a better situation for each party. In prime examples I’ve seen, collaboration with the supplier has gone so far that the purchasing company staffs engineers on-site with the supplier to help gain manufacturing efficiencies tailored towards producing and packaging products that meet the purchaser’s requirements.

Most companies have learned that beating up suppliers for marginal piece price savings creates inefficiencies in other areas. Even so, many companies are not sure how to take the first step towards true supplier collaboration. The approach that seems to work best is having both parties participate in a gemba walk at each other’s facilities. Actually being at the gemba helps to reinforce the requirements and constraints of packaging design because each party can see and understand the reasons why. The power of welcoming your business partner into your doors can’t be overstated either. True supplier collaboration occurs with trust and trust comes from effective communication.

Written by Kelcy Monday, Supply Chain Engineering Team Lead at LeanCor

 

 

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Posted by LeanCor Supply Chain Group

LeanCor Supply Chain Group is a trusted supply chain partner that specializes in lean principles to deliver operational improvement. LeanCor’s three integrated divisions – LeanCor Training and Education, LeanCor Consulting, and LeanCor Logistics – help organizations eliminate waste, drive down costs, and build a culture of continuous improvement.

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