Ensuring a supply chain is responsive, agile and adaptable is vital for packaging suppliers operating in today’s disrupted global economy. Christiana Delahaye, IPL Packaging Senior Purchasing Manager Europe, advises on protocols and pitfalls in establishing new procurement options.
“Firstly, our approach to manufacturing operations ties-in with the concept that the next generation supply chains are, in fact, not chains at all,” says Delahaye. “Rather we see a fluid and dynamic network of equal partners, coalescing around the customer’s needs,” she says. “It’s an ecosystem that facilitates the forging of new relationships to innovate and deliver new products and services to the market rapidly; and then monitor and iterate as necessary to hone design, production, delivery and service for an optimal customer experience.”
“Whilst our Chinese manufacturing operations and supply base (with their deep-rooted expertise) will continue to remain key to our ability to produce quality products on time and in budget; having a network of strategically positioned suppliers is a real advantage and something we’re consistently exploring in order to improve efficiency and enhance our responsiveness to our clients.”
One of my core focus areas is analysing Easter European supply and below are broad areas I view as important:
Background factors to consider:
- History and tradition play an important role when it comes to considering the suitability of potential supply sources in European markets. Some countries boast centuries-long traditions in the high-end production of specific mediums and materials: i.e glass in Poland & Czech Republic, printing in Bulgaria, woodcarving and crafts in the Balkan countries. A long-established track record at any given facility generally provides a solid indication of reliability and quality.
- Ultimately, it goes back to a simple question: What is the region’s/supplier’s core area of expertise and how does this tie in with clients’ needs and requirements?
- It’s also important to analyse any country-specific trends, policies and investments in given sectors. These could involve increased investment in state-of-the-art papermaking, prototyping and printing facilities or production facilities, or in those facilities that produce other quality packaging materials such as MDF, wood and rigid board. Trend analysis is a good indicator of longer-term manufacturing sustainability.
- Similarly, of course, it’s always worthwhile to investigate if a potential partner has invested in new machinery and/ or new technologies, updated existing equipment or engaged in training or upskilling of personnel.
Analysing and Qualifying suppliers:
- After establishing and implementing various background checks there are several significant factors that come into play when testing a supplier’s suitability as a potential ‘partner’. Extensive audit checklists will determine an “audit score” based on a variety of factors and only suppliers achieving the minimum required will then be considered for the next phase.
- Sampling, of course, becomes an integral part of the selection process. White samples, for example, typically form a crucial part of the initial validation process. This should be followed by fully printed sample series of a few hundred/s to validate the production process and to ensure the development phase isable to be accomplished under real-life industrial conditions.
- The best place to start once a supplier is qualified is with small volume POs that test their capabilities, responsiveness and motivation and are based on low-risk outcomes. Providing a supplier with a project well suited to their expertise and knowledge is also key.
- Analysing the supplier’s quality control process is paramount. At IPL we generally use third party verification such as SGS in addition to our own QC staff. In this regard, clarifying expected and acceptable production and quality parameters with the supplier upfront is imperative.
- Of course, it goes without saying that establishing commercial competitiveness is vital before embarking on the above processes. In considering the commercial viability of the supplier, one must study upfront the labor and overhead costs, which vary greatly in different markets and can greatly influence potential manufacturing costs.
- The world may be shrinking when it comes to digital connectivity and the ability to communicate globally but, ultimately, distance remains a challenge when it comes to analysing and sourcing suppliers.
- Not having a presence on-site sometimes makes it harder to evaluate a potential supplier and remain fully ‘in the loop’ when dealing with different geographical markets. It is therefore important that, from the very outset of the collaboration, your business goals are well communicated and well matched. The ideal objective is to conduct onsite inspections before the process is commenced and, ultimately, having feet on the ground during production is best practice.
- One of the biggest challenges is to find the ‘right’ supplier who is truly keen to progress as a solid partnership such that, should any issues arise, they are motivated to find solutions, share responsibility and communicate effectively. A factory that is highly qualified but demonstrates a poor attitude is not a good fit!
- In exploring new markets, language and cultural barriers can often present real challenges in terms of interaction between supplier and manufacturer. These barriers can lead to opportunities missed or misinterpreted and so an ability to speak several European languages other than English is a key advantage. From an IPL perspective, it’s vital that the potential supplier is able to communicate fairly well in written English.
- Professionally qualified suppliers will generally already have existing customer commitments. It’s therefore important to be aware of spare factory capacity as well as peak seasons in a supplier’s production schedule over which one may have less control.
- Identify the opportunities and risks posed by global environmental and social trends (i.e. sustainability, reducing carbon footprint, elimination of single-use plastic and the move towards increased safety measures in light of the global pandemic) and take these into consideration when making sourcing decisions. These are increasingly important to the consumer.
- It is also important to communicate the subtleties, practices and procedures relating to various client industries upfront to the supplier so that there is no misunderstanding further down the line.
- Pilot programmes provide a good way to establish trust and build a base for bigger and broader partnership initiatives. Eastern European suppliers are generally content, once trust has been established, to work on small series high-end production runs that involves considerable engineering and a well-considered, thought-out different approach, as well as of course the bigger production runs too.
- The proximity and ease of transport (via rail and sea) in European markets mustn’t be overlooked. The prospect of shortened delivery times is undoubtedly a big positive in dealing with these markets. Taking logistics into account will help in the development of a strategically based network of supply.
- Finally, continually reviewing existing production facilities and investigating opportunities with well-tested current suppliers is vital to addressing needs around budget, materials, transportation etc. and developing new innovative approaches.
- Finding and creating opportunity means not relying solely on suppliers to be at the forefront of technology and sustainable strategy! Continue to research key areas independently and, where necessary, share information and work with ‘partner suppliers’ to innovate together.
In conclusion, at IPL we are continually looking to identify and explore new markets through strategic sourcing initiatives. Whilst we are very proud of the supply chain we currently have in place; continual evaluation will only enhance our ability as a global packaging supplier to respond rapidly to procuring and developing products in this fast changing world.