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Thursday, May 23, 2024

Third party outsourcing

Commissioning external experts can deliver genuine value in a changing world, writes Rodney Steel

It’s difficult to guarantee anything these days. However, the one thing we can all be certain of is change. From the daily fluctuations in our political landscape and the unknowns of Brexit, to keeping up with the latest technological advancements and demands for sustainability, businesses must and are continuing to adapt. Flexibility is therefore key, and it is here that outsourcing to contract manufacturing and contract packing organisations can deliver real benefit to companies; providing the support that ensures change becomes an opportunity and not a threat.

The growth in e-commerce & start-ups

One example is the huge growth in e-commerce over recent years. Online businesses have fundamentally altered the way we shop today. Consumers have 24/7 access to an ever-increasing number of traditional and online products, with goods fulfilled, despatched and delivered next day direct to our homes. This easier access to the end-consumer, and for the retail sector the removal of the need for a physical presence on the high street, has encouraged many new entrants into the market.
The launch of any new product or business, however, brings with it several challenges. And while this new generation of entrepreneurs may have the ideas and inspiration, what they often lack is the practical experience of how to turn these projects into finished products, suitably packaged and delivered to their customers. Contract manufacturers and contract packers are ideally placed to provide a range of services. From formulation to manufacturing, new product development, filling, blending and general contract packing, collation and rework to a comprehensive offering that covers the design and development of the pack. All these activities allow customers to source a one-stop service that takes a brand from concept to the consumer and provides multiple benefits for all parties. The support lent to these new brands is not simply limited to the production of their physical products. Outsourcing companies often have specialist knowledge and experience of sectors which enables them to offer wider advice, such as helping to ensure that any necessary product compliance, labelling regulations or legislation requirements are met within a safe working environment. Indeed, around 20 per cent of enquiries received by the BCMPA each month are from newly established companies and this figure is anticipated to grow. It was for this reason that a ‘Tips for Start-ups’ page was established on the website, providing guidance for new companies to understand the benefits of outsourcing and more easily identify appropriate solutions for their manufacturing, packing, fulfilment and logistics requirements.

Helping businesses small and large
While outsourcing is ideal for start-up businesses, feedback from the BCMPA membership underlines how the focus on continual innovation and new product development is equally vital to established organisations.
Many companies, for example, are now more open to outsource support for their product development process to help accelerate product launches. Often this can involve the setting up of spinouts and accelerator groups, who then utilise an external resource for additional support.
A particular benefit of an outsourcing partner is its ability to handle shorter production runs often associated with initial launch volumes. This can appeal to more established businesses who are seeking to maximise new product opportunities and respond to the latest trends in a fast-changing market. Personalisation is becoming a noticeable trend as consumers seek products that are tailored to their individual needs. This adds further complexity to the development and supply of products, while the greater variety leads to shorter production runs. Outsourcing companies can provide the flexibility to help deal with these challenges, with the manufacture and packing of niche or temporary product lines, assisting in new product development and manufacture, producing promotional packs and managing logistical operations.

The demand for sustainability
One trend that is affecting all businesses, has been the growing focus on sustainability, both in terms of the manufacturing and transport of products and more specifically their packaging. Consumers are now questioning what can be done to make positive changes, and BCMPA members are able to work with clients to devise appropriate solutions, with new pack formats, more recyclable packaging or alternatives to plastic.

Brexit means…?
While the demands for sustainability are clear, the same cannot be said for Brexit, with uncertainties continuing to cast a shadow across all sectors. The biggest challenge remains the unknown and outsourcing companies have worked hard over the last 3 years to ensure they are prepared. From greater stock holding and management of supply chains to providing more warehouse space, the flexibility of the sector is ensuring it can meet the demands of its clients. Depending on the outcome, Brexit may present contract manufacturers with an opportunity if customers find sourcing materials from outside the UK more difficult. It is here that the flexibility and responsiveness of the outsourcing sector will be a real benefit, helping meet this requirement and enabling clients to successfully navigate their way through Brexit whatever the eventual outcome.
The benefits of this ‘localised support’ are not a new phenomenon. In recent years, there have been some companies which have been tempted to seek outsourcing solutions overseas, lured mainly by the perceived cost-savings. However, such a decision is often a huge risk for two of the most important factors for success in many sectors – quality and speed. There are often stories of businesses experiencing an overly long wait for goods, only to find at the last minute that many are of sub-standard, with no time for any redress. The knowledge, expertise and commitment to quality of UK-based contract manufacturers and packers provides welcome peace of mind when companies take the decision to outsource.

Simplifying complexity
Outsourcing reduces the complexity of operations for many businesses – considerations such as extra staff requirements, space constraints and managing production schedules to accommodate increased workloads can be offloaded to an external expert. Companies are then able to concentrate their energies and resources on their core business.
The talent and capabilities are right here, with today’s contract manufacturers, packers and logistics firms providing the necessary skills, knowledge and capabilities to ensure customers maximise their potential business opportunities in an ever-changing world.

Rodney STEEL, Chief Executive. BCMPA
Rodney has been Chief Executive of the BCMPA since 2003. He’d previously spent several decades in the print and packaging industries including running a successful contract filling business in the chemical sector

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