Step-by-Step Guide to Packaging Procurement Strategy

Due to economic pressures along with domestic and global competition, businesses are searching for opportunities to reduce costs and be efficient. A good packaging procurement strategy will help you achieve both of these objectives. This guide will provide a look at how to develop a packaging procurement strategy that will improve operational efficiency and lower costs, while also aiding with product development.

What is Procurement Packaging?

Packaging procurement involves the procurement or sourcing of packaging materials and packaging services to meet a business's needs. Packaging procurement is more than simply buying boxes or wrapping; it encompasses factors such as functionality, cost, and sustainability of the packaging material.

Packaging is also a significant factor in product protection, shipping compliance, visibility for the brand, and overall consumer experience. The packaging procurement strategy aims to identify the requirements for packaging specific to your products and then determine the best material and supplier fit to achieve the same at the best price.

Step 1. Assess Packaging Needs & Budget

The first step in any packaging procurement strategy is to assess your packaging requirements. To this end, take a moment to evaluate the products that you sell, including their size, fragility, and any special handling considerations.

For example, are they susceptible to temperature changes or anything like moisture? Do they require packaging protection or is the product robust enough to be shipped using simpler packaging options? These considerations will dictate which packaging materials are suitable for your products.

After evaluating your packaging requirements, you'll want to review your budget. You should keep in mind that controlling costs is important for packaging, but the ultimate goal is not only to reduce costs, but also to ensure that your packaging clearly protects your products, properly reflects your brand, and enables effective logistics. Plan your budget accordingly by estimating both the direct costs of packaging (materials, labor) and the indirect costs (shipping, storage).

Step 2. Choose Suitable Packaging Materials

Selecting the appropriate packaging materials is important in providing the protection to your products, while also being cost effective. The selected material will be determined by the product itself and shipping. Here are some options:

• Cardboard Boxes: Suitable for many products, including electronics, apparel, etc. You can select corrugated mailing boxes or single-wall cardboard boxes, depending on product weight.
  
  

• Bubble Mailers: Great for small, fragile items, like jewelry or electronics. Bubble mailers in bulk are lightweight and protective, making them perfect for shipping small products.
  
  

• Poly Mailers: Good for lightweight, non-fragile products like clothing or promotional materials. Poly mailers are cost efficient, waterproof, and durable, so they provide dependable protection during shipping, regardless of the products.

Determine packaging materials that are within your budget and that you are satisfied with quality. If sustainability is part of your brand's philosophy, then you may want to consider eco-friendly packaging materials.

Step 3. Test and Evaluate Packaging Options

Evaluating and testing your packaging alternatives is a critical approach to guarantee the safe delivery of your products to the customer. It is a great idea to test packaging materials to see how they respond to stress, weight, and impact.

For instance, with fragile items, observe drop tests to confirm that the packaging protects the product adequately in shipping.

If you are environmentally concerned about packaging alternatives, it is crucial to evaluate the environmental risks associated with your packaging alternatives, if possible. Determine whether your packaging is recyclable, biodegradable, or reusable.

Step 4. Research Packaging Suppliers

Once you have decided on the materials, you will need to research reputable suppliers that deliver packaging that meets your requirements. The best suppliers will have a history of providing quality materials on time. Additionally, you always want suppliers that can grow with your business in a way that signifies adaptations in your needs.

Supplier selection will involve considerations related to lead time, pricing, minimum order sizes, and providing custom solutions. Building a strong relationship with your suppliers will help to ensure high quality supplies at the best prices delivered on a reliable schedule.

Step 5. Negotiate with Suppliers

If you want to make the supplier your best ally, negotiating is an essential step to ensure you get the best possible price. If you're ordering packaging in large quantities, there might be opportunities to score some discounts, even. Think about negotiating on payment terms or locking in a longer contract to keep pricing fixed.

Let the suppliers know your specific packaging needs so that they can begin offering you more tailored options, such as specialty boxes or packaging with protective features. Also, you could save a lot of money in the long run by developing your negotiation skills.

Step 6. Streamline Packaging Process

Another way to save on packaging costs is to improve upon and simplify your packaging workflow. First, take a look at how you are currently packaging. Do you have bottlenecks in packing, not labelling, or even while in storage? Does your staff require any training, or might they benefit from additional training about your upcoming packaging practices? 

Secondly, you can reduce labor costs by automating some processes, especially on parts of the operation where boxes are assembled or getting labelled. It might be worth your time to streamline the packing steps themselves so that your operation takes less time, for example, pre-packing some items so that assembly would take less time, or trying to use packaging that requires less sealing and taping than other options.

Having a well-organized workflow and developing standard operating procedures (SOPs) can prevent errors and save time during critical packaging time.

Step 7. Monitor and Review Packaging Performance

After you develop and implement your packaging procurement strategy, you should keep track of the metrics and evaluate your packaging performance on an ongoing basis. Use your records to track packaging costs, product damage, customer feedback, and delivery times. Evaluating these metrics will determine if the packaging is doing the job you expected, and if you have an opportunity to improve.

For example, if you see there is increased product damage in transit, it is time to reconsider the type of materials you are using or to change the way you package the products. Likewise, if you determine your packaging is lacking in meeting customer expectations, e.g., presentation or branding, you may want to investigate custom packaging options.

Considering packaging performance on an ongoing basis will help you adjust for potential improvements in customer satisfaction and operational efficiency.

FAQs

What packaging material is best for shipping fragile items?

Customers commonly use bubble mailers to ship fragile items like electronics and glassware. Because bubble mailers contain padded material, they provide much-needed cushioning protection, reducing the risk of breakage in transit.

Can I use the same packaging for all my products?

While many may choose to use the same packaging for all products, it is important to consider recycled variation according to an item’s specific needs. For example, fragile products need additional packaging protection compared to lightweight products that do not require as much protection.

How can I reduce packaging costs without compromising quality?

Packaging costs can be reduced by purchasing packaging materials in bulk or multiple orders. Alternatively, businesses can compare suppliers and negotiate orders, use lighter weight packaging materials, and improve their packaging by streamlining the overall packaging process (time and labor costs).

What should I look for in a packaging supplier?

A packaging supplier with materials that are high quality, reliable and timely delivery, reasonable pricing, and custom solutions are ideal. Ideally, a supplier understands your long-term goals and is willing to partner with you to help grow your business.

Conclusion

Having a thorough and well-organized packaging procurement strategy in place is paramount for an organization to be successful. Having an understanding of your specific packaging requirements, selecting materials, testing alternatives, and working with reputable suppliers will help reduce costs, improve operational efficiencies, and still maintain a strong level of product protection and customer satisfaction. Regular monitoring and adjusting your packaging strategy will provide a continued advantage in an ever-changing environment.