The packaging industry is often cited as the first sector to reactivate in crisis recovery, as it responds to stimuli from sectors closer to the end customer. However, this distance from the final consumer generates a series of challenges for the sector, such as lack of demand visibility, bullwhip effect and greater risks of product obsolescence. Collaborative integrations with the client are a way to mitigate the effects of this scenario, but partnerships of this level are still rare to observe in the national panorama.
Figure 1 – Different examples of plastic, aluminum and paper packaging
Given this not very favorable positioning, it is common to see packaging companies with a level of inventories far above the ideal. This fact by itself is already quite negative, as I already commented in my last post, however in some cases this situation can be even more aggravated due to the obsolescence of the materials in question. Some packaging companies have a large portion of their revenue tied up in custom designs, such as aluminum cans and perfume bottles.one shot”, that is, with sale limited to a specific period. A poorly performed forecast in projects of this style can result in oversized inventories that are not handled by the customer, with no other way out than to discard them.
Another common problem in the sector is the difficulty of planning materials, especially in companies with a high number of customized products in their portfolio. This difficulty stems from the fact that usually the lead time for delivery of final packages to be less than the deadline lead time of supplying most of the materials, making business models with purchases 100% linked to orders impossible. Adding this problem to the already mentioned lack of visibility of demand, we have a scenario of ordering raw materials with a high degree of inaccuracy.
And does your company have a large volume of packaging purchases? An integration with this supplier can be beneficial for all links in the chain.
