The global packaging market is rapidly expanding, expected to reach $975 billion this year, with sales concentrated in Asia.* Manufacturing products overseas can help you meet customer demand and reduce per-unit costs, but it can also put your product quality, customer experience, brand and profitability at risk. To avoid this, consider these guidelines from our experts.
1. BE SURE TO GET THE PRODUCTS YOU PAY FOR
When you’re manufacturing overseas, you could be dealing with an unknown market and a lack of price transparency, making you vulnerable to surprises. One way around this is to partner with a packaging company that has an international presence and knows the market—one that can leverage economy of scale and negotiate the best market price with suppliers.“A company with international presence can visit the factory, oversee manufacturing, work directly with multiple suppliers, take photos, and give updates, so you don’t need that late-night conference call or worse, take that last-minute flight to China to get the answers you need,” says Josh Larson, Global Business Manager with Veritiv. “This will help you increase your speed to market and better manage your costs.”
2. MONITOR MATERIALS TO PREVENT DAMAGE
Once you start negotiating with suppliers in another country, you might discover new challenges. One of these might be learning that materials determined in the development phase are being replaced with lower quality substrates during the production phase. “Ensuring your substrates are properly specified for global production, and not substituted for cheaper options, is critical,” says Bin Jiang, Director of International Packaging Operations with Veritiv.
Using lower quality substrates can lead to significant product damage, a high customer return rate and, ultimately, loss of brand value. Product damage can drive freight and warehouse inefficiencies. In addition, customer service labor and warehouse fulfillment re-sources may need to work overtime to resolve issues. Add up the costs, including product replacement, and the value of protecting your product through strategic packaging becomes clear.
To prevent this, you can put measures in place to continuously monitor and evaluate the materials in your packaging. This will help minimize and resolve issues before they affect your profitability. You can also outsource packaging material management to a partner who can ensure that the materials you agreed on in the development phase will be the same materials that make it to the production phase. This will help ensure your packaging performs in the transcontinental shipping environment.
3. PERFORM RIGOROUS TESTING TO ENSURE SUCCESS
Considering the international travel plans of your product—from truck to ship to warehouse—you’ll want to enlist the help of a testing facility that puts your product through rigorous testing. Shaking, vibrating and even slightly crushing your package all help identify the need for design improvements. These can ensure that your package will perform even under the most arduous conditions. Climate is also critical to determining materials. High humidity, for instance, can affect corrugate strength.
4. MONITOR QUALITY 24/7
To make sure your package performs, keep a quality engineer on the factory floor. At the very least, you will need a trusted partner to perform critical inspections, such as First Article Inspection and Certificate of Conformance. Make sure you have a physical presence at the factory. You can set the stage for quality by choosing the right suppliers, training those suppliers on your brand criteria and specifications, and ensuring that quality inspection is based on your company’s specific needs. This approach can help prevent issues that could impact your bottom line.
5. STRIVE FOR BRAND CONSISTENCY AND CUSTOMER LOYALTY
Manufacturing overseas sometimes requires production at multiple locations, which can lead to major inconsistencies that could negatively impact your brand.
“The contract manufacturers and suppliers you’re working with overseas often are not design or packaging experts,” says Jiang. “When you have a brand to protect, you need a packaging design expert who can provide guidance to the manufacturer to ensure brand color and graphics are consistent throughout production.”
6. CHOOSE A PARTNER WHO HAS GLOBAL SUPPLY CHAIN KNOWLEDGE
Finally, when evaluating an international packaging partner, find one that’s an expert at moving your package across the globe. “It’s important to have a partner who’s familiar with all the import/export trade compliance policies for each country and the duties that need to be paid. They should have advanced knowledge of the material regulations, including the potential fines for not using environmentally friendly materials in Europe,” says Jiang.
Following these six tips is just one step towards improving your overseas packaging and end–user customer experience. “Packaging is so much more than ‘just packaging,’” says Larson. “So many questions need to be asked, such as, ‘how can we design to further reduce cost? How much more efficient can we make it for shipping? How can we reduce product damage? How can we improve the customer experience? And how can this package increase both sales and sustainability.’ ”
Indeed, no matter where manufacturing takes place, packaging needs to be more than just a process. It needs to be a strategic design.
Packaging Unwrapped magazine
Today’s innovative businesses demand more from their packaging. Veritiv’s Packaging Unwrapped magazine shines light on new trends and developments to help companies do more. Read the latest edition here.
*Global packaging market to reach $975 billion by 2018. Packaging Strategies. January, 2014.