The global pandemic has led to a shortage of many things and surprisingly to many, packaging material is one of them. Most would laugh this off, however, it's an embarrassing position to be informing a business that we have run out of pallets due to the pandemic and all the other reasons for shortages.
“Shortages of packaging materials such as pallets, plastics, corrugate, metal and glass are wreaking havoc across supply chains, and it remains unclear when – or if – these constraints will subside,” said John Blake, senior director analyst with the Gartner Supply Chain practice.
Gartner recommends a three-pronged approach to reducing supply chain risks in packaging:
1) Collaborate with suppliers : Work with your suppliers to understand the root-cause of the supply constraints, this will help to develop alternative solutions, such as subsitution of materials, favourable commercial terms or changing shipment lot sizes.
2) Centralise all raw material procurement: Sounds simple right? A large number of packaging companies work collectively in the packaging eco-system and are solely driven by volumes, so if you are identified as a large volume consumer of packaging material of all sorts, this can help negotiate better commitments from the vendors.
3) Segmentation within category: Some packaging material is more sensitive as it is in direct contact with the end product, those packaging materials take longer to manufacture to ensure the integrity of the end product throughout its shelf-life. While other packaging is less sensitive and can be sourced from a larger number of vendors such as pallets and cardboard boxes. Therefore, it's critical to segment your range and optimise with scale.
The article below provides more detailed content on how to develop a strategy to overcome packaging shortages in a strategic manner. Click here to find out more.
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