Addressing Concerns and Adapting to Change
The pandemic significantly impacted the packaging supply chain, causing disruptions and driving new purchasing behaviors. Today, as the situation has improved, it is essential for businesses to understand the changes that have occurred and how they can adapt accordingly.
We recently sat down with Richard Brown, President of The BoxMaker, as well as Kristi Duvall, Vice President of Sales, to discuss the major constraints affecting the packaging supply chain at the height of the pandemic, how those constraints have evolved, and how The BoxMaker is addressing current concerns to help our clients and prospects navigate the post-pandemic landscape.
The Pandemic's Impact on the Packaging Supply Chain
During the pandemic, the packaging supply chain faced several constraints, including extended lead times, material unavailability across a variety of substrates, and a spike in demand that outpaced capacity as businesses pivoted to e-commerce. These constraints were driven by factors such as production and logistics workers being out due to COVID-19, labor and equipment shortages, and in the case of corrugated packaging, disruptions to local board supply.
In response, we saw brands seeking alternatives to unavailable materials and accelerating purchases, either to hold at the supplier or in their own warehouse or rented space. For many companies this resulted in overbuying in an attempt to maintain some ability to respond to further supply chain disruptions.
The Post-Pandemic Landscape: What Has Changed?
Today, the situation has improved as COVID-19 no longer disrupts the production and logistics workforce as it once did. According to Richard Brown, “Many suppliers have taken steps to minimize risk in the supply chain, such as diversifying manufacturing sites and approving alternative materials. For example, HP now manufactures C500 inks in multiple sites across more than one geography. At The BoxMaker, we approved alternatives to popular materials produced in limited geographic areas or sites to improve our ability to fulfill client orders in a timely fashion.”
However, inflation has become a concern, affecting clients' purchasing decisions. Krisi Duvall says, “Clients are more price sensitive and inflation is affecting their desire to purchase in higher quantities to lower ‘per each’ prices.”
Addressing Clients' Current Concerns
Today, businesses are primarily concerned about lead times, quality, and costs. At The BoxMaker, we've addressed these issues by making operational improvements and advising clients that they don't have to buy large quantities.
Kristi says, “Excessively high-volume orders run the risk of obsolescence. Additionally, the carrying costs associated with purchasing in bulk limit cash flow. This can be particularly difficult for businesses to bear during an economic downturn.”
Advice for Clients and Prospects
Instead of buying in bulk and stockpiling supply, both Kristi and Richard recommend brands work with their supplier partners to develop an open dialog around challenges, potential hurdles, and all available solutions.
To navigate the post-pandemic packaging supply chain, we recommend:
- Understanding what steps your suppliers have taken to reduce supply risks.
- Focus on reducing risks, including packaging obsolescence and high carrying costs.
- Scheduling business reviews with current suppliers to set expectations and strengthen relationships.
- Attending in-person or virtual tours of current and prospective suppliers' operations.
- Sharing your vision of success for the next 6-12 months and working closely with suppliers to create and execute a plan, including setting targets and milestones, and maintaining regular communication.
In conclusion, navigating the post-pandemic packaging supply chain doesn't have to be daunting. By staying informed, proactive, and collaborative, your business can overcome the challenges and thrive in this new landscape.
Get Started with The BoxMaker
If you're looking for a packaging partner committed to addressing your concerns and supporting your long-term success, contact The BoxMaker today. Our team of experts is ready to help you develop customized packaging solutions tailored to your unique needs. Contact us now to schedule a consultation or a facility tour, and let's start building a resilient and efficient packaging supply chain together.