This document discusses contract packaging strategies for managing peak seasonal demand. It identifies several pain points that can occur during peak seasons, such as maintaining inventory levels and meeting short-term demand spikes. The document provides examples of companies that have successfully adapted their contract packaging strategies for events like the Olympics, World Cup, and Christmas. It emphasizes the importance of learning demand patterns, planning packaging needs, engaging suppliers, and being willing to adapt packaging strategies in order to meet seasonal demand variability.

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3. Ishpreet Virdi
Senior Research Analyst
Beroe Inc.
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India
Munnangi Abhiraj Lead Analyst Beroe Inc. Dialing in from: India
Speakers
Panel for the Webinar
Sharan Ramesh
Engagement Manager
Beroe Inc.
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Moderator
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•Case Examples
Integration of Contract Packaging Services into Packaging Strategies
Pain Points during Peak Season Demand
Situational Importance of Contract Packaging

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Packaged FMCG/CPG product for sale
Primary Packaged Product
Warehouse/Distribution & Fulfillment
Retail Shop
Packaging Material
Secondary Packaging Unit
Customized Packaging Unit
DID YOU KNOW?
Billion Dollar Spend

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13%
22%
11%
North America
Vancouver Olympics 2010
FIFA World Cup 2010
South Africa
China
Beijing Olympics 2008

8. 38000
42000
46000
50000
54000
58000
62000
Aug-09
Sep-09
Oct-09
Nov-09
Dec-09
Jan- 2010
Feb- 2010
Mar-2010
Apr-2010
May-2010
Jun-2010
Jul-2010
Aug-2010
Christmas Spurt
Soccer Wave
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South African Retail Sales Statistics:

9. •Event Examples: Known Demand Conditions with standard packaging requirements. For example- Gift sets, or prestige promotional items
•Markets: Established markets . Not prone to seasonal demand spikes.
•Event Examples: Market entry into areas such as Brazil, China, India.
•Markets: Nascent Markets or Market entry conditions with demand uncertainty.
•Event Examples: Christmas, New years, Festivals/Sports with or weather related events with customized packaging requirements. Peak Seasons
•Markets: Customized markets with customer centric approach and demand variability.
Service Customization
High
Low
Non-Critical Categories
Strategic Category
•Event Examples: Product value chain falls under core competency with dynamic packaging. For examples- Diapers for a CPG company.
•Markets: Established markets. Demand dictated by end use industry.
Leverage Category
Bottleneck Category
Long
Short
Service Lead Times
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Contract packaging Necessity:
Contract packaging Necessity:
Contract packaging Necessity:
Contract packaging Necessity:

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Package Design
Component / Materials Sourcing
Material Handling
Process/ Packaging
Warehousing
Shipping/ Logistics
Cost and Quality Concerns
•Quality and Cost -
•Melding service costs to final product cost.
•Maintaining internal quality levels when using contract packaging.

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Package Design
Component / Materials Sourcing
Material Handling
Process/ Packaging
Warehousing
Shipping/ Logistics
Maintaining Inventory Levels and lead times
•Quality and Cost -
•Melding service costs to final product cost.
•Maintaining internal quality levels when using contract packaging.
Maintaining Inventory Levels and lead times
•Matching Inventory levels with Demand.
•Meeting short run demands or demand spurts.
•Managing Seasonal Demand needing customized packaging

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Package Design
Component / Materials Sourcing
Material Handling
Process/ Packaging
Warehousing
Shipping/ Logistics
Seasonal barriers and road congestion
•Maintaining road freight services
•Infrastructure
•Tighter time frame
•London Olympics Data (2012):
• 11 million visitors were expected
• Congestion was expected to increase by 30%
•Journeys through London were expected to take 20% longer on an average

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Package Design
Component / Materials Sourcing
Material Handling
Process/ Packaging
Warehousing
Shipping/ Logistics
•Quality and Cost -
•Melding service costs to final product cost.
•Maintaining internal quality levels when using contract packaging.
Labor Issues
Maintaining Inventory Levels and lead times
•Matching Inventory levels with Demand.
•Meeting short run demands or demand spurts.
•Managing Seasonal Demand needing customized packaging
Labor conditions
Availability of skilled labor
Poor staffing

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Package Design
Component / Materials Sourcing
Material Handling
Process/ Packaging
Warehousing
Shipping/ Logistics
Increased SKUs
•Quality and Cost -
•Melding service costs to final product cost.
•Maintaining internal quality levels when using contract packaging.
Maintaining Inventory Levels and lead times
•Matching Inventory levels with Demand.
•Meeting short run demands or demand spurts.
•Managing Seasonal Demand needing customized packaging
Labor conditions
Availability of skilled labor
Poor staffing
•Specially during major events like festivals and sports
•Difficult to maintain balance – between increased SKUs and one’s infrastructure

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Package Design
Component / Materials Sourcing
Material Handling
Process/ Packaging
Warehousing
Shipping/ Logistics
Lack of Transparency
•Quality and Cost -
•Melding service costs to final product cost.
•Maintaining internal quality levels when using contract packaging.
Maintaining Inventory Levels and lead times
•Matching Inventory levels with Demand.
•Meeting short run demands or demand spurts.
•Managing Seasonal Demand needing customized packaging
Labor conditions
Availability of skilled labor
Poor staffing
•Specially during major events like festivals and sports
•Difficult to maintain balance – between increased SKUs and one’s infrastructure
Communication:
•Demand forecasts
•Capabilities

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Package Design
Component / Materials Sourcing
Material Handling
Process/ Packaging
Warehousing
Shipping/ Logistics
Automated v/s Manual

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Why is this important and what can we do ?

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LEARN
PLAN
ENGAGE
ADAPT

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LEARN
PLAN
ENGAGE
ADAPT

20. Strong Technology & IT Systems
Location
Reliability and Experience
Must Haves
Buyers
Alternate Delivery Options
Equipment Functioning
Labor Shift Detail
Service Providers
Demand Forecasting
Selecting the Right Supplier
CDL Logistics – London Olympics
•Warehousing and delivery teams were expanded
•Sourced 20 additional vehicles
•Embraced night time and weekend deliveries
Preventing Seasonal Barriers and road congestion
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LEARN
PLAN
ENGAGE
ADAPT

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Pricing Bases
Suppliers
Distance to Focus Markets
Outsourcing Practice
Global Contract packagers and 3PLs
Local Contract Packagers and 3PLs
Both Global and Local supply base
Near Focus markets
Within Focus Markets
Overseas delivery
Product Volume Based Pricing
Pricing based on Service fees
Time & Material Pricing
Value Added Service Based Pricing
Customized Co- packaging Requirements
(E.g. Seasonal demand spurts such as Christmas and New Year or Chinese New Year etc.., or non standard product packaging etc.).
•Internal Co-Packaging Expertise: Medium
•Operational Complexities/Risks : High
Full-Outsourcing Strategy
Hybrid/Embedded Operations
In-Sourcing or Self sourcing Strategy

23. •Location- USA
•Number of Facilities- 6
•Peak Season handling Strategy- Establishing packaging lines in customer distribution center.
Benefit for buyer- Greater control over quality.
•Client – COTY
•Peak season estimates- 8 million packs over 3 million in off season
•Practice- Establish new packaging lines self site or customer site.
•Increased transparency with client.
Meet the increased demand of 5 million packs
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Coregistics – Embedded operations
Saddle Creek Logistics – Christmas

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Pricing Bases
Suppliers
Distance to Focus Markets
Outsourcing Practice
Global Contract packagers and 3PLs
Local Contract Packagers and 3PLs
Both Global and Local supply base
Near Focus markets
Within Focus Markets
Overseas delivery
Product Volume Based Pricing
Pricing based on Service fees
Time & Material Pricing
Value Added Service Based Pricing
Customized Co- packaging Requirements
Full-Outsourcing Strategy
Hybrid/Embedded Operations
In-Sourcing or Self sourcing Strategy
(E.g. New product launch in a nascent markets)
•Internal Co-Packaging Expertise: Low
•Operational Complexities/Risks : High

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LEARN
PLAN
ENGAGE
ADAPT

26. Cross Road Centers
• Logistic providers in the USA
• Were approached by another warehousing and transportation provider
• Developed partnership
• Result – Delivered ahead of time
Bottleneck
Category
Demand
Variability
Reactive
Plan B
Educate
Weekly Forecasts
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LEARN
PLAN
ENGAGE
ADAPT

28. Are we ready?
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Necessity for Contract packaging
Situational importance of Contract packaging
Pain Points in peak seasons
Planning for Peak Seasons
Engaging in Peak Seasons
Adapting in peak Seasons

29. Are we ready?
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Direct Impact on retail sector:- 600-700 million Lira