To find the best price and quality for every packaging supply, many companies work with a variety of packaging suppliers. Each has its own schedule, requirements, and point of contact. When one supplier runs late or changes a specification, the delay can reach your production line, your warehouse, and your shipping schedule.
A problem with one supplier can affect other parts of your supply chain.
Shifting into single-source packaging can simplify how you manage your packaging supplies. When one supplier handles most or all of your requirements, your team will have fewer orders, schedules, and contacts to manage.
If you’re rethinking your current supplier setup or making the case for consolidating your packaging needs, keep reading!
Working with different suppliers for different packaging materials is a strategic approach to sourcing the right products at the right price. However, managing each supplier separately can easily become complicated, especially as your packaging requirements change.
Changing your box size can change how much packaging material you need to protect your product during transport. Changing your box board grade can change how well your tape holds the seams closed. Switching from paper void fill to air pillows can change what the rest of your packaging needs to do, which may require adjustments to the box or other packaging components. Changing your box surface or coating can change how well your shipping labels stick.
Say you order your boxes, tape, and void fill at the same time. The boxes arrive on schedule, but the tape and void fill arrive a week later. If you don't have enough of those materials in your inventory to cover the gap, your team has to find another way to keep your products moving. You may need to place another order, pay for expedited freight, or pull materials from another production run, which can increase your packaging supply costs and complicate your inventory planning.
When you work with several packaging suppliers, your procurement team must manage each relationship separately and stay on top of each supplier's commitments.
You also have more supplier-related issues to account for. When one supplier changes something, your team must determine how it affects the rest of your packaging requirements and decide what to do next.
You may already have some of this information in your purchasing and supplier records. The rest may require input from the people managing these relationships day to day. Together, these numbers give you a basis for calculating the management cost of your current supplier network.
Managing several packaging suppliers costs more than what you pay for the packaging itself. Your team also spends time placing and tracking orders, managing deliveries, resolving quality issues, and keeping each supplier relationship on track.
Before moving to a single-source approach, calculate what your current supplier structure costs beyond the packaging price. Consider:
Include these costs in your annual packaging spend to get a clearer picture of what your current supplier structure actually costs. Then compare that figure with the expected cost of consolidating your packaging purchases with one supplier.
Before selecting a supplier, make sure they can meet your current packaging requirements, including:
Switching to single-source packaging means trusting one partner to take on more responsibility for your packaging requirements. Before you consolidate, consider whether they can handle higher volumes and respond to disruptions. Most importantly, the right partner must know how to adapt as your business requirements change.
To reduce exposure to supplier disruptions while still simplifying supplier management, you can use a hybrid sourcing strategy. Some companies consolidate most of their packaging with one partner while keeping a second supplier for specialty materials or higher-risk items.
A smaller supplier count may not justify the change. Your stakeholders will want to understand what the business gains from the change, along with the potential risks and trade-offs.
Compare your current costs with what you expect to pay after consolidation. Include packaging costs, supplier management time, freight, inventory, expedited orders, and costs tied to packaging problems.
Then evaluate whether the supplier can support your requirements at the volume you need. Can the supplier handle your volume during your busiest periods? What happens if demand increases? What backup plans are in place if production or transportation is disrupted?
You should also account for the work your procurement team handles today. How many purchase orders are they placing? How many suppliers do they contact when something changes? How much time goes into tracking deliveries and resolving issues?
Then evaluate the packaging itself. If one partner can provide your boxes, protective materials, and other packaging needs, consider whether consolidating those purchases could reduce material use, product damage, rework, or other packaging-related costs.
Review the same setup against your sustainability requirements. Compare the proposed materials and sourcing practices with your company’s existing targets for material use and recyclability.
That said, a single-source packaging approach isn't always the right solution for every business. The right setup depends on your packaging requirements, supply needs, and how much supplier diversification your business needs.
Once you decide to consolidate, you need to evaluate potential suppliers differently. At this point, you’re no longer evaluating a supplier’s ability to provide one packaging product at a competitive price. You’re now evaluating its ability to handle several parts of your packaging needs, manage them as a single program, and adapt as those needs change.
As part of the Atlantic Packaging Group of Companies, York Container works with a network of 200 trusted packaging suppliers, which gives us access to the materials your program needs while providing you with one point of contact for your packaging requirements.
If you’re considering a single-source packaging strategy, talk to York Container’s packaging experts to evaluate your current program and determine the right approach and best packaging solutions for your business.
A. Single-source packaging means purchasing most or all of your packaging needs from one partner instead of managing separate suppliers for each material or category.
A. Using one supplier can reduce the number of orders, contacts, delivery schedules, and supplier relationships your team needs to manage. It can also give your team one point of contact when packaging specifications change.
A. It can be, but not in every case. Single-source packaging can reduce the time and resources your team spends managing multiple suppliers, but you need to compare those savings with the costs of the proposed setup. Consider supplier management, freight, inventory, expedited orders, damage, and rework alongside packaging prices to determine the total cost of each sourcing approach.
A. Use multiple suppliers when you need specialized materials, have unique volume requirements, or want a second source for specific products. Keeping multiple suppliers can also give you additional sourcing options for specialty packaging or materials with higher supply risk.