When should manufacturers and other companies refill their packaging stock? Should they plan ahead and sit "fat on the hog," or should they only send out an order when they're near empty? What sort of impact will these choices have on production, efficiency and the bottom line? For those businesses that wish someone knowledgeable could answer these questions for them, the solution is simple: Find a vendor managed inventory program to help.
Streamline processes with data management
VMI solutions work with businesses to gather the necessary information to decide on the perfect time to replenish packaging stock based on real-time data. As production volumes or product portfolios change, VMI programs use up-to-the-minute information to ship exactly how much material businesses need – no more, no less. This eliminates the need for manufacturing packers to count out individual boxes sitting in storage. When a shipment arrives, teams can get right to work. Cutting out this step can significantly reduce lead times and get finished products released faster.
Slim down inventory and improve cost-efficiency
VMI programs ascribe to the "Just-in-Time" business model and only send packaging materials as necessary. As a result, businesses partnered with VMI providers will likely decrease the amount of boxes and other packaging supplies in their stockrooms. According to the Small Business Chronicle, lowering on-site inventory offers up a bounty of cost-effective benefits. For example, fewer packaging products lying around waiting to be used means businesses don't have to spend nearly as much for labor costs related to inventory management. Companies also mitigate upfront procurement costs and save money from the get-go.
Preserve the integrity of valuable packaging materials
In many cases, packaging is the face of a company's brand. When a customer stands at a shelf thinking about which products to buy, packaging plays an integral role in their ultimate decision. So it's no surprise nearly one-fifth of all businesses spend at least 50 percent of their materials handling budget on packaging alone, according to a study conducted by the Peerless Research Group. When businesses work with VMI providers, the supplier may print and hold pallets of packaging in anticipation of a client's need. As such, the onus of responsibility to safeguard packaging from damage lies with the VMI provider, not the customer. That's one less thing to worry about! Not only will these clients retain costs, but they increase their chances of releasing a pristine product capable of attracting the most discerning shopper.