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Critical packaging is, well, critical, meaning that it is instrumental to the safekeeping of a sensitive product, such as food or medicine. With that said, the packaging not only has to function correctly, but it must also be in constant supply. Any supply-chain interruption would be catastrophic to the delivery of these essential and potentially life-saving products. Choosing a supplier with a stocking program helps ensure supply-chain integrity by adding extra product reserves for emergencies. Read on to see if this program is suitable for your packaging application.

The Obstacles of Critical Packaging Manufacturing

Critical packaging manufacturing is no easy task. The process uses specialty raw material formulations that aren’t always readily available. This scarcity makes raw material acquisition more difficult and time-consuming, extending manufacturer lead times well above average. Critical products also have an extended setup and run time due to the increased quality controls. Despite these obstacles, suppliers must still manufacture and deliver these products on a tight schedule, leading businesses to implement stocking programs.

What is a Supplier Stocking Program?

Put simply, a supplier stocking program is a measure taken to ensure there is ALWAYS inventory ready for a customer whenever they request it. With a stocking program, a manufacturer produces a product in bulk for storage in their warehouse until the customer authorizes a specific quantity for shipment, which the supplier then replaces.

The Benefits of a Supplier Stocking Program

In recent times, business is more unpredictable than ever before. Implementing a stocking program can help protect businesses from this volatility and make doing business a little smoother for everyone involved. Some of these protections include:

Improved Supply Chain Integrity

The second stockpile of inventory the program creates is another backup plan for unexpected circumstances. These circumstances may include a sudden spike in product usage or a sudden shortage of packaging raw materials. Creating a more robust supply chain with several inventory hubs is essential to minimize the risks associated with these circumstances.

Less Susceptible to Price Volatility

Packaging raw material prices are subject to change every month. This volatility makes it hard for customers to forecast costs, as they have their own operations to manage. An educated supplier keeps a close eye on raw material indicators and uses this knowledge to guide their customer on the most cost-efficient times to place bulk orders. By knowing when is the best time to buy, customers achieve long-term cost savings.

Relationship Building with Supplier

Most importantly, the collaboration required to make this program run smoothly cultivates a lasting relationship between supplier and customer. The concerted effort to achieve the mutually beneficial goal of the customer’s success is the foundation of a long-term business partnership.

If you have any questions about supplier stocking programs or think they may be right for you, connect with us to learn more!

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