Packaging materials and equipment are often taken for granted but can be mission-critical items for busy manufacturing and distribution operations. What are some of the important considerations to think about when purchasing packaging materials and equipment?
In a recent chat for USA Manufacturing Hour on Twitter, host Nathan Dube from Industrial Packaging in Massachusetts led an online discussion about Proper Packaging Protocols in today’s logistics climate.
Lead Times
The discussion began with participants sharing their definition of lead times.
Kelley Plats from NACL in Ohio said, “The bane of my existence when waiting for something...in reality it is the expected time between order and receipt of product or service!”
Host Dube said, “BINGO!”
Gina Tabasso from MAGNET in Ohio said, “The time it takes from order to fulfillment/delivery.”
She continued, “I have a client who makes $1 million niche machines. Lead time is currently 18 months!”
David Crysler from The Crysler Club in Michigan said, “Woah! Is that supply chain related or are they just that busy?!”
Host Dube said, “Yikes!”
Tabasso said, “People keep ordering machines; so, they are sold out/booked into 2023. But some of it is also a lack of staff and supply chain.”
Crysler said, “Wow! They could probably raise prices to try and stem the flow of incoming because they could be unnecessarily eroding margin if they don't have price escalation clauses built in. Sounds like a fun challenge to have!!”
Chris Giglio from Rovere Media in New Jersey said, “How long it will take to complete a process.”
Ruby Rusine from Social Success Marketing in California said, “It sounds to me like a buffer time.”
Naomi from PENCOM in California said, “Lead time is the amount of time it takes to manufacture and prepare the specific product until it is finished.”
Jasmine Labelle from velavu in Canada said, “Lead time is the time between the start and end of a production process!”
Julia Gardner from Hourly – Insurance & Payroll in California said, “The space of time between processing, manufacturing, and delivering a product?”
Rebecca Prox, a Marketing Professional from Wisconsin said, “Ha! They seem non-existent these days. It's generally how long it takes from the time a sale is made (PO) to the time the product is delivered.”
Pavel Stepanov from VirtuDesk said, “Nice to know because I have no idea about this one.”
Michelle Riccetto from Brash Inc in Canada said, “I agree with Ruby on this one! I would say buffer time as well.”
Nigel T Packer from Pelatis Online in Wales, UK said, “Lead time is the time from order to delivery.”
Crysler said, “A pesky little detail too many people forget to account for in their supply chain planning and purchasing processes!”
Matt Guse from MRS Machining in Wisconsin said, “Here in Wisconsin Leadtime means the time it takes to a beer and bag of cheese curds.”
Felix P. Nater from Nater Associates in North Carolina said, “Lead time for me is the time between the reported incident, and my ability to get onsite to protect statements, victims, witnesses and other sources with first-hand knowledge of the incident between the report, and completion of my process. Make sense?”
He continued, “Another example of Lead time for me is the time between when the prospect agreed to meet to to discuss their needs and when they decide to formalize the proposal. That my run as long as 14 months.”
Ingor van Rooi, Networking Ninja from Canada said, “It's the time it takes to complete a process.”
Host Dube said, “The amount of time between the placement of an order and the arrival of said order to your physical location. IE: Lead times for some packaging machinery is more than six months.”
Packer said, “Lead times for some Government contracts are in years!”
Mission Critical
The discussion continued with participants describing why they think lead times are critical.
Packer said, “If you are running a JIT production system delays in lead times can result in a complete shutdown of production. Costing time, orders and jobs.”
Prox said, “It lets your customer know when to expect something.”
Riccetto said, “Agreed! A well-informed customer is a happy customer.”
Gardner said, “Always important to take them into consideration when you’re planning!”
Host Dube said, “Very True!”
Rusine said, “It’s a “just in case” time which you hope wouldn’t happen.”
Jim from Zero Surge in New Jersey said, “They are critical when someone needs the product. Or if the product is holding up a larger process. Sometimes, lead time is not critical.”
Plats said, “Planning! It effects staffing, inventories, and customer relationships!”
Stepanov said, “I think it's crucial because it determines a sale for manufacturers and makes processes efficient for customer satisfaction.”
Whitney Koch from Welker, Inc. in Texas said, “They help you plan and prepare.”
Riccetto said, “It all comes down to customer satisfaction! A better understanding of lead times = happier customers.”
John Buglino from Optessa Inc. in New Jersey said, “Lead times are tied to customer service Keeping or shortening = Good Changing or extending = Bad.”
Valerie Weber from Monofrax in New York said, “Customer purchasing decisions may be based on lead times. Missed lead times can cause multiple headaches for customers' production schedules, downtimes, and even scheduling of maintenance or contractors.”
Crysler said, “Helps with planning internally and to communicate/plan externally for customers.”
Kirsten Austin from DCSC Inc. in Missouri said, “In order to best plan for the correct amount of inventory, meet your customer's demands, production plans & order the right amount at the right time ~you need to have a grip on lead times. Easier said than done!”
Tabasso said, “The biggest issue I see is when manufacturers fail to communicate delays to their clients. Communication is key.”
Labelle said, “Lead times help predict sales, make operations more productive & also help in terms of customer service. It’s also one of the most important factors in inventory control!”
Koch said , “Great answer, guys!”
Giglio said, “They let customers know when to expect their product and gives the business a way to manage orders properly. Basically, it helps everyone plan ahead.”
Adam Baker from Schooley Mitchell in Pennsylvania said, “Customer decisions are based on lead times - i.e. whether they want to wait for it, commitments they are making to their clients, how many they should order.”
VirtuDesk said, “Because time is money.”
Tabasso said, “Because customers' depend on your product to produce their product, a delay at each stage of the chain could be detrimental to everyone.”
Naomi said, “Lead times are critical because it determines whether the customer would want to order from your company or not. Right now, it's just too long due to price increases and supply chain issues. So have to plan plan plan.”
Host Dube said, “Lead times are important because failing to consider them may lead to you purchasing machinery or materials too late, resulting in not being able to acquire your order in the required timeframe for your needs.”
Manufacturers or Distributors?
Next participants discussed which type of packaging vendor offers more than one brand of packaging equipment: Manufacturers or Distributors.
Packer said, “The Manufacturers. In a past life we made our own packaging to suit the lineside facilities in our clients production line. It is what won us the contract.”
Rusine said, “Distributors make a lot of sense.”
VirtuDesk said, “Totally agree with you, Ruby!”
Koch said, “Is this a trick question? Distributors.”
Crysler said, “Distributors for the win!”
Baker said, “I'm guessing with Manufacturers.”
Buglino said, “Distributors - final answer!”
Austin said, “Not sure but all ears!”
Giglio said, “My gut is telling me distributors.”
Tabasso said, “Distributors, which sometimes creates a conflict of interest since the brand that sells or is easiest to sell or has the best price can get the love. I was marketing director for a chemical distributor and a tire and maintenance-care distributor for a while.”
Plats said, “Distributors? Or is it a trick because it seems too easy...”
Prox said, “Distributors.”
Ricceto said, “Distributors!”
van Rooi said, “I'll take a guess and say distributors.”
Host Dube said, “Distributors. While most manufacturers only sell one equipment brand (their own), packaging distributors are brand agnostic. Meaning they offer multiple different brands and lines of equipment.”
Giglio said, “My gut was finally right about something!”
When to Buy
A discussion continued around when the best time is to buy packaging machinery or materials. Participants shared their thoughts.
Buglino said, “As soon as you know you need them - it would be best when completing your demand forecast + have supplies to execute.”
Labelle said, “Stumped on this one. But looking forward to the answer!”
Prox said, “Before you need to package your materials.”
Baker said, “Haha, you aren't wrong Rebecca.”
Plats said, “Before you need them or you'll be sorry!”
Riccetto said, “Based on lead times.”
Koch said, “When you won't be outsourcing this...?? Not sure.”
Tabasso said, “Before you need them; I know a lot of manufacturers currently hoarding supplies because they have the space. They bought before prices went up and made it through supply chain delays. The old rules don't apply right now.”
Host Dube said, “You should buy packaging machinery or materials based on the lead times for your chosen product. To receive the necessary machinery or materials, you must first find out what the lead times are and adjust your purchasing date accordingly.”
Plastic Packing Price Changes
The discussion wrapped up with participants discussing what they think the main reason is for plastic packaging materials increase or decrease in price.
Baker said, “Plastic prices go up and down based on the cost of natural gas fluctuations?”
Plats said, “Labor and availability of raw materials?”
Rusine said, “Supply and demand. Not sure.”
Koch said, “Issues with refineries / chemical production. I know last year's hurricanes impacted refineries along the Gulf Coast, which caused prices for some chemicals to go up.”
Packer said, “Keep supply chains short and have a secondary supplier for stability and keeping suppliers on their toes. It does not mitigate raw material price fluctuations but ensures consistency of supply.”
Riccetto said, “Availability of the material and supply chain/logistic issues.”
Labelle said, “Supply chain issues? Increased demand? These are some of the common reasons for surging prices.”
Tabasso said, “Availability and price of raw material, like in the case of the storms in Texas that took out the petrochemical plants. It put a hurting on the industry.”
Host Dube said, “Fluctuations in the petroleum industry. Plastic packaging is made from resins that are byproducts of the petroleum industry. Increases or decreases in the price of petroleum will be reflected in the cost of plastic packaging materials.”
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