The two biggest constraints that General Managers face when needing scaling their packaging operation is floor space and labor supply. The expansion of the packaging department typically follows investments in new production equipment. New equipment will typically have faster run speeds, thus increasing throughput. And while production is focused on increasing throughput, it will mean the packaging department must adapt in order to put more units through the same set up. The following two major initiatives will help GMs and project planners to scale their packaging solutions in order to accommodate additional volume in the same amount of dedicated space while also being able to still staff their packaging operation.
2 Major Initiatives to Embark on to Scale Packaging Departments
1.Contract Packaging Outsource Partner: contract packaging companies come in many different varieties. In this scenario whereby the scaling of the packaging department is constrained by floor space and labor, the right contract packaging outsourced partner will also have their own fulfillment facilities where they can onboard your products and your packaging. This should be done at a discount to an on-site operation as they are able to spread their overhead cost, namely supervision and material handling, to all of their clients. This discount will likely compensate for the added expense of freight back and forth.If you are short on floor space, or could expand production into the floor space currently used by the packaging department, this should be a primary option,
2.Using Lean Techniques in Hand Packaging: most lean process approaches are focused on manufacturing and production. That is where the largest opportunity for savings is, though there is also significant savings in the hand assembly, hand packaging and hand kitting departments. A good lean approach in these packaging departments will help your business scale by increasing throughput with less labor. Lean techniques such as those used by contract packaging companies like Productiv focus on single piece flow, simplifying the work process, making the work easy on the labor force and then motivating employees through a carefully designed gainsharing plan. In addition to increasing throughput, this move to single piece flow from batch processing will also reduce WIP inventory, freeing up valuable floor space.
A good contract packaging partner will be able to provide (1) on-site program, (2) off-site overflow with their own fulfillment centers and (3) lean process design. This offering will not only relieve capacity constraints on floor space and labor, it will also have the following benefits:
- Increase profit by reducing temporary labor and overtime labor expense
- Support local management teams by taking the burden of managing temps and packers off of their shoulders to instead focus on production
- Ability to flex labor to meet scheduling demands
- Provide a pipeline of good candidates to hire into skilled operator roles
As you look to implement this plan, a good contract packaging company will be able to design a program for both on-site and off-site support and will use lean techniques in order to maximize throughput while reducing cost and reducing inventory.