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Contract Packaging and its Implications on the Supply Chain - The Case of a Contract Packager

Wallin, Claes LU (2003)
Abstract
In trying to get products out to the market in promotional or display packaging,

companies have the option of turning to a contract packager. The purpose of this

thesis is to present the area of contract packaging, specifically discussing the

internal factors that make a contract packager an attractive actor to outsource

packaging of products to and also to find out how a contract packager can affect

the supply chain of the company outsourcing to such an actor. The questions

posed in this thesis are:

- When is it appropriate to outsource?

- Why is a supplier of contract packaging successful?

- How is the supply chain affected when outsourcing to a contract... (More)
In trying to get products out to the market in promotional or display packaging,

companies have the option of turning to a contract packager. The purpose of this

thesis is to present the area of contract packaging, specifically discussing the

internal factors that make a contract packager an attractive actor to outsource

packaging of products to and also to find out how a contract packager can affect

the supply chain of the company outsourcing to such an actor. The questions

posed in this thesis are:

- When is it appropriate to outsource?

- Why is a supplier of contract packaging successful?

- How is the supply chain affected when outsourcing to a contract packager?

In addressing these questions a systems approach has been used, because a systems

approach allows the researcher to see properties of the whole, rather than seeing

the sum of parts as the collective properties of a system. The empirical data were

collected through a case study of one company performing contract packaging.

Literature was studied in the areas of outsourcing, supply chain/supply chain

management, third-party logistics and contract packaging.

Each of the questions posed was answered through the papers appended in this

thesis. The first paper uses complexity theory in order for managers to be able to

view outsourcing situations from a balanced perspective, providing guidance from

two important functions – relative power and interface complexity. The conclusion

reached in this paper is that in order for an outsourcing situation to be appropriate,

the outsourcing company, vis-à-vis the supplier of the activity/process, needs to

have high relative power while keeping interface complexity low.

V

The second and third papers discuss why a contract packager is successful and how

it affects the supply chain of the company engaging it. In reference to the contract

packager, it is ascertained that important activities to offer, besides the packing of

products, are design and manufacturing of packaging and warehousing of the

product of the customer. In using a contract packager, the company engaging it can

utilize certain characteristics of contract packaging. The characteristics displayed by

contract packaging are the “one-stop shop”, flexibility and warehousing. These

characteristics give an outcome in the supply chain that can be used by the

company to achieve effectiveness — from manufacturing of the product to the

delivery of the product in display packaging to the store. The company’s supply

chain is enabled to reduce uncertainty, reduce time-to-market of the promotions,

and increase responsiveness. The company can also realize other benefits including

consolidation of products and postponement of manufacturing of packaging and

packing. (Less)
Please use this url to cite or link to this publication:
author
supervisor
organization
publishing date
type
Thesis
publication status
published
subject
keywords
packaging logistics, outsourcing, packaging, suppy chain
ISBN
91-974611-8-0
language
English
LU publication?
yes
id
5218b82a-af2a-4d57-aaf0-3f8858375c68 (old id 1149937)
date added to LUP
2008-05-27 14:52:39
date last changed
2016-09-19 08:45:18
@misc{5218b82a-af2a-4d57-aaf0-3f8858375c68,
  abstract     = {In trying to get products out to the market in promotional or display packaging,<br/><br>
companies have the option of turning to a contract packager. The purpose of this<br/><br>
thesis is to present the area of contract packaging, specifically discussing the<br/><br>
internal factors that make a contract packager an attractive actor to outsource<br/><br>
packaging of products to and also to find out how a contract packager can affect<br/><br>
the supply chain of the company outsourcing to such an actor. The questions<br/><br>
posed in this thesis are:<br/><br>
- When is it appropriate to outsource?<br/><br>
- Why is a supplier of contract packaging successful?<br/><br>
- How is the supply chain affected when outsourcing to a contract packager?<br/><br>
In addressing these questions a systems approach has been used, because a systems<br/><br>
approach allows the researcher to see properties of the whole, rather than seeing<br/><br>
the sum of parts as the collective properties of a system. The empirical data were<br/><br>
collected through a case study of one company performing contract packaging.<br/><br>
Literature was studied in the areas of outsourcing, supply chain/supply chain<br/><br>
management, third-party logistics and contract packaging.<br/><br>
Each of the questions posed was answered through the papers appended in this<br/><br>
thesis. The first paper uses complexity theory in order for managers to be able to<br/><br>
view outsourcing situations from a balanced perspective, providing guidance from<br/><br>
two important functions – relative power and interface complexity. The conclusion<br/><br>
reached in this paper is that in order for an outsourcing situation to be appropriate,<br/><br>
the outsourcing company, vis-à-vis the supplier of the activity/process, needs to<br/><br>
have high relative power while keeping interface complexity low.<br/><br>
V<br/><br>
The second and third papers discuss why a contract packager is successful and how<br/><br>
it affects the supply chain of the company engaging it. In reference to the contract<br/><br>
packager, it is ascertained that important activities to offer, besides the packing of<br/><br>
products, are design and manufacturing of packaging and warehousing of the<br/><br>
product of the customer. In using a contract packager, the company engaging it can<br/><br>
utilize certain characteristics of contract packaging. The characteristics displayed by<br/><br>
contract packaging are the “one-stop shop”, flexibility and warehousing. These<br/><br>
characteristics give an outcome in the supply chain that can be used by the<br/><br>
company to achieve effectiveness — from manufacturing of the product to the<br/><br>
delivery of the product in display packaging to the store. The company’s supply<br/><br>
chain is enabled to reduce uncertainty, reduce time-to-market of the promotions,<br/><br>
and increase responsiveness. The company can also realize other benefits including<br/><br>
consolidation of products and postponement of manufacturing of packaging and<br/><br>
packing.},
  author       = {Wallin, Claes},
  isbn         = {91-974611-8-0},
  keyword      = {packaging logistics,outsourcing,packaging,suppy chain},
  language     = {eng},
  note         = {Licentiate Thesis},
  title        = {Contract Packaging and its Implications on the Supply Chain - The Case of a Contract Packager},
  year         = {2003},
}