Medical Device Link.

Pharmaceutical and Medical Packaging News Magazine
PMPN Article Index

Originally Published April 2000

Solving Problems in Contract Packaging

George Glumac, president, Franklin Medical Products Inc. (Montrose, CO)

When outsourcing product packaging, pharmaceutical and medical device manufacturers should consider several key factors. These include the initial setting of marketing goals, final project expectations regarding both product appearance and cost, and contractor manufacturing agreements. Keeping these items clearly defined throughout the outsourcing project will ensure a successful outsourcing experience.

WHY CHOOSE A CONTRACT PACKAGER?

Many pharmaceutical and medical device manufacturers choose outsourcing to cut costs in-house, to perform a marketing test run on a new product, or in cases where taking on the project in-house would mean losing valuable production time for existing projects.

In addition, many manufacturers may not have the in-house expertise or time to set up a new product run or a test-market run requiring a low number of piece counts. They may turn to a contract packager to solve cost, delivery, or defect rate problems. Outsourcing provides a cost-effective way to keep manufacturers' own packaging machines working at productive levels.

When considering a contract relationship, manufacturers should ask their purchasing, quality control, and marketing departments the same question: What are we trying to accomplish with our product? Addressing this question can bring about further goal-related inquiries:

• Can outsourcing add more capacity to an existing packaging line?
• Will outsourcing reduce costs for a new product test-market run without tying up production equipment?
• Can outsourcing potentially provide a new approach to current packaging shortcomings?
• Will outsourcing reduce in-house research and development costs?
• Can outsourcing reduce waste, improve yields, or eliminate rejects?
• Will outsourcing provide packaging solutions, which can be equated to increased sales?

Affirmative answers to such questions may signal the need for a contract packager. Once the need is identified, firms can then create specific goals for the contract relationship.

PROJECT EXPECTATIONS

Manufacturers whose goals are outlined in clear terms will aid the contract packager in accomplishing what may have initially appeared unmanageable. By outlining desired unit costs, fill rates, yields, percents, and types of rejects, feasibility, and existing packaging problems, the contract packager is able to begin its problem-solving approach.

Discussing what the final product should or will look like is important not only to the contract packager, but necessary in order to meet the expectations of the manufacturer. Solving problems can often lead to packaging redesign, which must be clearly explained to all involved parties in order to maintain an above-average working relationship.

The bottom line is to avoid waste. Neither party wishes to make the costly mistake of repackaging a job because of miscommunication regarding the final project expectations.

QUANTIFY AND DOCUMENT

In the hands of a competent contract manufacturer, packaging and filling problems will be worked out in the design stage, which will result in a superior final product. Recordkeeping, which quantifies and documents what is working and what is not, should be expected from a contract packager. Only then can new or modified design work be justified.

DESIGN AND ACCOUNTABILITY

When formalizing a bid, it is the contract packager's responsibility to write a specific agreement for each job. A manufacturer should expect a contract to include certain key features. A contract should:

• Define who is responsible for each part of the packaging process.
• Define a schedule for communications throughout the packaging process to identify and flag any problems as they occur.
• Designate a qualified contact to clarify specifications and make problem-solving decisions; immediate feedback allows for immediate corrections, saving time and money.
• Include a clause to meet when serious problems arise and agree to resolve through a two-party discussion.

EXIT STRATEGIES

Change is constant, and the contract packager must plan ahead for the cancellation of any contract by either party. Manufacturers will feel more secure in outsourcing if they have an exit opportunity in their contract. If faced with a serious redesign or filling problem in pre- or midproduction, each party has a way to end the relationship. Neither a contract packager nor the manufacturer should be forced into a closed-ended agreement that cannot be resolved without significant time or cost.

IMPROVING RELATIONS

Both the customer and the contract packager will work well together when goals are clear, feedback is immediate, and both parties agree to perform their share of the "what-ifs," thus improving each other's business position.