Outsourcing as a key to success 17th August 2020
By Mark Riemer
Contract manufacturers and co-packers release capacity so that the customer can concentrate on his core competences – for example research and development or marketing and sales, says Mark Riemer of SternMaid GmbH & Co. KG.
The first step towards cooperation with a contract manufacturer is often taken when firms realize that through specific outsourcing they can reduce the workload on their own company. Such service providers open up access to technologies and skills outside the company’s own production capabilities. Other reasons for outsourcing include cost-saving, rapid growth or a search for better quality, and also the additional know-how acquired through cooperation with specialist partners.
Filling of cardboard cans. Such cans are increasingly being used in the food industry as more sustainable replacements for aluminium ones.
Sometimes it is easier to approach a specialist service provider such as SternMaid, a company with a core business in blending, processing and filling products in powder form. First of all, outsourcing is an interesting option for firms that intend to expand but do not want to make additional investments. For after all, plant of one’s own binds capital, space and personnel. Large companies, on the other hand, often want to restructure their production and outsource just part of it. For well-known brand manufacturers a second supplier strategy is becoming more and more important in order to safeguard their own ability to deliver large orders or for integrating a new product into their range. In many cases, whole product lines such as private labels are produced and packaged by contract manufacturers.
The ‘all-round carefree’ package
The demand for more transparency in the supply chain has also contributed to a stronger focus on the role of toll production. Contract manufacturers have to keep the entire process chain in mind. The right choice and combination of process parameters is essential, depending on requirements. One example: A food manufacturer extrudes cereals and stores flours and sugar as single components in a silo, but the other raw materials are often added as a mixture and the manufacturer is looking for someone to produce this mixture. The service provider must first ask for a specification of the individual ingredients. In this context, regulatory criteria such as allergens and non-GMO status have to be taken into account to the same extent as the physical parameters of the product including bulk density, flow properties, particle distribution and the moisture content of the raw materials used.
SternMaid can offer the whole service chain from one source. The spectrum ranges from blending and processing to a complete service package that includes the purchase of raw materials, co-packing, quality control, warehousing and delivery and even product development can be offered through the development unit of SternMaid’s sister company SternLife. Customers can either make use of the whole package or choose individual modules to meet their particular needs. Many customers also welcome the company’s delivery service. It enables goods to be dispatched straight from the contract manufacturer to the final recipient, thus saving transport charges – an important argument in view of the increasing pressure of costs and efforts to reduce carbon emissions.
A good service provider picks his customers up just where they are. He accepts their market objectives and listens to what they want. Together with the customer, he develops a convincing product and packaging concept tailored precisely to the customer’s needs. Because ultimately, the contract manufacturer and his customer are pursuing the same objective: to put a successful product on the market.
Sustainably packaged protein powder
An attractive pack is an important criterion for the success of any product in the retail trade. The pack must be eye-catching, stand out from its competitors and be practical and inexpensive – and nevertheless safe. Optimization from the ecological point of view, for instance suitability for recycling, is playing an increasingly important role, too. For example, since 2017, SternMaid has produced the vegan protein powder range of a company in Hamburg, Germany. Together, the two firms have further optimized the production process, quality and packaging of the products.
There has also been close cooperation in the choice of packaging materials. The client wished to reduce the aluminium content of its products as far as possible. The spiral-wound composite cans for the protein powder are made of recycled cardboard and a new feature is the aluminium-free white interior lamination. In order to make the products more sustainable, a laminate consisting of PET film coated with silicon oxide and a carrier paper is used instead of aluminium. In this case, too, development work is continuing and SternMaid is now also able to replace the tin base of the cans with cardboard.
More planning certainty
Product life cycles are becoming shorter all the time. On the one hand, products have to reach market maturity faster, and on the other hand market conditions change very quickly. That is yet another reason why more and more companies are resorting to contract manufacturing and classic co-packing. Companies have to think very carefully, nowadays, before investing in large plant and faster innovation cycles go hand in hand with shorter product lifetimes. There is a need for caution when introducing novel or niche products. Who knows whether the plant for a particular dry beverage base or food supplement will still be used to capacity in a few years’ time? Outsourcing enables manufacturers to save costs and minimize risks.
SternMaid GmbH & Co. KG