Anyone in the manufacturing or industrial space understands the benefits of implementing a lean inventory or just-in-time inventory system. Just-in-time inventory keeps your shelves clear, allowing you to better use your facility space. It can also have a positive impact on your cash flow, as you don’t have to pay for inventory until you actually need it.
If a just-in-time philosophy works so well for your inventory, why can’t it also work well for your packaging? That’s a question that many businesses ask as they wrestle with substantial packaging needs.
In many cases, customers are able to pay for the packages as they are delivered. This can help alleviate cash flow pressure.
Many packaging companies require customers to order packaging in bulk. You may have to purchase months’ worth of packaging at a time, even if you don’t fully know what your needs will be over that period. If your volume fluctuates, those bulk packaging orders could be problematic for your warehousing and your cash flow.
Fortunately, there are alternatives available. Here at Deufol, we offer an innovative solution to help manufacturing and industrial companies who may have variable production needs. It could be the right solution to help you take back control of your cash flow and your warehousing.
We informally refer to this solution as “build-and-release,” which is our version of just-in-time packaging production. In a build-and-release program, the customer places an order for a number of packages to be used over a set period of time, such as three or six months. We then start producing those packages and storing them in our warehouse.
When the customer needs the package, we ship it to their facility. They receive the package exactly when they need it, eliminating the need to store packaging in their facility. Depending on the customer’s needs, we may send the packaging completely assembled or we may send it partially assembled so it can be completed in the customer’s facility.
Payment terms often depend on the specifics of the agreement. However, in many cases, customers are able to pay for the packages as they are delivered. That can help alleviate cash flow pressure.
A build-and-release program can be especially helpful if you have a variety of packaging needs. For example, you may need different sizes, shapes, or protection tools for different products. Customers are often able to use a build-and-release program to provide a broad range of different package types.
Interested in using a build-and-release or just-in-time packaging program in your business? The key is to find the right packaging partner. Not all packaging companies have the resources available to build and store a broad range of different package types. They may not have the warehouse space or equipment necessary to meet such needs.
Other packagers may not have the financial flexibility to produce packaging today for delivery and payment in the future. If the packager can’t offer flexible payment terms, you may lose the cash flow benefits of using a build-and-release program. The best way to identify a potential build-and-release partner is to do your due diligence and ask tough questions
If you have variable and changing packaging needs or limited facility space, a build-and-release program could be the right strategy for you. Connect with potential packaging partners and ask them about their ability to provide build-and-release packaging services.