Eric Collier is the Executive Vice President of Global Commercial Operations for BW Integrated Systems. In the following article, which was originally published in Packaging Strategies, Collier discusses transparency, OEM management, packaging line design, and other contributing factors of successful packaging line integration.
For many of today’s top CPGs, packaging line integrations have become routine investments; necessary for meeting changing market demands and improving the overall efficiency of production lines. The relative success of a packaging line integration can be determined by answering “yes” to three questions:
- Was the project completed on budget?
- Did the line start up on time?
- Does the line run at its committed efficiency?
To check all three of these boxes requires diligent project planning and total transparency between you and your integrator. In this post, we’ll recommend five key topics you should discuss with your prospective packaging line integrator to ensure your integration gets completed on time and on budget.
Why is Transparency Important to Packaging Line Integrations?
Before we jump into the topics, let’s address transparency. Transparency is an important component of any supplier/buyer relationship, regardless of the project’s scale. It’s important because when you spend company money with a supplier, you’re not just purchasing equipment and services from that supplier; you’re telling them “I trust you to deliver what you promised, to make me look good in front of my boss, and to make my job easier.”
When you’re responsible for overseeing a packaging line integration, which are often multimillion-dollar investments, the importance of that transparency is amplified with every dollar. The impact of the integrator you choose – good or bad – will be felt within your organization (and likely your career) for years to come. Having a candid, transparent conversation with your integrator is the first step you should take to ensure you’re making the right decisions throughout the course of your project.
Top 5 Packaging Line Integrator Discussion Topics
The quickest way to determine if your integrator is being transparent about their capabilities is to ask for proof of experience. Case studies are a great place to start. Ask your integrator for examples of similar projects they’ve completed so you can get an idea of how their solutions match up with your project.
You should also ask for references. This can include past clients, OEMs, installers, or any other vendor that has worked closely with the integrator. Ask probing questions about their experiences with the integrator. What did they do well? Did everything go smoothly with the project? If not, how did the integrator respond to adversity?
Working with a large, financially strong integrator can be useful in managing your own financial risk. Such integrators, including BW Integrated Systems, usually offer creative financing agreements that can help you comfortably manage your cash flow as you invest in new packaging infrastructure. This is especially useful when weathering unforeseeable market disruptions, like those created by the COVID-19 pandemic.
Additionally, these integrators can leverage their own financial experience to guide you through ROI calculation and other hurdles associated with financing. If they’re already acting as your advisors and analyzing market trends as they pertain to your investment potential, they might also offer to present these findings to upper management on your behalf.
If you haven’t built relationships with suitable OEMs for your integration, then this is another opportunity to lean on your integrator. They should be able to recommend suitable, credible OEMs for your project and, upon request, provide examples of how they have seen success on similar projects working with those OEMs.
Regardless of who picks the OEMs, it’s best to take a consultative approach with your integrator. If you’ve already identified the OEMs you’d like to work with, that’s okay too. However, if you force an integrator to work with vendors they don’t know or trust, they’re likely to increase their fees during contract negotiations or make changes to the contract itself in order to protect themselves from risk.
Strict contract demands – including tight timeline constraints, total control over OEM selection, and asking the integrator to sign up for terms such as “liquidated damages” – will often drive up your cost. This is because experienced integrators know that agreeing to such demands puts them at greater risk.
Understanding your own “risk profile” is also vitally important when it comes to negotiating a contract with your integrator. Your goal should be to strike the right balance between cost and risk. This requires looking inward at the depth and quality of your in-house resources. Are you equipped to handle the installation yourself? Who will be responsible for shipping? What risks are associated with owning those steps in-house? What assurances are granted by contracting the integrator to do them?
Packaging Line Design
Finally, it’s important to discuss the considerations that will inform your integrator on how to design a packaging line that is well-optimized for your particular plant environment. This will require a thorough review of several factors including your footprint, utilities, material flow, and more. Your goal should be to lay out a packaging line that is efficient in its use of space, optimizes labors, and most importantly, is operationally efficient.
For example, if you have a flow-through facility, meaning materials come through on one side of the plant and the product ships out on the other, you’ll likely want an inline packaging line design. By contrast, if both in and out are on the same side of the building, you probably want a “u” shaped line.