Outsourcing to the rescue in an unprecedented year By Rodney Steel, Chief Executive, BCMPA
Rodney Steel, Chief Executive of the Association for Contract Manufacturing, Packing, Fulfilment & Logistics, reflects on how outsourcing has played a key role in supporting businesses during the pandemic
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here have been winners and losers in 2020, but the outsourcing industry has been absolutely essential to many manufacturers and brands owners who, without our members’ help, would have been in a precarious position.
ADAPTING QUICKLY TO CHANGING REQUIREMENTS
A prime example of our members’ flexibility was the demand for sanitiser products, which rocketed to hundreds of millions of units virtually overnight. Additional filling machines were installed, existing bottling lines for shampoo and gin were adapted for hand sanitiser, and gift packing production was diverted to produce PPE kits. By their nature, outsourcing companies are used to being nimble, but the challenges of 2020 required them to be positively athletic, in order to respond quickly to changing market requirements and consumer demands.
E-COMMERCE FULFILMENT
One area in particular that experienced huge growth as a result of the pandemic was online sales and deliveries made direct to consumer (D2C). In fact, this increase in online shopping had already been identified as a significant trend for 2020, but the impact on demand caused by COVID-19 was vast. For many of our members, demand for certain products
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meant that they were experiencing the peaks of Christmas or Black Friday on an almost daily basis. While this undoubtedly generated major commercial opportunities for brand owners, it also brought with it the risk that they might not be able to cope with such large volume growth, which could in turn damage their reputation with their end customers. Outsourcing, therefore, provided a valuable solution to mitigate this risk.
DELIVERING THE ‘END-TO-END’ SERVICE
To satisfy this ever-growing requirement for companies to outsource their e-commerce fulfilment and logistics operations, many BCMPA members now provide a complete ‘end-to-end’ service covering everything from contract manufacturing and packing through to storage, pick, pack & despatch. Support is there right across the supply chain. As one brand owner put it, “If we are going to outsource at all, we would much prefer to outsource the complete project so that we can get on with focusing on other parts of our business.” Another strong trend in 2020 was the significant increase in enquiries from smaller brands and marketeers who had identified opportunities for new products and were reliant on using e-commerce and online channels to bring them straight to market. This growth was typified by the explosion in enquiries on the BCMPA website for White Label and Private Label goods. Once again the ‘one-stop-shop’ was a key attraction.
INCREASING DIGITALISATION
Another growing trend has been the move towards digitalisation, driven both by the need for increased efficiencies and the demand for greater visibility from customers, particularly in FMCG markets. While packing lines will continue to value pairs of human hands, 2021 will undoubtedly see the
