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Recognising the value of outsourcing in 2022

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Rodney Steel, chief executive of the BCMPA -, believes the challenges of last year have firmly cemented the role of third-party outsourcing as a new essential in the commercial thinking of brands and retailers across the country, and that this relationship will continue to develop further in 2022.

BCMPA - Rodney Steel.jpg2021 saw extraordinary demands placed on BCMPA (the Association for Contract Manufacturing, Packing, Fulfilment & Logistics) members, as they sought to cope with the exponential rise in demand for their outsourcing services, from manufacturing and packing to fulfilment and logistics. With the high street off-limits to many consumers for large parts of the year and Direct to Customer (D2C) e-commerce therefore becoming an increasingly important channel for brands and retailers to ply their wares, the onus fell on the third-party co-packing, manufacturing, and logistics industry to deliver a wider and more extensive array of solutions, at speed and at scale.

As if the tasks of dealing with both this growth in demand and the requirement for a broader range of services were not challenging enough, the industry had to deliver solutions to address a host of other Covid and Brexit-related roadblocks, from social distancing and warehousing capacity, to fuel, raw material, logistics and labour shortages.

Further, as brands and customers alike embraced the new e-commerce landscape, services such as personalisation, facilitating new product launches and returns infrastructures began to form an essential part of a wider brief for BCMPA members. The much-used free search facility and online enquiry service on the BCMPA website has continued to enable clients to identify members offering the services they needed.

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The lessons learnt from the testing times of 2021 have produced a host of longer-term positives within the third-party co-packing, manufacturing, and logistics industry. The tremendous results that our circa 200 BCMPA members have been able to achieve on behalf of their clients over the past year have thrown into sharp focus the enormous benefits that a strong working partnership can deliver to brands and retailers, and the huge bonuses this brings in terms of speed of response, agility, and cost-effectiveness. It is no surprise therefore that we expect to see such collaborations continuing to develop into the new year and beyond.

The extended breadth of services now on offer has seen clients involve BCMPA members in projects at a much earlier stage and across a wider product sector (including new product development, pack design and responsibility for procurement) , recognising the importance of setting up a seamless, ‘start to finish’ supply chain at the very beginning of a product life cycle.

For this reason, and perhaps as never before, the true value of outsourcing and its essential role in the supply chain is being seen as a crucial asset. There is now a recognition by brands and retailers that there are strong and lasting commercial benefits in outsourcing, which can avoid costly investment in in-house facilities and enable them to focus on marketing and selling their finished products.

However, of equal importance is the ability for clients to be able to rely on a third-party supplier who understands the complexities of each brand and react accordingly, just as their own in-house facility would be able to.

But extended services of this quality and extent (especially during the recent very testing conditions) are not without additional cost in respect of extra labour, warehousing, and logistics. It is to be hoped that any inevitable associated price increases will be both understood and regarded as a wise investment for the continued and extended benefits they provide for brands and retailers in this permanently altered new terrain. After all, a good supply chain partner is for life…

Inescapably, 2022 will see a continuation in price hikes in labour rates, packaging materials, transport and warehousing. These can only be tackled effectively with a collaborative and a realistic approach to the world we are living in. A ‘marriage’ of interests is best achieved by being ‘engaged’ with your favourite outsourcing partner!

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