A guide to choose your B2B procurement supplier

A McKinsey & Company report revealed that companies with effective supplier relationships experience a 15% improvement in operational efficiency. However, when building these relationships with suppliers, businesses often overlook the role of packaging. It can have a bigger impact on supplier effectiveness than one would realise.

The significance of packaging in B2B procurement

Packaging is an integral part of the supply chain. From safeguarding items during transit to facilitating efficient warehousing, packaging ensures products reach their destination in pristine condition.

The quality of packaging directly correlates with the preservation of product quality and integrity. In B2B transactions, where large volumes of goods are involved, the slightest oversight in packaging can lead to damaged products, resulting in financial losses and reputational damage.

With customer satisfaction being the ultimate goal of any business, preventable losses due to packaging need to be addressed. A package that arrives intact and well-presented enhances the overall customer experience, contributing to satisfaction and brand loyalty.

The link between packaging and procurement success

Optimised packaging reduces waste, lowers shipping costs, and enhances storage efficiency, directly contributing to the bottom line. For example, a few years ago, Dell redesigned its packaging to be more compact and form-fitting which helped the company save over 49,000 pounds in packaging, and enabled it to fit 13% more laptops per pallet during shipping.

Efficient packaging also translates into streamlined transportation and logistics. Properly designed packaging can maximise space utilisation, reduce shipping volumes, and decrease the carbon footprint, aligning with the growing emphasis on sustainability in the business world.

As sustainability takes centre stage in corporate responsibility, the packaging's environmental impact becomes a critical factor in procurement decisions. Suppliers committed to sustainable packaging not only align with global environmental goals, but also meet the evolving expectations of environmentally conscious consumers.

The Internet of Things (IoT) offers real-time tracking, temperature monitoring, and other functionalities

How packaging reflects supplier capability

A well-designed packaging reflects a supplier's commitment to staying current and competitive. It showcases a forward-thinking approach to product delivery and hints at the supplier's ability to adapt to changing market demands.

A few years ago, PepsiCo’s Aquafina leveraged the capabilities of its suppliers to address environmental concerns and differentiate from competitors in the bottled water market. Aquafina partnered with NatureWorks to develop bottles made from Ingeo, a plant-based plastic alternative. This reduced their carbon footprint and positioned Aquafina as a sustainable brand.

Practices for maximising B2B procurement

Clearly defined packaging requirements should be an integral part of procurement specifications. This ensures that suppliers understand the expectations from the outset, fostering transparency.

Regular dialogue about packaging expectations, challenges, and innovations enables a collaborative approach to optimising the entire supply chain.

Supplier evaluation processes should include a thorough assessment of packaging capabilities. This integration ensures that packaging is a key criterion in selecting suppliers who contribute to overall procurement success.

Technology in packaging for B2B procurement

From automated packaging solutions to the use of data analytics for optimising packaging designs, technological advancements contribute to both efficiency and sustainability in the procurement process.

Recently, Carlsberg leveraged the latest in bottle cap design to develop the ZerO2 cap. The cap uses an oxygen scavenger liner which helps keep the beer fresher for longer. This reduces flavour oxidation, allowing the cap to perform up to 15% better than regular versions.

The industry is also being disrupted by the Internet of Things (IoT) which is paving the way for smart packaging solutions that offer real-time tracking, temperature monitoring, and other functionalities. This not only enhances supply chain visibility but also contributes to risk management and product quality control.

Predictive analytics can help forecast packaging needs, reduce waste, and enhance overall procurement efficiency

Future trends and considerations

The future of packaging is dynamic, with trends leaning towards sustainability, customisation, and digital integration. Businesses that anticipate and adapt to these trends will be better positioned to make informed decisions in supplier selection.

Artificial Intelligence (AI) and data analytics are also set to play a significant role in optimising packaging and supplier selection. Predictive analytics can help forecast packaging needs, reduce waste, and enhance overall procurement efficiency.

As governments worldwide emphasise environmental responsibility, regulatory changes pertaining to packaging and procurement are expected. Businesses must stay informed and adapt to comply with evolving regulations.

In today's dynamic B2B landscape, competitive advantage hinges on the approach to procurement, where every element - from raw materials to delivery - is optimised. Choosing the right supplier who has the right packaging prowess is is a strategic decision that can revolutionise the supply chain and propel businesses forward.

Varun Bothiyal, Senior Director, Moglix