Contract Packaging and its Implications on the Supply Chain - The Case of a Contract Packager

Research output: ThesisLicentiate Thesis


In trying to get products out to the market in promotional or display packaging,
companies have the option of turning to a contract packager. The purpose of this
thesis is to present the area of contract packaging, specifically discussing the
internal factors that make a contract packager an attractive actor to outsource
packaging of products to and also to find out how a contract packager can affect
the supply chain of the company outsourcing to such an actor. The questions
posed in this thesis are:
- When is it appropriate to outsource?
- Why is a supplier of contract packaging successful?
- How is the supply chain affected when outsourcing to a contract packager?
In addressing these questions a systems approach has been used, because a systems
approach allows the researcher to see properties of the whole, rather than seeing
the sum of parts as the collective properties of a system. The empirical data were
collected through a case study of one company performing contract packaging.
Literature was studied in the areas of outsourcing, supply chain/supply chain
management, third-party logistics and contract packaging.
Each of the questions posed was answered through the papers appended in this
thesis. The first paper uses complexity theory in order for managers to be able to
view outsourcing situations from a balanced perspective, providing guidance from
two important functions – relative power and interface complexity. The conclusion
reached in this paper is that in order for an outsourcing situation to be appropriate,
the outsourcing company, vis-à-vis the supplier of the activity/process, needs to
have high relative power while keeping interface complexity low.
The second and third papers discuss why a contract packager is successful and how
it affects the supply chain of the company engaging it. In reference to the contract
packager, it is ascertained that important activities to offer, besides the packing of
products, are design and manufacturing of packaging and warehousing of the
product of the customer. In using a contract packager, the company engaging it can
utilize certain characteristics of contract packaging. The characteristics displayed by
contract packaging are the “one-stop shop”, flexibility and warehousing. These
characteristics give an outcome in the supply chain that can be used by the
company to achieve effectiveness — from manufacturing of the product to the
delivery of the product in display packaging to the store. The company’s supply
chain is enabled to reduce uncertainty, reduce time-to-market of the promotions,
and increase responsiveness. The company can also realize other benefits including
consolidation of products and postponement of manufacturing of packaging and


  • Claes Wallin
Research areas and keywords

Subject classification (UKÄ) – MANDATORY

  • Other Mechanical Engineering


  • packaging logistics, outsourcing, packaging, suppy chain
Original languageEnglish
Awarding Institution
Supervisors/Assistant supervisor
Print ISBNs91-974611-8-0
Publication statusPublished - 2003
Publication categoryResearch