Co-packing is the process of packing products together to create a shelf-ready product for the retailer to sell.Services from specialized co-packing providers can be quite extensive, from designing the packaging (whether that be blister packs, shrink wrapping, liquid dispensing packaging, etc.), to laminating, folding flyers, printing and attaching labels or barcodes to products, dry/liquid filling, or kitting.
Co-packing is a useful tool not only to increase product and brand visibility for existing products, but can also help to push a new product forward.Hypermarkets selling general merchandise are the biggest consumers of co-packing , but co-packing is also widely used in many verticals such as beauty and cosmetics, medical and pharmaceutical, and the food and beverages industries.
It is a good reason for the use of co-packing, but it is a mixed blessing as far as the supply chain is concerned. While it does have its benefits, it also creates analytical difficulties related to inventory replenishment, both at the store level and at the warehouse level. Ideally, co-packing should be balanced so that all the products go out of stock around the same time, and the copack structure can be removed from the store at the end of the sale or season. If managed properly, co-packing can lead to significant cost savings for a company.
Learn more in the entry Co-packing of the Lokad knowledgebase.