The medical packaging market is forecasted to grow at a CAGR of 6-8 until 2024. Increasing life expectancy rates globally are creating scope for companies operating in the pharma and medical packaging market. The growth of the pharmaceutical, biotechnology, and health science industries substantiated by the incremental spend in the development of newer drugs is further expected to drive the growth of the market.
However, there is more to medical packaging, as it involves many disciplines involving material manufactures, device manufacturers, material converters, educational institutions, package testing facilities, and test equipment and medical packaging equipment manufacturers. The strict quality and regulations governing medical materials have forced companies to ensure the quality of their processes and on-demand availability. Medical packaging companies are required to manage inventory in-house to ensure the implementation of GMP (Good Manufacturing Practice) and GDP (Good Distribution Practice).
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Analyze prices
Companies in the medical packaging market must understand the price behaviors of underlying raw materials and intermediates that influence the costs of packaging materials. They should consider shifting their production bases to reduce costs while assuring quality, capacity, capability, financial viability of suppliers and supplier assurance.
Purchase timing
This is another crucial aspect that companies need to cover while sourcing medical packaging materials. They must determine the right time for sourcing after analyzing inventory levels and the demand-supply scenario for raw materials and intermediates. The lead time with suppliers should be negotiated to less than 10 working days to provide the material in reduced timelines for repeat orders. However, for new products, lead time should be additionally factored to enable suppliers to create master designs and obtain approvals from the concerned authorities.
Assess suppliers
Suppliers are generally classified based on category attributes (i.e., strategic, and critical items). Strategic and non-critical items bring asymmetric relationship and the buyer is confined to a limited number of suppliers due to the strategic nature of the item. Hence, working closely and collaboratively with suppliers is paramount to ensure that value for the supplier translates into value for medical packaging companies(buyer) as well. Improving the sourcing process and validating purchase requisitions can be one of the few ways that companies can adopt to reduce transactional processing time and inventory carrying costs.
Inability to analyze suppliers can make it difficult for companies to minimize inventory costs. Give SpendEdge a try by requesting a free demo of our procurement platform and gain exclusive insights regarding suppliers in the medical packaging market.
Sourcing process
The sourcing of the medical packaging materials can be performed in three steps. First, Request for Information (RFI) for a new product line or medical packaging design for an existing product. Second, perform a trial run using the packaging material for quality assurance. Third, analyze the cost break-down structure of the packaging material and negotiate prices. Conduct negotiation via the routes of Online Static Negotiation (Rfx), Online Dynamic Negotiation (Reverse Auction), or a combination of both to arrive at the right price.
