16 April 2008 17:44 [Source: ICIS news]
ORLANDO, Florida (ICIS news)--Major personal care companies are relying more on contract manufacturers to strategically manage their supply chains, an industry executive said on Wednesday.
“Outsourcing manufacturing has become imperative to meet the shifting demands of the market as personal care companies increasingly focus on brands,” said Dave Hempson, senior vice president of business development for US-based personal care contract manufacturer Marietta.
Hempson spoke at the SODEOPEC Soaps, Detergents, Oleochemicals and Personal Care conference in ?xml:namespace>
He noted the growing collaborative relationship between consumer products goods (CPG) manufacturers and contract manufacturers. Several CPG companies over the past years are already giving up their manufacturing capabilities, Hempson said, as they focus more on developing new products.
“Contract manufacturers are evolving to more than just the traditional tolling capacity. Contractors are now providing personal care companies innovation, flexibility, international access and speed-to-market for their products,” he added.
The CPG industry’s need for outsourcing is expected to expand as the trend towards globalisation, constant change in government regulations and demand for innovation continues.
Key companies such as Procter & Gamble, Unilever, and Johnson & Johnson formed last year a non-profit organisation called Foundation for Strategic Sourcing (F4SS), which is expected to further cement the relationship between CPG and contract manufacturing industries, said Hempson.
“The trend for outsourcing is going to continue. CPG companies see the benefits in contract manufacturing and want a robust industry. The foundation will play a big role to make that happen,” Hempson said.
The three-day conference, which is hosted by the American Oil Chemists Society (AOCS), ends on Wednesday.
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