The Pros & Cons of Single-Sourcing Healthcare Packaging Materials

Healthcare packaging can be complex. Lengthy testing cycles for performance and product compatibility, stringent FDA regulatory specifications, risk mitigation, and other requirements make materials selection critically important.

To meet all of the parameters and still effectively manage supply chains, medical manufacturers traditionally used single-sourcing materials. Risks of using this practice were accepted, but perhaps the true impact was not fully understood until the pandemic-related upheaval.

Single-source suppliers were suddenly faced with limited or no stock, and medical manufacturers were left with no alternate resources. Lacking the ability to pivot during the crisis was costly — sometimes in exorbitant shipping expenses or materials costs, and sometimes in a loss of business that couldn’t be recouped.

That’s not to suggest that all single-sourcing decisions are ill-advised. In some cases, certain specialty healthcare packaging materials such as ionomers are only available through one or two suppliers. Being knowledgeable about the pros and cons of single-source materials and how to incorporate them into your larger healthcare packaging strategy will help balance reliance on them.

Pros: Single-Sourcing Suppliers Benefits

From an administrative and cost management standpoint, single-source suppliers provide several advantages:

1. Streamlined supplier qualification and supply chain management: There are simply fewer suppliers to initially vet and fewer supplier relationships to consistently maintain/supervise within the supply chain, which saves time and boosts operational efficiencies.

2. Preferred partnerships: Since suppliers are entrusted with exclusively providing manufacturers with material, there is an expectation that the partnerships take priority in terms of order fulfillment and timelines.

3. Potential volume discounts: The amount of material purchased through a single-source supplier partnership may trigger cost savings.

Cons: Single-Sourcing Suppliers Risks

For all of the benefits of single-sourcing, there are also some potential downsides, as recently experienced by industries around the world:

4. Supply and supply chain vulnerability: Anticipated or unanticipated, any disruption in packaging materials supply or supply chain management has consequences including higher costs for materials and shipping, distribution challenges, and extended lead times that could result in lost business.

5. Potential supplier inaccessibility: Single-sourcing can generate a false sense of security, especially in long-term partnerships. There are no guarantees; strategies and companies evolve and relationships can change over time with acquisitions and shifting priorities. Plus, any number of things could occur that renders a supplier inaccessible. If that happens, manufacturers are essentially returning to square one.

6. Quality control concerns: A single-source supplier means there’s only one chance at quality; all the quality eggs are in one basket, so to speak. If this one supplier experiences quality problems for any reason, including a change in ownership, quality control may slip through the cracks. This could leave manufacturers to deal with some — or all — of the fallout.

How a Vertically Integrated Packaging Partner Helps

Single-sourcing isn’t a new approach to packaging materials management, and it will continue to be an option — especially for specialty materials. Mitigating single-sourcing materials risks is a matter of balancing the pros and cons with the help of a vertically integrated packaging partner.

With global reach and strategic alignment of processes and innovation, Amcor is capable of comprehensive healthcare packaging materials supply, handling, design, and processing without putting healthcare manufacturers at undue risk. Vertical integration distinguishes Amcor as a preferred healthcare packaging partner that can deliver single-source solutions or orchestrate complex multi-source solutions in collaboration with healthcare manufacturers.

Single-sourcing presents both advantages and disadvantages for healthcare manufacturers. Working with Amcor can alleviate the concerns while moving toward an innovative solution. How can we take your healthcare packaging to the next level? Schedule a complimentary healthcare packaging needs assessment with the Amcor experts.