Optimizing Global Packaging: Cost-Cutting and Outsourcing Strategies

Role: Project lead for Balance bpo and ai roll-out

Industry: Packaging industry with global presence

Situation:

This Company has to cut costs within the organization. Therefore there was an Initiative initiativ to Analyse, what from the existent Shared Service Center can be Outsourcing, what can be Automaten and what Else could be consolidated or Even outsourced. Chancen are high, Standards are missing at One or the other Locations.

Question to Marcus:

“

I Need Template, roadmap for an offer as Consultant.

Business Process Outsourcing

Begin with a granular TCO and capability map of SSC activities by process (AP, AR, payroll, procurement, customer service, master data, labeling/artwork approval). For packaging, prioritize functions with high transaction volumes and low product-specific complexity (invoice processing, labels templating, order-to-cash exception handling, routine vendor onboarding).

For each candidate, document variability across plants (local tax, language, artwork/regulatory requirements) and classify activities as standardizable, partially standardized, or non-standard. Build vendor selection criteria that weight (a) global delivery scale and multilingual capability, (b) domain experience in CPG/packaging (artwork/reg compliance), (c) data security and onshore/offshore mix for regulated markets, and (d) proven transition playbooks. Structure contracts with outcome-based pricing (per-transaction + gainshare for automation savings), clear SLAs tied to quality (error rates for labels, invoice exception rates), and ramp-down clauses for retained strategic tasks. Pilot outsourcing a high-volume, low-complexity cluster (e.g., AP across several EMEA sites) to validate processes, data flows, and governance before scaling. Ensure integration requirements (ERP, PLM, DAM systems) and local statutory reporting are explicitly in scope. Use the pilot to baseline KPIs and refine the pooling strategy for shared services consolidation vs. full externalization.

Make or Buy

Apply a decision framework combining strategic importance, variability, transaction volume, cost delta, and control/risk (data privacy, regulatory compliance, IP). For packaging, functions tightly coupled to product differentiation—artwork ownership, quality validation, new-product introduction workflows, contract manufacturing coordination—often demand retained control or close co-sourcing; transactional work with predictable rules (PO-to-pay, standardized master data updates, routine customer queries) is a strong buy candidate.

Quantify costs including transition (knowledge transfer, severance, vendor onboarding), ongoing governance, and technology investments (RPA/AI). Model scenarios with sensitivity to labor cost arbitrage, automation maturity, and vendor rate escalators; include service reliability and single-vendor concentration risk. For hybrid choices, define clear boundaries via SLA-driven interfaces and use RACI to lock responsibilities. Consider "nearshore" for markets with regulatory/language needs and fully offshore for back-office tasks. Use a two-stage approach: standardize then decide—first reduce variability and create standard work; then recompute make-or-buy economics on the cleaned baseline. Document an exit/playback plan to mitigate vendor lock-in and ensure business continuity for critical SKUs and customer contracts.

Robotic Process Automation

Treat RPA/AI as an acceleration layer for SSC optimization, not a standalone cure. Identify high-frequency, rules-based processes across finance, procurement, and customer service—invoice capture, three-way match exceptions, bill-of-material updates in ERP, label template generation, and order status reconciliation—for rapid automation.

In packaging, include vision-based checks for artwork versioning, label compliance verification, and image-based QA where applicable. Prioritize automations with clear ROI: high volume, low exception rate, stable rules, and accessible data. Ensure upstream standardization (data formats, naming conventions) because RPA is brittle against inconsistent inputs prevalent across global plants. Use a selective pilot combining RPA bots and ML/NLP for semi-structured documents (purchase orders, local tax invoices) to reduce manual touchpoints before full rollout. Build a Centralized Control Room in the SSC to monitor bot health, exceptions, and continuous improvement. Include governance for change-control, bot ownership (process SME vs IT), security credentials, and regular bot revalidation as SKUs and templates change. Track bot-level KPIs (bot uptime, exception rate, cost per transaction) and realize savings as redeployment of FTEs to higher-value tasks like exception resolution and continuous improvement.

Target Operating Model

Design a target operating model that reflects a global packaging footprint: centralized governance with regional execution hubs, clear process ownership (end-to-end), and standardized service catalog with modular offerings (e.g., basic AP, enhanced AP+automation, co-sourced artwork services). Map processes to locations using a “what stays local / what centralizes / what outsources” logic driven by regulatory needs, time-zone/SLAs, and language.

Define technology stack standards (ERP instance strategy, integration middleware, DAM/PLM for artwork, workflow engines, RPA/AI platform) and required APIs for integration. Establish a global-to-local governance layer: global steering (strategy, performance), regional COEs (process improvement, automation deployment), and site service managers (local compliance, escalation). Include a migration blueprint with phased waves by process and geography, capacity plan for transition, and clear KPIs per layer (cost per transaction, turnaround time, quality). Ensure the TOM addresses data residency and regulatory compliance differences between jurisdictions (EU vs APAC vs Americas) and embeds continuous improvement loops to reduce future variability.

Standard Work

Standard Work is the precondition for scalable outsourcing and automation—without disciplined, documented processes the SSC or vendor and bots will reintroduce variation. Create a template for standard operating procedures (SOPs) that includes purpose, step-by-step tasks, inputs/outputs, system screenshots, acceptance criteria, exceptions and escalation paths, and performance targets.

For packaging-specific tasks, standardize nomenclature for SKUs, label templates, version control, and regulatory checklists to avoid costly reworks or market non-compliance. Run rapid standardization workshops on cross-site best practices: consolidate differing local practices into global minimum standards and capture justified deviations with TTLs. Tie operator checklists to digital workflows and use standard work to train vendors, bots, and temporary teams during transition. Measure adherence (process compliance %) and link deviations to root-cause analysis. Standard Work reduces onboarding time, improves automation success rates, and forms the baseline for continuous improvement and scorecards in vendor SLAs.

Process Mapping

Start with value-stream mapping across the end-to-end flows that are high-cost or high-variability: procure-to-pay, order-to-cash, SKU onboarding and artwork approval. For packaging companies, map touchpoints involving PLM/DAM/ERP, external suppliers (contract manufacturers, co-packers), and regulatory sign-offs since these are frequent bottlenecks.

Use SIPOC and swimlane maps to identify handoffs, decision points, rework loops, and data owners. Prioritize mapping to expose root causes of location-level divergence—local tax rules, multiple ERP instances, manual rekeying of label specs—and quantify their impact on cycle time and error rates. Combine process maps with transaction analytics (process mining) to validate actual flows vs designed processes. Deliver a concise remediation backlog: quick wins (eliminate duplicate data entry, centralize template libraries), medium-term (consolidate ERP instances, implement RPA), and strategic (centralize master data and artwork governance). Process maps should drive both the outsourcing scope and automation candidate list; without them, vendors and automation will underperform.

Business Case Development

Build differentiated business cases for each recommended wave (outsourcing, automation, consolidation) with base, conservative, and aggressive scenarios. For packaging, include hard benefits (labor arbitrage, FTE reduction, transaction cost per invoice, reduced rework rates) and soft benefits (faster time-to-market for SKU launches, fewer compliance incidents, improved customer SLAs).

Capture full transition costs: vendor procurement, contract legal, data migration, training, redundancy, change management, and technology investments (RPA licenses, middleware). Model benefits timing—automation yields quick run-rate savings but requires up-front standardization investment; outsourcing shows steady savings but longer ramp. Quantify risk-adjusted NPV and payback and include KPIs for performance governance (cost per transaction, SLA adherence, error rates, time-to-publish label). Present alternative scenarios: retain and automate vs outsource and automate vs hybrid. Include a sensitivity analysis for labor inflation, vendor performance variance, and automation success rates. Conclude each case with a clear decision checkpoint and go/no-go criteria for piloting and scaling.

Change Management

Change Management must be front-loaded: standardization, outsourcing, and automation all create role shifts and capability gaps across global sites. Map stakeholder groups (site operations, plant quality, SSC staff, procurement, legal, IT) and define tailored communications and training plans.

In packaging, emphasize impacts on plant-level roles that touch artwork and regulatory compliance—reassure with retained control mechanisms and co-sourced processes where needed. Run role-mapping workshops to redeploy displaced FTEs into higher-value activities (exception handling, quality assurance, continuous improvement) and include retraining pathways that cover new tools (RPA dashboards, vendor portals, PLM). Use a “pilot to scale” approach with visible local sponsors and quick wins to build momentum; publish regular KPI dashboards and success stories to counter resistance. Establish feedback loops from operations into the project to capture unintended issues (local regulatory nuances, customer complaints) and iterate SOPs. Finally, include a labor relations plan to manage potential severance, transfers, and local works council requirements in different jurisdictions.

Center of Excellence

Centralize expertise in a Center of Excellence (CoE) responsible for process standards, automation development, vendor management best practices, and continuous improvement. For the packaging sector, the CoE should house domain SMEs for artwork/label compliance, PLM/DAM integration specialists, RPA/AI engineers, and commercial vendor managers.

The CoE governs the process library, oversees pilot selection and scaling, enforces test and change-control standards, and maintains the automation pipeline. Define service catalogue for the CoE: intake for automation requests, runbooks for vendor transitions, training curricula, and audit routines. Operate the CoE as a shared-services internal vendor—chargeback showed as a line-item—so regional sites see it as enabling, not overhead. Measure CoE impact through deployment velocity, automation ROI, reduction in vendor escalations, and improvements in cross-site standardization. Ensure the CoE has a clear escalation path into executive steering to resolve funding or local compliance conflicts quickly.