This is Lion
Dutch Lion (formerly Haagen) is a leading specialist in products for firefighter training and fire simulation. Originally, it is a family business with a great reputation in the fire department world. The Dutch branch is part of Lion Apparel Inc. of Dayton USA, also a family business, with over a century of experience.
Is in-house production of packaging lucrative?
Until 2014, Faes only supplied plastic cases with custom interiors to Lion. However, this was only a fraction of the total sustainable packaging needs that Lion needed to incorporate or protect its products. The vast majority of its packaging needs were met by purchasing separate cases, separate foam parts or cushioning parts, separate part components and separate assembly parts. In the same production department where fire simulators and smoke generators were produced, the cases were ‘assembled’ by production personnel. Probably once created as ‘stop work’ for the production department but by now long since a disruptive factor in their production efficiency.
More production through outsourcing non-core business
In 2015, initial discussions began with Faes for outsourcing the production of the above packaging. The reason and ultimate goal of these talks for Lion was to produce 20% more with the same number of FTEs. This allowed Lion to focus on its core business.
Business case based on packaging
On packaging, Faes then worked with Lion to prepare a business case. On the left are the current direct and indirect costs, including hidden costs. On the right are the prices if Faes were to manage the entire packaging policy. The balance was positive for Faes.
During the development of that business case, it was no longer just about packaging and costs, but also about added values, revenue models and trust. Only if there is sufficient trust can a close collaboration succeed. Both Lion and also Faes have been open in communicating with each other to achieve the set goals.
Great benefits for both parties
In this way, a model of cooperation was built for the future, offering many advantages for both parties. That’s what it was all about in the end!
Advantages Lion:
– One fixed point of contact and partner for packaging
– Stocks at Faes and no longer at Lion itself
– Deliveries just-in-time (JIT) and, in case of urgency, can be realized immediately
– Drawing management including revision management
– Hours free to scale up production of core products
A wonderful win – win situation and collaboration to build on for years to come!