The PowerPoint content focuses on capital investment strategies between Consumer Packaged Goods (CPG) companies and External Contract Manufacturers (ECMs). It outlines input from F4SS members and discusses factors influencing investment decisions, such as relationship maturity, ownership considerations, and cost-sharing models.
Key topics include:
- Relationship Maturity: Trust and length of agreements between CPGs and ECMs significantly influence comfort levels in investment commitments.
- Ownership Strategies: Considerations for whether the CPG or ECM owns capital equipment, including proprietary technology, funding capabilities, and transfer potential.
- Investment Approaches: Models for capital sharing:
- CPG-funded: Full investment by the CPG, equipment used exclusively for CPG products.
- Shared funding: Costs and ownership are divided, with priority given to the CPG for usage rights.
- Supplier-funded: ECM funds the investment, with built-in tolling costs or leasing models for recouping expenses.
- Automation & Innovation: Emerging automation models, such as "pay-by-motion" terms, which reduce initial outlays and align payments with usage, and increasing affordability of cobots (collaborative robots).
- K-C Case Study: An example detailing Kimberly-Clark’s (K-C) framework for asset ownership, tax implications, spare parts strategies, and maintenance management when equipment is located at an ECM.
This material provides practical guidance for enhancing collaboration and reducing risks in capital investments between CPGs and ECMs. Let me know if you'd like additional details!