Creating a Strategic Advantage Through Vertical Integration

Michelle MachenMauser News

Vertical integration is a key component of the Mauser Packaging Solutions Platform Optimization (MPO). Vertical Integration is a way to reduce costs and improve efficiencies by expanding our operations at varying points of the supply chain.

For Mauser Packaging Solutions, vertical integration is embedded within our closed loop business model providing us a competitive advantage over non-or lesser-integrated companies. Vertical integration allows for:

Control of supply
By generating our own raw materials (recycled pellets), transportation services, and manufacturing components, we become our own supplier. Competition with our competitors for materials, resources, and components are minimized.

Avoidance of suppliers with a lot of market power
A supplier with a lot of market power is able to dictate the terms of doing business. They control price, quality, and delivery times when there are limited supplier options. With vertical integration, we can lower cost and control the quality and delivery schedule of needed resources.

Lower manufacturing costs
Successful vertical integration eliminates, or greatly reduces, the cost of third parties to supply materials, parts, and transportation. As a result, the investment cost of manufacturing a product can be lowered allowing us to sell a product at a price lower than our competitors while maintaining a higher profit margin.

Next week we will look at specific examples of how vertical integration is used within our closed loop business model and how it enables us to provide unique quality and service to our customers.