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By policy, most American businesses evaluate potential new suppliers and determine the cost of raw materials through request for
competitive bids. This practice is as traditional as apple pie. However, the bid method can be a serious obstacle to identifying the best supplier and getting optimal prices. .To move to higher levels of profitability, corporations must adopt professional purchasing practices
based upon a better understanding of economics. When a company saves 10-30% on its purchases, these savings bring significant new profits to the bottom line. Historically, the corrugated industry does not
respond to the bid method by offering the lowest price. Where an existing supplier relationship is perceived, a prospective new supplier isn't going to underbid a competitor and attempt to steal an account. Often the
prospective new supplier understands that the manufacturer will not change suppliers anyway. The bid method not only fails to yield the best prices, it does not address the issue of identifying the supplier most
suited to serve a manufacturer's long term requirements. We provide programs based upon understanding of packaging economics and knowledge of corrugated manufacturing. Start with a review of packaging requirements.
This is more than a statement of current container sizes. Some products need more or different protection than others. Proper container specifications are based upon your product requirements as well as certain industry
cost factors. Precise manufacturing costs are calculated for each container. This process is scientific and analytical in nature. Next we determine the suppliers best equipped to manufacture your containers
and provide them to you at the right price and service levels. To implement the program, we help you sell the ideal supplier on a long-term relationship with your company. This part of the process is an art learned
through many years of corrugated industry experience. Unfortunately, the traditional reliance on the bid method results in the purchaser not knowing very much about packaging economics. Even companies purchasing
millions of dollars of corrugated containers do not know how to calculate the cost of a container. There is little knowledge of supplier manufacturing capability. The result is that corporations routinely pay 10-30%
more than is necessary, not buying from suppliers best able to serve their requirements. With huge potential savings why doesn't this situation change? The bid method and traditional ways of doing business get
in the way. Senior managers don't want to get involved with the details of purchasing. They delegate the work to purchasing agents and buyers but do not provide training in overall packaging economics. The purchasing
organization does not know how to calculate the costs to manufacture a container. and must rely on the bid method or an existing supplier with its own objectives not in the best interest of the manufacturer.
Purchasing executives know the feeling of helplessness when a supplier provides notice of a price increase. These same executives don't know how to regain control over the process. The solution has to start with a
policy change. Management has to put the bid method aside and encourage savings based upon real economics and skill." 4Corrugated.com is a service of McCoy Corporation, headquartered in Camarillo, California. The company, founded in 1963, works on your behalf to implement corrugated container cost savings and improved operations. The McCoy
programs are based upon a thorough knowledge of packaging economics and the skilled use of that knowledge. The company specializes in assisting high volume manufacturing companies. Thomas McCoy, founder and president,
learned the corrugated industry from the inside, holding positions in sales and general management. McCoy Corporation has served clients
in many product categories such as food, lighting, furniture, health and beauty aids and more for over 37 years. |
