Archive for the ‘Strategic Sourcing’ Category

You can procure anything, including Candy Canes Part IV!

Monday, December 11th, 2017

 

Today’s post is from our SafeSourcing Inc. Archives

What does it take to make a candy cane, package it, market it, and distribution? All of these involve procurement. Today, the candy cane makes up a significant amount of the $1.4 billion Christmas candy market. In fact, billions of candy canes are made and consumed each year.

We have learned the history of the candy cane in part 1 and what ingredients are needed to make candy canes and how to procure the raw ingredients in part 2, and yesterday we learned how to make a candy cane and package it. Today we will cover how to market your product and how SafeSourcing can help you.

How to market your candy canes?

There are multiple companies out there who will help you in your areas of packaging, production and marketing. These companies can handle all of these areas in house for you or you can hire each area out individually. As with purchasing or procuring anything it is best to do your research.

Typically using a company who serves all your needs in house will be the most cost effective, however it is still worth running a request for proposal to find out who they are, who their current clients are, areas of service they can provide, examples of product they have created, a prototype of an idea for your product, their solution on how to market your product, and a pricing model. Even with this helpful tool, it is still beneficial to interview the company.

An in house company should be able to provide at a minimum:

Brand management:
o Data Management
o Project Management
Printer
Color Lab
Artwork
Proofing
Prepress
Brand Protection

In addition to having the best product, best packaging, and best marketing you need to have the basic business 101 logic to selling your product according toan article in entrepreneur.com

Get the correct buyer: One of your biggest challenges is finding the right buyer within a large organization, so do your homework. If you’re experiencing roadblocks, consider hiring a distributor or manufacturer’s rep who already has established relationships in your industry.
Be prepared: Develop a presentation and have professional-looking sell sheets ready. Your product should also have packaging that’s ready to go.
Know your target: Understand what products they already carry and how yours will fit in. Don’t waste your time pitching to a retailer who’s unlikely to carry your product.
Take advantage of special programs: Some mass retailers, such as Wal-Mart, have local purchase programs that give managers authority to try local items. And other retailers may have different initiatives, such as minority business programs.
Be patient: It can take up to a year or longer before you see your product on store shelves, so don’t get frustrated. And if the final answer is no, try to turn it into a learning experience.

Finally, remember there are other sales channels besides the traditional brick-and-mortar retail store. Catalogs, TV shopping networks and online stores can also be excellent methods to enable you to learn how to market a product online.

SafeSourcing, Inc. can help you source your packaging, production, and prepress services, create and run a Request for Proposal and compress the suppliers pricing by running a Request for Quote. For more information on how we can help you with your procurement needs or on our “Risk Free” trial program, please contact a SafeSourcing Customer Service Representative. We have an entire customer services team waiting to assist you today.

We look forward to your comments.

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You can procure anything, including Candy Canes Part III!

Friday, December 8th, 2017

 

Today’s post is from our SafeSourcing Inc. Archives

What does it take to make a candy cane, package it, market it, and distribution? All of these involve procurement. Today, the candy cane makes up a significant amount of the $1.4 billion Christmas candy market. In fact, billions of candy canes are made and consumed each year.

We have learned the history of the candy cane in part 1 and what ingredients are needed to make candy canes and how to procure the raw ingredients. Today we learn how to make a candy cane and package it.

How are candy canes manufactured and packaged from madehow.com

1. The first step of production involves blending the ingredients together in a large vessel. Typically, a stainless steel kettle is used that is equipped with automatic mixers. Ingredients can be poured or pumped into the batch by workers known as compounders. At this step, the water, sugar, corn syrup, and other processing ingredients are combined. They are then heated to over 300°F (141.5°C) and allowed to cook until they form amber liquid.
2. While it is still hot, the sugar mixture is poured on water-cooled tables. The candy cools slightly and is sent to the working machines. These devices are equipped with arms that stretch the candy repeatedly until it looks silky white.
3. While the candy is being stretched, a line worker adds the proper amount of flavoring. Also, coloring may be added at this point.
4. Another worker then takes a large portion (95 lb [43 kg]) of the warm candy and forms it into a loaf. Part of the loaf is put off to the side, dyed, and cut into strips. For the traditional candy cane, this portion is dyed red. It will become the red stripes in the final product. The 4 in-long (10 cm) red strips are then pressed at set intervals into the white loaf.
5. The loaf can then be sent to the extruder machines to convert it into a candy cane. The loaf passes through the extruder and comes out the other side on a conveyor as a long strand of candy. The strand runs under cutters that slice it at set intervals to produce individual candies. They are then passed through a device that bends the candy. Since the candy is still slightly warm it can still be shaped as desired. Some extruders can handle over 2,000 lb (907 kg) of candy an hour.
6. After the candy cane is formed, it is put into its packaging. Some manufacturers wrap the candy cane in a clear plastic. This is done right as it is exiting the extruder. The plastic is then wrapped around the candy cane and sealed by a heat sealer.
7. In most instances, a set amount of candy canes are collected and boxed in secondary packaging. These boxes are passed through a shrink-wrap machine and sealed. This extra layer of packaging ensures that no moisture damages the product. The boxes are then put into shipping containers, put on pallets, loaded on trucks, and delivered to stores around the country.

Quality control is an integral part of all candy production. The first phase of control begins with tests on the incoming ingredients. Prior to use, lab technicians test ingredients to ensure they meet company specifications. Sensory evaluations are done on characteristics such as appearance, color, odor, and flavor. Other physical and chemical characteristics may also be tested such as liquid viscosity, solid particle size, and moisture content. Manufacturers depend on these tests to ensure that the ingredients used will produce a consistent batch of candy canes.

The next phase of quality control is done on the candy cane paste. This includes pH, viscosity, appearance, and taste testing. During production, quality control technicians check physical aspects of the extruded candy. A comparison method is typically used. In this method, the newly made product is compared to an established standard. For example, the flavor of a randomly sampled candy cane may be compared to a standard candy cane produced at an early time. Some manufacturers employ professional sensory panelists. These people are specially trained to notice small differences in tactile, taste, and appearance properties. Instrumental tests that have been developed by the confectionery industry over the years may also be used.The process of making candy canes can be done on a much smaller level at home or in the instructions above on a large scale.

In the large scale, items to be purchased or procured would be the candy kettles, stainless steel tables, working machines, extruder, conveyors, cutters, plastic wrap machine, heat sealer, various types of cardboard, shipping containers, pallets and hand pallet jacks as well as fork lifts. In addition, you can procure hiring services of standard and seasonal workers, fork lift drivers and temporary delivery truck drivers, janitorial/sanitation workers, certified engineers and lab technicians and quality control supervisors.

SafeSourcing, Inc. can help you source your manufacturing goods and services, create and run a Request for Proposal and compress the suppliers pricing by running a Request for Quote. For more information on how we can help you with your procurement needs or on our “Risk Free” trial program, please contact a SafeSourcing Customer Service Representative. We have an entire customer services team waiting to assist you today.

We look forward to your comments.

Tomorrow we will discuss how to market candy canes and how SafeSourcing can help in this area.

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The Price of Dye in China

Tuesday, November 28th, 2017

 

Todays’s Post is by Eli Razov, SafeSourcing  Account Manager.

What are Leuco Dyes and how are the affecting millions across the globe? Right now the world is seeing huge increases in the thermal paper market. Leuco  dyes are made of many different chemicals which can combine  to achieve the desired color. These dyes have a colorless leuco form when crystalline or when in a pH neutral environment, but become colored when dissolved in a melt and exposed to an acidic environment. Lueco dyes provide little color when melted unless they are melted with one or more organic acids. These are called developers. One example of organic acid is Bisphenol A (BPA). These developers and Leuco dyes often mix poorly upon melting. A third chemical called a sensitizer is often added to the imaging layer to increase the effect. So what does this mean?

These are the components used to make thermal paper. The same paper you see daily from receipts at the local grocery store to fast food chains. The world thermal paper market is about one million tons annually, with about 2/3 of that tonnage for receipt paper. But right now, there is a major shortage in Lueco Dyes. This shortage is due to a company in China named Connect Chemicals which is responsible for 35% – 40% of global dye demand for thermal coaters. In September of 2017 the Connect Chemicals was shut down due to environmental reasons and China’s new anti-pollution laws. This spells disaster for retailers especially Going into the holiday season, which is the busiest time of year. Thermal paper pricing has seen an increase of over 20%-45%. This is making the demand outgrow the supply in many cases. Many major distributors have been unable to supply their entire current customer base and are preventing them from acquiring new clients.

There is hope because this shortage is estimated to be only roughly 3 months while Connect Chemicals closes to conform to China’s new environmental laws. This will take months to recover losses and hopefully set the market normal again.

For more information on how SafeSourcing can assist you or on our “Risk Free” trial program, please contact a SafeSourcing Representative we have an entire team waiting to assist you today.

We look forward to and appreciate your comments.

References —————————————————-

https://en.wikipedia.org/wiki/Thermal_paper

https://cohally.com/2017/10/05/largest-supplier-of-leuco-dye-shut-down-in-china-for-a-minimum-of-three-months/

 

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No Empty Chairs at the Table?

Thursday, November 9th, 2017

 

Today’s post is from our SafeSourcing Archives!

Many procurement professionals state they do not have a strategic role in board meetings or with major organization decisions. Why should a procurement professional participate in board meetings?

Companies that do not engage their procurement department early in the process are failing to make effective purchasing decisions, not fully leveraging their spend and economics of scale, and opening themselves to commercial risk. Procurement is usually brought into the process to either close a deal or execute the contract; at this point it is too late to add significant value.

Common issues corporations face when procurement has little engagement within the department:

• Spend is spread thin throughout multiple categories and suppliers.
• Process improvements (make vs. buy) are not always the ideal cost-savings decision
• Procurement policies are lacking – leading to no contracts, multiple price points, etc.

Handling these internal issues is not a day’s job. Procurement will need to monitor and track compliance with policies within departments. Departments that do not comply will be held accountable. Many times the CPO will need to become involved in this initiative to place more focus on the value of procurement.

In turn, this will also require procurement to refocus their efforts to include other value-added services to the departments besides simply reducing costs. However, this usually requires a change in culture, taking procurement away from the tactical, category-focused culture that dominates most functions, to one that is fully aligned with the company’s goals.

At SafeSourcing, we are an extension to your procurement department. We will work with procurement and other departments to help avoid the common issues when procurement does not have a chair at the table.  Please contact us in order to find out more.

We look forward to and appreciate your comments

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Automation and Innovation

Tuesday, October 24th, 2017

 

Today’s post is written by Ivy Ray, Account Manager at SafeSourcing Inc.

Improving the quality of processes and maintaining acceptable levels of performance quality, are critical factors in the success of any organization.  Considering that all processes need to exist to best serve the organization, it is important that all employees be challenged to find new and better ways of achieving the goals in a more efficient and efficient way.

The majority of businesses will be wiped out if they don’t abandon a fixation on status quo, because the environment of the future will demand a continuous rethink of processes, people, and technology. The future is being written before our eyes, and the use of automated processes is accelerating the rate of change in business to unprecedented levels. The key to survival and success is agility.

“Innovation is often viewed as the application of better solutions that meet new requirements, unarticulated needs, or existing market needs. This is accomplished through more-effective products, processes, services, technologies, or business models that are readily available to markets, governments and society”. (https://en.wikipedia.org/wiki/Innovation)

1) Automate Processes

  • • Build a culture around automation.
  • • Organizations that successfully utilize technology to support innovative approaches can save significantly on time and labor.
  • • Businesses risk becoming obsolete and bankrupt when they refuse to adapt.

2) Innovation

  • • You don’t have to be the one to create it.  Creating a better way of accomplishing a task is the beginning of innovation.
  • • Innovation has no end. What we want and what we need keeps changing.

3) Tools

  • • Search for tools that will help you accomplish your goals.
  • • Understand your long term plans and choose a tool that will grow with you.
  • • SafeSourcing has a suite of tools that are key to your sourcing needs.

“Technology will continue to become more powerful and easy to use and therefore more useful in driving effectiveness and risk management.” (https://spendmatters.com/uk/future-contingent-labour-predictions-trends/)

For more information on how SafeSourcing can assist you in exploring your procurement solutions for your business or on our “Risk Free” trial program, please contact a SafeSourcing Customer Service Representative.  We have an entire customer services team waiting to assist you today.

We look forward to your comments.

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Winter Parking Lot Maintenance

Friday, September 29th, 2017

 

Today’s post is by Troy Lowe; Vice President of Development at SafeSourcing.

It’s hard to believe but winter is just around the corner and with it comes the harsh conditions that can deteriorate your parking lot and driveways.  All of the harsh conditions such as rain, snow, ice and the chemical used to melt these conditions can take a toll on a poorly maintained area.  Make sure to keep the area clean.  This means removing any materials such as leaves, planting materials, rocks and gravel.  These types of materials can hold in moisture and may help cause early corrosion.  If there are any areas that contain chemicals such as oil, gas, or other liquids, make sure and use the proper cleaner to remove the stains.  Leaving these types of petroleum stains can damage the area even if they are seal coated.  Once the seal coating is damaged, water may be able to seep in through small cracks which will weaken the area and allow larger cracks to form.  If you do find that you already have small cracks while cleaning, then repair the cracks before further damage occurs.  Not repairing cracks will eventually lead to the development of pot holes which will be lead to more costly problems.  Once cleaned and repaired make sure that it is seal coated.  This should be done about every two to three years to help protect the asphalt from surface water, sun and harsh chemicals.  Below are some tips for keeping your parking lot well maintained.

➢ Routinely Inspect

➢ Keep it Clean

➢ Keep it Sealed

➢ Remove all Chemical Stains

➢ Look for Bad Drainage Areas

➢ Fill Cracks and Pot Holes

If you need help finding a licensed maintenance company to maintain your parking lot, feel free to contact SafeSourcing.   We can gather all the necessary information for you and help you decide which company meets your needs.  If you would like more information on how SafeSourcing can help you, please contact a SafeSourcing Customer Service representative.  We have an entire team ready to assist you today.

 

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RETAILERS! Clean out those back rooms and move your overstock items using a forward auction.

Monday, September 11th, 2017

 

Todays post is by Ronald D. Southard, CEO at SafeSourcing Inc.

Why is it that we never hear of retailers running forward auctions? There are dozens of sources waiting to buy your overstock which all retailers know will reduce shrink and improve bottom line profitability.

If you go to any internet search engine and type in the term overstock, the data returned is in the millions of pages. Many of these links are locations  for Business to Business (B2B) and Business to Consumer (B2C) companies that will gladly agree to participate in e-negotiation events in the form of a forward auction to purchase your overstock or liquidated products for resale through their on line offerings.

Online forward auctions are an ideal way to get the best price for capital equipment, materials, overstock and services you may want to sell, such as when you need to liquidate excess inventory.

There are two basic types of forward auctions. The first is a liquidation auction where sellers are reducing inventory from overstock or liquidation and buyers are seeking to obtain the lowest price for items they have an interest in for resale and other purposes. The second type is more of a marketing auction where sellers are trying to sell unique items and buyers wish to obtain unique items. This is typical of an eBay type of offering.

Much of retail shrink happens in the back room or receiving area of retail stores. It just so happens that this is also the location of much of the overstock in the retail community. Much of this product sits there month after month resulting in significant margin hits to quarterly and annual earnings and as such to a company’s stock price.

Ask your e-negotiation solution provider how they can help reduce your overstock and shrink with forward auction tools, and who they would invite as buyers. You company stakeholders will applaud your efforts.

For immediate help, please contact a SafeSourcing Customer Services Account Manager.

We look forward to and appreciate your comments.
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Here is some Lasik for retail e-procurement professionals in order to create better focus.

Monday, July 17th, 2017

 

Here’s and old post that continues to have merit with a link to another resource from FitSmallBusiness.com

Very often this author gets the question as to where to start in the e-procurement process. Too often I read that one needs to do a detailed discovery. The question is of what and how to get to the right place the quickest. So here is some Lasik for you that will help you see a little more clearly.

Using another idiom, and with renewed focus we hope to make it possible to see the forest for the trees by not focusing on excessive detail that is not needed yet.

There are four areas where you should begin your search for an e-procurement starting point and they are pretty simple.

1. Gross Sales
2. Cost of Goods Sold
3. Gross Margin
4. EBITDA.

This is really to say that if you take a look at your top line or Gross Sales and your bottom line or EBITDA and they are out of whack relative to your plan or industry averages you need to look at the above the gross margin line or Cost of Goods Sold or below the gross margin line which is expense related items for as an e-procurement focal point..

As such a couple of terms whose definitions you should be aware of are as follows.

According to two separate sources, Wikipedia and FitSmallBusiness.com  Cost of Goods Sold or COGS is a financial accounting  term which includes the direct costs attributable to the production or procurement of the goods sold by a company. This amount  can include the materials cost used in creating the goods along with the direct labor costs used to produce the m. It excludes indirect expenses such as distribution costs and sales force costs. COGS appear on the income statement and can be deducted from revenue to calculate a company’s gross margin.

Earnings Before Interest, Taxes, Depreciation and Amortization or EBITDA which is an approximate measure of a company’s operating cash flow based on data from the company’s income statement. EBITDA is calculated by looking at earnings before the deduction of interest expenses, taxes, depreciation, and amortization.

Based on the above a lot is determined by who built you annual plan and how realistic it was to begin with.

Tomorrow we will review what underperforming these measure means and how it should point you in the direction as to where to begin your e-procurement focus.

We look forward to and appreciate you comments.

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What is rPET?

Thursday, June 8th, 2017

 

Today’s post is from our SafeSourcing Archives.

RPET is recycled polyethylene terephthalate. When consumers recycle plastic bottles and packaging it can be cleaned and made into a federally approved material suitable for direct food contact applications. Below is a list of examples for reusing the material:

1. Beverage Bottles

2. Clam Shell Containers

3. Trays

The rPET is fully compatible with virgin PET and can be used for up to 100% rPET content.  There are numerous advantages for these second-life products listed below:

1. rPET bottles reduce the amount of waste taken to a landfill

2. rPET has a more stable price than virgin PET because it is not tied to the oil market

3. rPET improves society’s carbon footprint

The three advantages above give enough data to support the effort to change to rPET. Now, what do you need to know when sourcing these products? SafeSourcing is experienced in sourcing rPET packaging. Whether you are looking for private label spring water in six sizes or a clam shell container, we can help; we can work with your company to define your needs. In addition, we know which vendors are in the market and their offerings.

For more information on how we can help you with your procurement needs or on our “Risk Free” trial program, please contact a SafeSourcing Customer Service Representative.  We have an entire customer services team waiting to assist you today.

We look forward to your comments.

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Joe, Dirt, Java, Brew, Cuppa, Go Juice, Jitter Juice, Bean Juice, Brain Juice, etc.

Friday, April 21st, 2017

 

Today’s post is by Gayl Southard, SafeSourcing Administrative Consultant,

There are many names for coffee, with people making up their own pet names for the beloved brew. With the warmer weather approaching, iced coffee becomes very popular with the coffee-drinking crowd.  But why is iced coffee more expensive than hot coffee?  Depending upon where you buy your coffee, iced coffee can be as much as 60% higher than hot coffee.  A Starbucks grande cup of Nitro Cold Brew averages $3.60, much more than the company’s regular cold brew, which cost $3.25, and over a dollar more than a hot drip coffee of the same size.

Cold brew coffee is brewed with cold or room temperature water instead of hot water. The lower temperatures mean the extraction is slow and take hours to make – often half the day.  It also requires more coffee.  A standard water to coffee ratio might be 17:1.  For cold brew, it might be 4.5:1.  This coffee, labor and time simply make it a more expensive process.  What is left after this process is a concentrate that is cut down with water.  Other things to consider when ordering a cold brew is that plastic cups cost more than paper cups – also factor in the straws.  Ice is also very expensive.  “Ice is a fortune, Michael Pollack of Brooklyn Roasting company told Gothamist last year.  If you think we go through coffee fast, double that for ice.  We actually store ten gallon refrigerator boxes of ice because our needs are so tremendous.”1

SafeSourcing has a lot of experience sourcing coffee and coffee products. It is a category that is sourced regularly.  For more information on how SafeSourcing can assist you or on our “Risk Free” trial program, please contact a SafeSourcing Representative we have an entire team waiting to assist you today,

Resources:

[1] Ethan Wolff-Mann, Money, 5/31/2016

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