Today’s post is our SafeSourcing Archives

Managing your freight/shipping lanes is a complex process.  There are so many factors that must be taken into account.  Even then, when you have gone through all of the analysis and created projection models and spreadsheets you are still left at the mercy of weather, sales increases and declines and, of course, any possible factor that could influence the price of oil.

Because this last item represents up to 35% of a carriers charge to you, it is one that many companies take very seriously and invest great amounts of time and money in order to help them control.  Some companies take the approach of locking a fuel rate into their cost for as long as they can to help protect against increases.  Many other companies have negotiated their base rates and keep the fluctuations of fuel separate, with controls placed around the formula used to calculate it. Today we will be looking at the pros and cons of both the Fuel-In and Fuel-Out methods.

Fuel-In – Fuel-In strategies are founded on having a final complete rate inclusive of fuel costs.  This is nice for companies who want a fuel cost method that is easy to manage, because the cost of each shipment for the negotiated period should always be the same.  Typically this method will either be re-negotiated at pre-fined intervals, or tied to an oil/fuel related index with language to cap how much the rate can increase or decrease.

While this strategy can be used to help protect a company during periods of time when fuel prices are rapidly increasing, it usually leads to higher overall rates for each negotiated period.  Without the flexibility to adjust with the average cost of fuel, vendors will generally error on the side that protects themselves and deliver higher than normal rates in their proposal.

Fuel-Out – Fuel-Out methods usually include a fuel surcharge that is based on some pre-defined fuel index such as the commonly used U.S. Department of Energy National Fuel Average price.  Using the agreed upon price, most formulas will subject a “trigger” amount which is the rate of fuel above which carriers begin to include the surcharge.  Typically this rate will be between $1.20 and $1.25 per gallon.  This amount is subtracted from the average fuel price and then divided by an agreed upon Miles Per Gallon rate (usually 5 or 6 MPG) which leaves the surcharge per mile charged.

Although this means that the price of shipments can fluctuate more often and that companies aren’t protected against a dramatic increase in fuel like the Fuel-In method, they will be able to take advantage of decreases in fuel that the method above doesn’t always allow.  The other advantage with this method is that it allows companies to get much more competitive base rates from carriers who know their fuel costs will be allowed to adjust the changing costs of fuel.

For more information about how we can assist with sourcing your freight lanes, please contact a SafeSourcing Customer Service Representative.

We look forward to your comments.

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.

What raw materials are included to make candy canes from madehow.com

Confectioners have steadily refined candy cane recipes and production methods. By incorporating new information about the characteristics of ingredients and food production processes, they have been able to make candy cane manufacturing an efficient process. The raw materials used to make candy canes are specifically chosen to produce the appropriate texture, taste, and appearance. Sweeteners are the primary ingredients, but recipes also call for water, processing ingredients, colorants, and flavorings.

Candy canes are primarily made up of sugar. When sugar (sucrose) is refined, it is typically provided as tiny grains or crystals. It is derived from beet and cane sugars. The sugar used in candy cane manufacture must be of high quality so that the proper texture and structure will be achieved. It is the unique physical and chemical characteristics of sugar that makes formation possible. When sugar is heated, it melts and becomes a workable syrup. The syrup can be manipulated, rolled, and fashioned. As it cools, the syrup becomes thicker and begins to hold its shape. When the candy is completely cooled, the sugar crystals remain together and form the solid candy cane.

Corn syrup is also used to produce candy canes. It is a modified form of starch, and like sugar it provides a sweet flavor. When it is mixed with the sugar, it inhibits the natural tendency of sugar to crystallize. Crystallization would result in a grainy appearance and a brittle structure. Corn syrup has the added effect of making the sugar concoction more opaque. Without the corn syrup and other ingredients, the candy would be transparent. The corn syrup also helps to control moisture retention and limits microbial spoilage. Beyond sugar and corn syrup, other sweeteners are sometimes incorporated into the candy cane recipe. These may include glucose syrups, molasses, or other crude sugars. Some low calorie candy cane recipes may incorporate artificial sweeteners like aspartame.

Certain ingredients are put in the candy cane recipe to aid in production. To dilute the sugar and make it workable, water is used. During the manufacturing process the water is steadily boiled off, and the end product has much less water than what it started with. Another processing ingredient is cream of tartar. This compound has the effect of producing air bubbles that help expand the sugar loaf and make it more stable. Salt also helps to adjust the chemical characteristics of the syrup. Typically, a small amount is used so that it is undetectable in the final product.

A variety of other ingredients may be incorporated into a candy cane recipe to produce various effects. To give the candy flavor and color, wintergreen or peppermint oils are added. Other natural flavors obtained from fruits, berries, honey, molasses, and maple sugar have also been used in candy cane production. Artificial flavors have also been added to improve taste. Additionally, fruit acids like citric acid and lactic acid can be added to provide flavor. Artificial colors such as certified Federal Food, Drug, and Cosmetic Act (FD&C) colorants are used to modify the color of the final product. In the United States, the federal government regulates these colors and qualifies each batch of colorant produced by the dye manufacturers. This ensures that no carcinogenic compounds are added to food products.

Sugar is a commodity that has a price index that fluctuates with the market increases and decreases. As of December 6, 2013 the market is down -0.10 bring the price per pound to $16.59 per the Sugar, Free Market, Coffee Sugar and Cocoa Exchange (CSCE) contract no.11 nearest future position, US cents per Pound.

Manufactures of candy canes can source their sugar directly from manufactures or wholesalers. This can create extra spend or savings depending on which source you purchase from. Typically through distributors and wholesale companies, there is additional shipping, handlings, and middle man fees included in the purchase price.

Whether you have been purchasing from the same source for years or you are just starting your business, running a Request for Proposal will help you understand who the companies are, where they source their sugar, what their pricing structure is, what price index they use (this will help you determine historically any increases or decreases), and any additional fees they may include.

SafeSourcing, Inc. can help you source your goods, 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 make candy canes and package them and how SafeSourcing can help in these areas.

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

Winter is quickly approaching and it is time to start getting your vehicles ready for the harsh weather.  One thing that always seems to get me every year is lack of windshield washer fluid.  You’ll be driving along on snowy day and the salt and water from the road splash up.  You turn on the wipers only to realize it smears on the windshield causing next to zero visibility.  Washer fluid is definitely needed to remove this kind of grime.  Make sure to keep an extra container available in the vehicle.  When purchasing windshield washer fluid, make sure to get an all-season washer fluid so that it does not freeze during the frigid temperatures.  While you’re at it, go ahead and check the washer blades for wear and tear and replace as needed.

If your battery is a few years old, it would be a good idea to have it tested.  Colder weather is much harsher on a battery and a weak battery can become a dead battery very quickly.  Take a look at the terminals and remove any corrosion to ensure a good connection.

If you have not had the coolant changed according to the manual recommendations, you may want to consider a flush and fill.  If the maintenance is up to date, you should still check for leaks, check the coolant level, and top it off if needed.  This is very crucial because the coolant, also called antifreeze, keeps the engine from freezing during the cold temperatures. Another important item to check is the tires.  Worn tires are very dangerous during the winter months.  Make sure that the tread is fine and that there is no uneven wear.  Check the tire pressure and make sure that it is set to the manufactures’ recommended pressure.  This is important and should be done about once a month.  While you’re doing this, do not forget to inspect the spare tire as well.

You may also want to consider keeping a survival kit within the vehicle in case of breakdowns.  This should consist of items such as blankets, flares, gloves, flashlight, first aid kit, jumper cables and cell phone charger. Driving in the winter is much more dangerous. To keep things safe, you may also want to inspect these other things as well:

• Brakes
• Lights
• Oil
• Filters
• Heater and Defroster

If you need help finding a licensed maintenance company to maintain your vehicles, 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.

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

Finding the right forklift for your operation can be a challenge. You may have a good idea of what your capacity needs are, but there are many options from which to choose. How do you select the best piece of equipment that fits your needs and your budget?

• Electric forklifts are clean, quiet, compact and nimble with charging constraints.
• Gas forklifts are best performers and have indoor/ outdoor flexibility.
• Diesel forklifts are best outdoors and cheap to run.

Electric

Battery electric forklifts are the most environmentally friendly, and quiet. They are fume free in operation, giving off no harmful emissions. Powered by large, heavy lead-acid batteries, electric lifts typically provide enough power for one standard eight-hour shift or about 5 to 6 hours of continuous use. One of the main disadvantages is that electric fork lifts are not really suitable for prolonged use outside in wet weather, because the damp atmosphere cause problems with wiring circuitry and electrical components. The two biggest advantages to this system are that it produces zero emissions, a necessity if the lift is operated indoors, and is highly economical in terms of fuel.

Internal combustion

Internal combustion (IC) engines run on a variety of fuels including gasoline, diesel fuel, liquid propane gas (LPG), or compressed natural gas (CNG). The main benefits of an IC forklift are the ability to operate them in any environment, a far greater capacity for weight (120,000 lbs. for diesel vs. 12,000 lbs. for an electric), and the ability to be refueled on the fly. They also have a slightly higher reach, usually capping out around 36 feet in comparison to electric lifts that typically don’t go higher than 30 feet.

Their upfront price is the inverse of electric, making them initially cheaper than electric models, but they cost more per hour to run. In fact, you can plan on paying about $30 to fill a 7-gallon diesel tank and $25 to $35 to fill a 33-lb propane tank. If you refuel the tanks twice a day, this equates to a yearly fuel cost of $1,500 for electric, $15,000 for diesel, and about $12,500 for propane.

Dual fuel – a happy median

With the cost of diesel rising, dual fuel engines are becoming the preferred engine type for forklifts and similar industrial equipment in the United States. Comparable in terms of output to single-power options, they provide the cost-saving ability to combine gas and liquid propane or diesel and electric operation, switching between the two modes when power needs change.

In addition to the cost-saving benefits achieved through fuel conservation, dual fuel systems do not require spark plugs or an ignition system, eliminating a good chunk of the maintenance associated with traditional IC engines and boosting overall ROI.

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.

Resources—————————————————

http://www.bendigomitchell.com/kb/forklift-power