Welcome To
The Bottom Line

In any aspect of business, achieving a sense of efficiency—balancing effort, time, and money to achieve the best outcome—is hard work. This is a particularly unique challenge for packaging and transportation. From excess headspace to improperly scheduled routes, to simply being unaware of emerging shipping and packaging solutions, it’s easy for a business to unknowingly lose thousands of dollars and valuable resource hours per year.

Remember the days when ecommerce was just starting out and online shopping was viewed as the green option? Rather than idling on gridlocked roads belching exhaust fumes en route to the mall, consumers could complete a few mouse clicks from the comfort of their desk chairs and merchandise would magically appear at their doorstep.

Those promises of convenience have largely played out; the environmental benefits are a murkier picture, however. Look no further than curbside on recycling day for evidence of this new shopping model. Increasingly, instead of 30 widgets packed in one box going to retailers, 30 separate boxes are going directly to consumers – even when consumers place orders for multiple items. Does the carbon footprint of added cardboard and bubble wrap outweigh the reduced auto emissions? The answer isn’t as tidy as initially thought.

Negotiating new vendor agreements might be the part of the supplier contract process that garners the most attention, but it’s the careful attention to detail after the contract is signed that promises will deliver hard-fought savings. We don’t mean to say that vendors are always looking to pull one over on you after you have signed on the dotted line. Honest, human errors do occur on both sides of the contract, and maybe more often than we’d like to think.

Potandon Produce is a powerhouse with a brand that continues to grow in more ways than one, making landmark partnerships and paving the way for businesses that will follow in their footsteps.

If your organization utilizes a strategic sourcing partner, that relationship should extend beyond ensuring the prices you pay vendors are consistent with what is being charged across the industry. A skilled sourcing expert can identify opportunities for process improvements that may have no influence on the invoice but will have a material impact on your bottom line.

In recent posts, we have offered words of caution concerning the perils of free money when considering a proposal, contract or addendum from a vendor. As part of our work, we are continuously monitoring the market to remain current on the trends that impact our clients. Lately, we have seen a real-time case study playing out in the market that reinforces why every proposed vendor contract amendment should be reviewed carefully.

It’s a business concept engrained into the American psyche to the point of cliché – cut out the middleman, and save money. Heck, “I Can Get It for You Wholesale” was a hit Broadway musical starring Barbra Streisand way back in 1962. And the premise makes sense on the surface – with one less mouth to feed in the food chain, there’s more profit left for those still in the mix, right?

If your organization utilizes a strategic sourcing partner, than that relationship should extend beyond insuring the prices you pay vendors are consistent with what is being charged across the industry. A skilled sourcing expert can identify opportunities for process improvements that may have no influence on the invoice but will have a material impact on your bottom line.

When it comes to maximizing business performance, the primary focus of any vendor management initiative is on cost savings. While the cost savings that can be realized with vendors are critical to an organization, there are associated process and performance benchmarks related to these contracts that can add additional value to the bottom line. 

This past September, the pulp and paper marketplace experienced its first price increase in nearly four years. Originally announced at $50 per ton, in October suppliers ultimately settled for a hike of $40/ton (roughly 6.5%, from $610 to $650/ton) after weathering some customer pushback. For most users of liner board, this translated to a 6-8% rise in their material costs. For those operating without long-term contracts, the increases were higher.