Customer Commentary (CONT’D FROM PAGE 24)
Delivering ultra-high performance S-Board ™ liner and medium grades and world-class technical service. Bonus: those boxes make really awesome places to play
Having this type of relationship means—in some cas- es—that a supplier is asked to work with other suppliers and customers to bring the best value for each party. This is a process that many aspire to, but few achieve. It’s hard work and time-consuming. However, it’s a relationship in which the value created from the buyer-seller alliance exceeds the value potential of negotiating a traditional “arm’s length” transaction. It’s an alliance in which the goal is to maximize quality and minimize the cost of a value chain through sharing of infor- mation, resources and effort. It is said that there are three phases of supply chain management. The first phase is price based. We believe that in this phase, you can reduce costs through an organized purchasing effort. In phase two and three varying degrees of trust and the associated benefits that supplier and customer offer can bring their organizations a competitive advantage. As the buyer-seller relationship matures and moves into the advanced phases, there will be additional bene- fits achieved. That can be obtained through total cost and price negotiations. The benefits for our company are numerous. Quality of the product is at the top of that list. We now use a box that is 50 percent stronger than it was a few years ago, without adding material or cost. Also, boxes were consistent, with no warp in both size and graphics. Prior to our alliance, this never happened. We had inconsistent quality in the industry. Today, it is the best. What is that worth? I don’t have the answer. Howev- er, we learned how to maintain quality and a square box. We standardized physical aspects of the paper and devel- oped appropriate handling standards. Now, our custom- er complaints due to poor packaging are almost non-ex- istent. Our customer retention, growth and relationships have improved. Is this the result of better packaging? Not all of it, but some of it. Our relationship with ACC continues to mature. Val- ue-based activities are occurring. Benefits such as inven- tory management, equipment expertise, such as a new Apstar rotary die cutter just installed by ACC, process im- provements, waste management, and SKU reduction are shared between both parties. This is a benefit derived from phases two and three of supply chain management. Lesson learned: Boxes aren’t necessarily always the same quality, price and service. They are often just similar. The Coronavirus Price Increases There has been a price increase announced for corru- gated containerboard by the end of 2020. Ultimately, the market will determine whether the in- creases will be implemented fully. Independents are wary of increasingly concentrated pricing power, first for their own ability to profitably serve their customers, and second on our industry’s user-base which is continually looking to reduce its packaging costs and use.
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SPECIALTY FOLDER GLUERS • OPERATOR TRAINING • REBUILDS & RELOCATIONS • RECONDITIONING in Kenosha • PARTS & MACHINE REVIEWS • GUARANTEED IMPROVEMENT TOROSIANTECH SERVICES INC. Training and Reconditioning Center 930 Tenth Street • Racine, WI 53403 (800) 555-5876 (U.S. only) Phone: (262) 633-5133 • Fax: (262) 633-5176
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October 19, 2020
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