Is VMI Right for you?

So, what is VMI?  VMI, or Vendor Managed Inventory, is a collaborative approach between the buyer and seller of goods to manage the buyer’s inventory levels.  Traditionally, the transactional relationship between the buyer and seller is that the buyer would send a purchase order to the seller stating the product(s) the buyer wishes to purchase, the quantity of that product(s), the unit or lump sum price for that product(s), the ship-to address information, and any other information that the buyer deems necessary to communicate in order to complete the transaction.  The seller would then process the order on their end, and the product(s) would be scheduled to ship to the buyer.  The VMI approach is more of a partnership arrangement between buyer and seller, with freer flow of information and a level of shared responsibility.

Objectives of a VMI Program

Aligning business objectives of both the customer (buyer) and supplier (seller), while optimizing the supply chain efficiency, are the core goals of any VMI program.  By accomplishing these goals, both the customer and supplier can expect increased profitability to their perspective companies.  In addition, both companies benefit from the transparency of information.  With improved information flow, both companies can move from a customer/vendor relationship, where one side typically benefits from the relationship more over the other, to more of a partnership, where both parties realize added benefits from the business relationship beyond the mere transactional one.

Pros for the Buyer

The customer can expect several desirable outcomes as a result of this joint effort.  First, a reduction in standing inventory allows for, not only dollars to be utilized for other spending needs, but also allows for additional free facility space that can be allocated for other uses.  With shared responsibility for appropriate inventory levels, the customer can expect fewer instances of excess stock that can too easily become obsolete, while also expecting fewer shortages on products they do need, which could subsequently delay fulfillment/delivery of products to their own clients.  Since the supplier takes on the ownership of adjusting inventory levels based on actual demand, the increased flow of information reduces other costs as well.  Fewer rush orders due to improperly managed inventory levels, leads to less waste of administrative resources for executing these urgent orders for the customer.  VMI benefits the supplier on many levels as well. 

Pros for the Supplier

The supplier can gain significantly from these arrangements as well.  For starters, the supplier is able to manage a lower cost-to-serve the customer.  By analyzing actual data, the supplier can, among other things, be sure to optimize their own production/inventory requirements to meet their customer’s demand, can plan delivery schedules in advance to save on multiple, often times excessive, shipping needs, and can also reduce the costly activities associated with filling urgent, last-minute orders.  The supplier also typically realizes an increase in overall sales through this mutually beneficial partnership.  Customers see VMI providers as what they are; valuable, problem-solving resources that provide a next-level service that frees up time for the buyer to engage in more productive activities for their company.  The supplier is often the ‘go to’ resource when new demand needs arise since the buyers know they have an experienced source who their company already has an increased flow of information with, so the seller can provide valuable input that often times an outside source with little to no knowledge of the customer’s particular internal operation work can. 

If you are considering learning more about how a VMI program may be structured to work for your company’s packaging, facility maintenance, and safety supply needs, just contact United Packaging Supply and one of our Packaging Analysts will be happy to help you evaluate all of your options so you can make the best choice for your company. 

Branding – Printed Boxes versus Printed Tape

Branding is everywhere.  Whether it’s found on trucks, city billboards, public benches, t-shirts, or even body art (yes, I actually saw a tattoo promoting a micro-brewery recently), it’s hard to look in any direction and not find company or product specific branding somewhere.  In the packaging world, the two most recognizable forms of branding are with printed boxes and printed tapes.  There are several obvious advantages and disadvantages of each choice. 

Advantages and Disadvantages of Printed Boxes

Boxes offer a large print surface.

The most obvious advantage to printed boxes is that you have plenty of space for which to communicate a company’s message.  A box, like all cubes, have six sides on which a company can use (ok, so one of those sides is the bottom of the box, but I’ve seen some creative ways that companies get folks to turn the box over to get the receivers attention) to communicate to the recipient everything from, what the features are of the contents are, to the history of the company providing those items inside.  There’s also plenty of room to introduce other products or services the company may provide, along with advising the recipient of care or maintenance instructions for the box’s contents.  With all the available space, companies have plenty of canvas to catch the recipient’s eye and convey a variety of messages to the end user.

The most notable disadvantages to printed boxes are with regards to initial set up costs, and inventory space.  The initial cost to set up the plates, and colored dyes used in repeated production, can be expensive.  To what extent all depends upon the number of sides on the box that will contain print, and the complexity of the text, symbols, and overall artwork involved.  That cost can range anywhere from a couple hundred dollars to a couple thousand dollars, depending on the intricacy of the artwork being applied to the box.  In addition to the set up costs, boxes take up a lot of valuable space.  Most plants will require, at a minimum, 1,000 boxes to run custom printed work.  Depending upon the size of the box, or boxes since’ one shoe doesn’t fit all’, this can take up anywhere from one to five pallet spaces in a facility, per size.  That’s a lot of real estate that many companies just don’t have to spare.

Advantages and Disadvantages of Printed Tape

On the positive side, printed tape addresses one of the larger drawbacks to printed boxes, and that is space.  A single case of printed 2” x 110 yards tape, 36 rolls in a case, can secure easily secure over 1,500 - 24” x 24” x 24” boxes.  That single case can be tucked away under a table somewhere without ever really taking up any other usable floor space at all.  Those 1,500 24 cube boxes (that’s what we call them in the packaging ‘biz’) would take up six pallet spaces.  Another advantage of printed tape is the security it provides.  Most shippers have access to clear carton sealing tape, and can easily re-seal an opened box, however with branded tape, your end users would know right away if one of the packages you sent them had been opened.  Security is paramount for many companies wanting to ensure that their products are

Printed tape takes up less space.

reaching their destinations in their entirety.  What better way to do that then with printed tapes sealing their precious cargo.

There are a few commonly accepted drawbacks to branding with tape over boxes however.  For starters, there isn’t much room on a 2”, or even 3”, tape to communicate a more than a simple company message, like company or product name, address, phone number, and/or company website.  So if a company wishes to communicate more to its end users than that, well printed tape may not be the ideal choice.  In addition to the space constraints for a company’s message, the initial investment can be expensive.  While the plates themselves can be produced for as little as $50 to $75 dollars, the cost per roll of printed tape can be five to six

times as expensive as clear, unbranded box sealing tape.  While ultimately dependent upon the complexity and quantity of boxes being utilized, as a general rule of thumb, on a per unit cost basis, the assembly of a branded box with unbranded tape is usually less expensive than that of an unbranded box with branded tape.

Regardless as to a company’s personal choice, using packaging products for branding is a wise decision.  To determine which option is the best fit for your company, just contact United Packaging Supply and one of our Packaging Analysts will help analyze your particular needs to help you make the best choice for your company.

Lower Gauges of Machine Stretch Wrap Might Be Worth a Look

Machine stretch wrap has changed over the years.

Today, machine stretch wrap tends to come in lower gauges, which are designed to replace the 60, 70, and 80g materials.

 There are often misconceptions about these lower gauged machine films (45g, 51g, 55g) not being able to perform as well as the heavier films.

However in most cases the “downgauged” film can offer the same or higher load containment, puncture, and pre-stretch, all while reducing costs.

 It might wise to explore the options available and see how much you can optimize your film usage by making the switch to a lower gauge machine stretch wrap!

Plastic Prices on the Rise

You may have recently been told that the price of your plastic products will be increased.

Prices for plastic products are expected to
rise by up to 10 percent in February 2013.

Why, you ask?

Well, according to Frank Esposito a senior reporter at Plastics News, the end user price increase is a ripple effect caused by outages at manufacturing plants in and along the Gulf Coast.

Planned and unplanned outages throughout 2012 led to a 200 million pound decrease in polypropylene and propylene monomer manufacturing.

The decrease in available product has created higher demand, leading to a scheduled price increase of up to 10 percent effective Feb. 1, 2013.

The bad news is, we can't do anything about the impending increase.

The worse news is, the February increase may not be the last that we see.

Many companies are trying to stock up on their plastic consumables, such as bags and stretch film, before the Feb. 1 increase.

While this is a good strategy for the short term, it will ultimately lead to even lower supply and higher demand – which will lead to even higher prices.

So what can a company do to bring costs down?

The best advice that we can offer is to contact your packaging specialist. Product specialists, like ones at United Packaging, can help your company evaluate the products your are currently using and help you create a plan to either:

• Change products
• Economize your usage of your existing products
• Eliminate unnecessary usage/products

For more information about polypropylene and propylene monomer products or the impending price increase, contact a United Packaging product specialist at 1-888-633-0700, by emailing: sales.dept@unitedpkg.com or visit www.UnitedPkg.com.

Sustainability as a Business Plan

Sustainability: of, relating to, or being a method
of harvesting or using a resource so that the resource
is not depleted or permanently damaged.

The word sustainability has become one of the most potent business buzz words of the 2000s.

As customers become more educated about (and concerned for) the environment, companies large and small are jumping on the sustainability bandwagon.

Large companies, like Nestle SA, have been implementing sustainability plans that not only reduce the use of virgin packaging materials, but also reduce energy consumption and promote recycling.

Nestle has been working on its plan for about 20 years and has managed to cut between 80 and 100 million pounds of packaging material from its production in that time, according to an recent article published by Packaging World.

In addition to their reduction of materials, Nestle also cuts energy consumption by creating energy efficient products. The company's popular Nespresso coffee machines are designed to automatically switch off after nine minutes of inactivity.

In the United Kingdom, Nestle trucks use liquefied natural gas or biomethane for transporting certain products, while full-electric trucks deliver ice cream and frozen food in Switzerland.

Smaller companies, like Evive Station, have built their company solely around the idea of waste reduction. (Currently found only on the West Virginia University campus, with new locations coming soon.)

According to an article published by RFID Journal, Evive Station provides customers with a low cost re-fillable water bottle that contains a small radio frequency identification device. Customers then take the Evive bottles to any Evive water kiosk and have the bottle automatically cleaned and refilled with filtered water, for free.

Evive Station water kiosk.

Evive Station earns revenue not by selling water, but instead by selling customized ads that are played on a screen embedded in the kiosk machine while it re-fills a customer's bottle.

So how do these companies turn ecologically friendly business practices into profit? 

The answer is simple, through education and exposure.

Even though Evive and Nestle are very different companies, in scale and product, they share a common practice. Both companies use their strides in sustainability as a direct sales pitch to potential customers.

Nestle touts the recyclability and material reduction of their product packaging right on the package for potential customers to see. Meanwhile, Evive has adopted the mantra “less is more,” meaning their system sends less waste to landfills while saving their customers more money (compared to purchasing bottled water).

Find out how you can raise your company's sustainability while reducing your costs by talking with a United Packaging Supply product specialist.  

Send United Packaging Your Pictures

Send us a picture of you or another employee using any United Packaging product and we'll publish your picture in a upcoming edition of our new monthly newsletter.

Send the picture, along with the employee's name, the product the employee is using and your company contact information. We'll publish the picture in our newsletter and include a link to your company's website.

Send pictures and information to:
Janine.Lynn@UnitedPkg.com

Technology is Changing the Warehousing Game

Motorola's ET1 Enterprise Tablet, designed for durability.

Traditionally speaking, mobile technologies - such as tablets and smartphones - haven't been major players in the world of warehouse management.

In the past, IT managers have resisted the idea of wireless and mobile devices in the warehouse because of their inherent security issues, while warehouse managers have deemed the devices too fragile for the perilous life of warehouse equipment.

However, it seems that both IT and warehouse managers are changing their tune when it comes to mobile and wireless devices, and the potential that these devices have to increase warehouse efficiency.

Automation World magazine recently (Nov. 6, 2012) published an article that outlined how smartphones and tablets are making an impact in industrial environments, from real-time inventory adjustments to automated equipment control.

In a Nov. 11, 2012 article, Packaging World magazine's VP and Editor, Pat Reynolds, touched on the same topic.

While covering the 2012 Pack Expo, Reynolds, was introduced to the new tablet controlled CombiScale Primo. He reported that the Microsoft Windows tablet run scale garnered so much attention at the Expo that CombiScale ran out of marketing and sales sheet handouts.

Other companies are also jumping on the technology bandwagon. Sealed Air, the company behind the Bubble Wrap brand, recently issued a press release announcing a new web based parts catalog for their Shanklin shrink packaging equipment.

The online catalog will allow service vendors to look up part pricing and availability from any Internet connected computer, laptop, tablet and most smartphones. Onsite technicians will be able to provide lead time and pricing information to their customers, gain approval and order the necessary parts, all in a matter of minutes – instead of days.

In addition, service vendors using this new online catalog will be able to see a picture of the part they are ordering, which could lead to increased accuracy and, therefore, even less downtime.

Other major companies, like Motorola, are getting on board with warehouse technology needs by making their equipment tougher. By revamping their equipment, while keeping costs down, technology companies hope to infiltrate the rugged environment of the industrial warehouse.

Demands to “go paperless,” be more efficient and increase accuracy have forced company strategists to consider the issue of warehouse technology.

With the capabilities of wireless devices continuing to increase while their costs decrease, it's no surprise that the industrial warehouse is starting to embrace the idea of mobile technologies. After all, warehouse managers are constantly seeking ways to meet and exceed demands.

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The Automation World article discusses key areas that technology managers need to address in order to keep sensitive company information secure, even when employees are using personal wireless equipment at work. To read more about the security of wireless devices, click here to read the original article.