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!