Articles by "Packaging"
Showing posts with label Packaging. Show all posts

on Thursday, April 09, 2020 0


When undertaking a holistic spend review in order to identify opportunities for cost reduction it is important to deploy all the tools in your toolbox in the right way. If you don’t deploy the correct tools or strategies you may be selling yourself short or investing too much time and effort into an area that is not warranted. Everything should always be looked at from a time to value perspective. Today I’d like to discuss when it makes sense to conduct Request for Proposals (RFPs), Request for Quotes (RFQs), Direct Negotiations and Group Purchasing Organization (GPO) implementation. Or in a nutshell building a strategic roadmap.

Generally speaking, RFPs should be utilized for categories that are more strategic to the organization and are more than just price focused. You want to identify additional elements and value adds that may be available in the market plus validate that the supplier meets your minimum criteria. There needs to be a wide enough supply base to ensure an element of competition and perceived threat.

But when do you decide that the category should be strategically sourced vs. working to implement a GPO solution? Do you have enough spend to leverage within the category? Often times, you may feel like you have a lot of spend in a given category, but how much does it actually mean to the supplier? The advantage of a GPO is that they are leveraging all of their members spend to drive lower pricing. Also how much time are you going to invest in the sourcing process and how much additional value do you think you may achieve if you are to conduct a full scale sourcing process? These are things that should be considered prior to blindly just applying a strategic sourcing strategy since strategic sourcing requires the highest level of engagement and utilizes the highest level of resource time.

RFQs are a modified version of a RFP where you are still soliciting responses from the market. However, RFQs are 100% price focused and are generally applied to more tactical categories where the suppliers are providing very similar to exact same products or services across the market. There isn’t much to it as far as service levels and value adds go and you are purely interested in reducing cost. But again you need to consider that although not as labor intensive as a RFP, RFQs still have very similar touchpoints. You also need to ask yourself, are you confident that you have enough spend to leverage to beat what you could have gotten going through a GPO program?

Unlike traditional RFP and RFQ categories, direct negotiation type strategies are typically applied in the following situations; there is an extremely limited supply base, the business has no incentive to move from the incumbent supplier and they highly value the relationship, you have a high level of market intelligence and do not need to solicit the market. Negotiating is a skill but having market intelligence is extremely helpful although not necessary.

So when should you assess a GPO and what are the benefits? The most obvious benefit is that the GPO program leverages all the spend across the entirety of their member base to ensure they are providing continuous cost savings and value for all their members. The GPO also manages the supplier relationship and overarching contract for you. But what does that really mean? It means that on an ongoing basis they are ensuring the supplier is meeting performance objectives, hitting KPIs, maintaining SLAs and of course modifying their pricing according the changing environment of purchases made by their member base. That being said if it is very important to you that you are managing the contract and maintaining the entirety of the end to end supply relationship management, utilizing a GPO is most likely not for you for the given category. However, if it’s a category that in the grand scheme of things is a lower to mid-level spend category and you are looking for low touch, immediate savings, it 100% make sense to look towards a GPO solution.

Corcentric applies a multifaceted approach, making the appropriate recommendations for the given category situation. We recognize there is no one size fits all approach. Thing should be looked at strategically and holistically in order to ensure that the right approach is being applied to a given category. In today’s environment not only is finding cost savings paramount but the speed to realizing savings is just as important.

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on Monday, January 13, 2020 0
I made a prediction earlier in the month that more organizations will look to become greener this year. There are plenty of things organizations can do to improve their sustainability, but Procurement pros are in an excellent position to help lead their organizations to meeting these goals. Why? Because we move beyond the confines of our facilities and can have an impact with all the suppliers our organizations choose to buy from.

So, what can Procurement do to help make our organizations more sustainable and environmentally focused, while still working to reduce costs and promote efficient purchasing?

“Sell” Green 

There’s cost savings in these initiatives, but also a level of change required to make them work – and it isn’t always easy to get stakeholders onboard with these changes. Here’s a tale of two organizations’ janitorial service providers to show what I mean.

Both organizations wanted to cut costs and considered moving to linerless trach receptacles to do it. Plastic trash bags take a notoriously long time to decompose (anywhere from 10 to 1,000 years). Cutting liners out can have a huge environmental impact for a large office – but requires personal change. One organization ended up cutting 80% of their liners to get greener and cut 2.5% of their monthly janitorial costs as a bonus. But this required employees to throw away gunky garbage (think lunch waste) in the still-lined receptacles in break rooms. The other organization’s management team felt this was too much of a burden to place on employees. Liners stayed in place.

Before we can start building a green Procurement strategy, we need to get our organizations and suppliers excited about the opportunities they bring. Is 2.5% monthly savings on janitorial services “worth it?” It certainly helps to position a change on cost benefits, but ultimately there’s an attitude change that needs to take place as well.

Establish Green Go-To-Market Events

Reducing or eliminating trash liners is just one green example. Green packaging options can cut waste while still offering exceptional protection for goods. Organizations can also push paperless initiatives. They can purchase green office and cleaning supplies, and eliminate disposable breakroom supplies in favor of reusable dishes and utensils. For organizations in deregulated areas, they can switch energy suppliers to those that offer green energy.

Procurement, naturally, has a hand in all of these decisions. As such, we should brainstorm such opportunities and propose go-to-market initiatives to bring such products in.

Even if a market event isn’t specifically focused on a green initiative, Procurement can promote sustainable purchases by including green elements in RFP documents. Ask suppliers to highlight green products in their quotes. Ask suppliers to outline their own green initiatives, and define what percent of their own suppliers offer green products and services. Make your commitment clear from the beginning.

Be a Green Advocate

Gut check question: Did you make any New Year’s resolutions this year? Follow-up: Have you already given up on any? If you have, you aren’t alone – less than 25% of people stick with resolutions after January ends.

Sticking with green initiatives will be much the same – it isn’t enough to sell green strategies once, or launch a few isolated green market events.

  • Work with management to set annual sustainability goals. Help the cause by tracking green purchases monthly as one of the overarching KPIs of this goal.
  • Work with suppliers as well. This will be particularly important for smaller suppliers that may not have much experience with sustainability initiatives, and don’t have the resources to devote to full-time team members to focus on being green. 

It Ain’t Easy Being Green

Beyond reducing environmental impact, there are certainly opportunities for cost savings from going green. But reducing an organizational environmental footprint and achieving those savings isn’t always easy.

Dedication is needed to identify green opportunities, see them through, and ensure that sustainability initiatives are a consistent focus as time goes by.

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on Tuesday, August 06, 2019 0


The direct cost of packaging is a very small % of your total logistics spend, but it impacts every part of your business, so choosing packaging purely based on its direct cost is a surefire way to either cost your business money or to leave savings on the table. In the upcoming weeks, I’ll explore the cost drivers of packaging, including:

o   Transportation
o   Product Protection
o   Warehousing
o   Handling 

There are other, softer impacts as well, but these are more difficult to dollarize:

o   Branding
o   Administration
o   Environmental

This week we’ll be look into the impact packaging has on product protection . Protecting parts from damage is critical both from a cost of damages perspective and  from a reputational perspective. There is a balance between packaging cost and product protection.  Typically the more protective your packaging, the more expensive it is, therefore it’s important to optimize and hit the “sweet spot” between cost and product protection when designing packaging. 

Example 1

Company X is an Aerospace Company making Custom Engine Components that cost $50K each.  They make 1000 per year.  They currently buy each set of packaging as a custom package that fits the product perfectly.  They spend $600 EA on packaging currently.  Their buyer has been tasked with reducing direct packaging costs and has found a solution for $500 EA to consolidate their packaging.  This packaging, however, is not customized to fit the product perfectly and will therefore increase the damage rate a bit due to increased product movement.  The new product will have an increased damage rate of .5%.  These are highly sensitive products so any product damage will require scrapping the component and building a replacement.  For simplicity’s sake, let’s say that the damage rate is going up from .5% to 1%


Description
$600 Option
$500 Option
Total Packaging Cost
 $    600,000.00
 $    500,000.00
Total Expected Damage Cost
 $    250,000.00
 $    500,000.00
Total Annual Cost
 $    850,000.00
 $ 1,000,000.00


As you can see above, even though you’ve reduced your Packaging Cost by $100K, you’ve actually increased the total cost by $150,000.  This is the problem with evaluating packaging only by direct cost.  Not only have you increased your total cost, but you’ve also increased the likelihood of damage from 5 times per year to 10 times per year, which will have a negative effect on your company’s reputation.

In many instances, however, where the opposite of the above is true and packaging is over-designed and not cost effective.  It’s important to work with smart designers that can optimize packaging design and hit that product protection sweet spot.  Here’s an example of that situation:

Example 2

Company X works in the Energy sector.  They provide goods to the mining industry.  They have a product that costs $200 and is not particularly sensitive, but requires some cushioning.  The product ships LTL mostly.  The existing packaging is a Corrugated RSC with a fully encompassing PE Foam cutout.  It costs $50.  They sell about 10,000 of this product per year.  Their Supply Chain Manager was worried about packaging spend so they called a packaging company to evaluate their approach to the category.  The packaging company came in, redesigned the solution, and reduced material significantly as the product didn’t need to be fully encompassed in the foam.  Without getting too in-depth on cushioning curves (the standard way to measure foam cushioning), there is a sweet spot where either more or less foam touch points would actually reduce the amount of cushioning.  So, even though there was more foam before, it actually cushioned the product less.  They were able to reduce the price to $35 EA, while improving the packaging.  However for arguments sake, let’s say that the damage increased at the same level as the Aerospace example (.5 to 1%). 

Description
Current Option
Redesigned Option
Total Packaging Cost
 $    500,000.00
 $    350,000.00
Total Expected Damage Cost
 $      10,000.00
 $      20,000.00
Total Annual Cost
 $    510,000.00
 $    370,000.00

Even when damages are doubled, the direct cost of this optimized solution is still much lower than that of the alternative. Of course, doubling product damage will present new reputational costs. As such, I would recommend ISTA testing whenever you change packaging solutions to ensure it will effectively protect your products.

You can see from this example that over-design is often a serious problem.  Another big mistake companies make when benchmarking their existing packaging is forcing like-for-like pricing.  Companies typically do this either because changing designs internally is a long and difficult process or because they fear new packaging won’t offer adequate protection.  The example above shows you how much this can cost.  Special care is also necessary because packaging companies will use tricks like putting in materials that are difficult for competitors to source even if they provide minor (if any) structural difference over a substituted material (i.e. Engineered Lumber vs. Regular Lumber).

Hopefully this blog helped you understand the role that packaging plays in Product Protection.  In the next part of this series I will show how packaging impacts Warehousing Costs.
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on Tuesday, July 09, 2019 0


The direct cost of packaging is a very small % of your logistics spend, but it impacts every part of your business, so choosing packaging purely based on its direct cost is a surefire way to either cost your business money or to leave savings on the table. Over the upcoming weeks, we’ll be exploring the cost drivers of packaging, including:

o   Transportation
o   Product Protection
o   Warehousing
o   Handling

There are some softer impacts as well that matter, but are more difficult to dollarize:

o   Branding
o   Administration
o   Environmental

Transportation

Improving packaging design in order to optimize shipping through dimensional improvements, stacking strength, weight reduction, etc… can drastically reduce your total cost of logistics.  Here’s a simple example using increased stacking strength (Note that pricing used below is for simplicity):

Overview: Company X ships 60 products per day.  Products can ship in a 48x40x50 Corrugated Box + Die Cut PE Foam solution.  Product ships from Chicago to Indianapolis and an agreement has been made for a fixed $700 FTL (Full Truck Load) rate.  The buyer has 2 options for corrugated + foam solutions. 

Option A:  32C Corrugated + PE Foam.  Product weight is too heavy to be stacked 1+1.  Company X can fit 30 products per truck: 2x15x1.  Solution Cost is $20 EA.

Option B: 48BC Corrugated + PE Foam.  Product can be stacked 1 + 1.  Company X can fit 60 products per truck: 2x15x2.  Solution Cost is $25 EA.

So which option is better?  If you look at only direct packaging cost, you’ll choose option A as option B is 25% more expensive, however, let’s look at the total costs annualized.

 Description
Option A
Option B
Packaging Cost
 $ 312,000.00
 $ 390,000.00
Transit Cost
 $ 364,000.00
 $ 182,000.00
Total Cost
 $ 676,000.00
 $ 572,000.00






Option B Savings
 $ 104,000.00



As you can see option B is $104K (or 15%) less expensive than option A because although the packaging in Option B is 25% more than option A the freight is 50% less.

In this blog we examined just one of the ways that packaging impacts transportation, but there are several others to consider, such as the impact of corrugated stacking strength in ocean shipments, the impact of dimensional weight on air shipments, etc... Transportation is one of the main drivers of cost that packaging impacts.  Making sure you truly understand the impact your packaging is going to have on your transportation costs is critical when sourcing packaging.

In the next blog of this series I'll examine the impact of Product Protection and Optimizing Packaging Design

Read more »

on Thursday, May 09, 2019 0


The following guest blog comes to us from Kate Began of Polycase.com

Like most industries, the electronics field struggles when it comes to creating and maintaining sustainable practices. One of the problems that the industry is facing is developing a consistent standard that all companies agree on and adhere to every day.

The primary reason for this is the level of competition between corporations. Juggernauts like IBM, General Motors and General Electric not only vie for their share in the market, but they also compete with innovators like Kano, Dolby and EERO, as well as household names like Microsoft, Apple and Google.

All of these companies operate under a cloud of creating the next big thing, hoping to set trends that quickly run their course.

Sustainability: No Longer an Option

Technology companies create the devices with electronic enclosures that billions of people use every day; consumer spending topped an excess of a trillion dollars from 2012-2017. That figure could double over the next five years. With this influx of technology, the need for sustainable solutions for manufacturing is greater than ever.

The question, however, is how to create sustainable models and which standards need to be established to get everyone on board. For a little inspiration, let’s take a look at what some companies are already doing to become more sustainable.

Recycled Biodegradable Materials

It should come as no surprise that material waste is the leading environmental issue in electronics. In 2017, The Atlantic reported that of the $206 billion spent on consumer electronics in 2012, only 29 percent of the waste was recycled. The rest was disposed of in landfills.

Although electronics companies are facing an uphill climb in using sustainable materials, there is light at the end of the tunnel. For example, Nokia publishes annual reports that outline their environmental initiatives. Key performance indicators (KPI) point back to the company sourcing raw materials that are either biodegradable or made from recycled materials.
Their reports go all the way back to 2007 when they started altering their supply chain and manufacturing methods. Since then, the company makes sustainable devices that can be recycled time and again. One hundred percent of the materials in the majority of their products is sustainable.

Whirlpool, one of the largest household and commercial appliance manufacturers, has also developed programs and initiatives that change how they utilize raw materials. Where they have excelled the greatest is implementing electronic waste initiatives.

E-waste programs offer viable solutions for sustainability and the disposal of recyclable materials. As the product life cycle becomes shorter, Whirlpool offers incentives for trade-in and take-backs to keep consumers from throwing away their old appliances. By returning products to the manufacture, consumers can help offset the environmental impacts of product waste.

Rethinking Plastic: Sony’s SoRPlas

Due to environmental concerns from agencies and consumers alike, many companies have approached engineering plastic-based products from different angles.

A prime example of this is Sony’s development of SoRPlas–its proprietary recycled plastic. SoRPlas is made from leftover transparent sheets, optical discs and used water bottles. The used materials are crushed, washed and then converted to sustainable plastic that Sony utilizes on a wide range of devices.

Whereas most plastic contains 30 percent recycled content, Sony uses materials that include as much as 99 percent recycled materials. The other one percent contains Sony’s brominated-free flame retardant. Together, Sony engineers use the material in almost all of their products, like cameras, media players and other electronics.

Reusable Source Packaging Materials

While companies are focusing on manufacturing, they’re also considering how they package their products.

For instance, Dell now packages all of its products using boxes and bags made from materials like wheat straw, mushrooms and bamboo. It ships more than 75 percent of its computers, printers and other products in recyclable packages. Dell sources bamboo from China to make cushions and trays that keep computers safe in transit. Not only is it renewable and efficient, bamboo can grow at a rate of 1 inch per hour.

Other companies are now using paper and cardboard products to package and ship their products. Many packaging manufacturing companies such as Amcor, Ball and Crown Holdings have discovered cornstarch for making “peanut” packaging. Another favorite item for shipping products–bubble wrap–can now be derived from polythene, which is completely degradable.

The Case for Sustainability

As consumers become more environmentally-conscious, industries are adapting their manufacturing processes. Whether these changes are motivated by marketing and revenue or a sincere desire to play a part in cleaning up the planet, companies are discovering a variety of benefits in embracing sustainability:

●       A Competitive Edge. Eighty-six percent of consumers worldwide want to purchase products from companies that demonstrate an interest in environmental issues. Manufacturers that want to compete in the market need to create sustainable solutions when building their products.
●       Hiring Top Talent. Sixty-seven percent of prospective employees surveyed stated that they prefer to work for an environmentally responsible company. Eighty percent of millennials want to work for a company that contributes to society and is sensitive to social issues.
●       Economic Impact. Manufacturers are now paying the price for irresponsible business practices. Since the early 2000s, major players in the electronics industry have suffered financial losses due to reckless business practices such as pollution, child labor and wasteful resource consumption.
●       Reducing Operational Costs. By lowering energy usage and finding sustainable solutions, companies are benefiting from a significant reduction in operating costs. The ROI in becoming more sustainable is much higher than wasting money on conventional methods.
●       Higher Revenue and Profit Margins. Sustainable and socially responsible supply chains can result in average revenue increases between 5 and 20 percent, cost reductions between 9 and 20 percent and a boost in brand value between 15 and 30 percent.

Manufacturers have a sizable role to play in reducing electronic waste. Many companies are now taking the lead in creating sustainable products while reducing energy consumption and cutting costs. They’re also providing consumers with the opportunity to return products that would otherwise end up in a landfill.

All of these efforts will make a difference over the next decade. Innovation insustainability will set the pace for a cleaner world for decades to come.


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on Tuesday, March 26, 2019 0
How are UK and EU Companies Reacting to Hard Brexit?


Brexit is potentially ending a little later than expected as European Union (EU) leaders recently agreed to a short delay for withdrawal. As of this week, the deadline is April 19 – a more nearly three-week delay from the initial deadline of March 29. This buildup has created a quagmire full of uncertainty as British Parliament rejected the “meaningful vote” for withdrawal under Theresa May’s plan twice, declined to leave the EU without a deal, dismissed allowing backbenchers to set business of the House, denied extension for a second referendum, and disallowed a third meaningful vote from being called.

Suppliers are rightfully confused about how this will all turn out for the United Kingdom (UK) and its supply chain networks.

On the subject of imported goods, there arise the additional complexities of cross-border regulations. To import goods from the EU into the UK, companies must now register for a UK Economic Operator Registration Identification (EORI) number which designates businesses for the import and export of goods into or out of the EU. Moreover, a Value-Added Tax (VAT) number must be generated for value added tax purposes. On the other side of the spectrum, to import goods from the UK into the EU, UK companies will need to incorporate their businesses within the Union or designate a European Union-established, third-party provider to act as importer. This may require sourcing out customs brokerage service providers to clear Customs. Consequently, companies will face major delays as they scramble to comply with these regulatory mandates.

Moreover, capacity at ports and entryways into the UK or EU will be another lingering issue. Customs declarations are expected to increase dramatically at these ports that service import-export exchanges. Dover will be especially relevant because almost all its business exchanges are with the EU. Close to 2.9 million freight units passed over Dover in 2017, and Dover remains the busiest international port with close to twice as much passenger traffic as the next five UK ports combined. Similarly, ports on the EU side such as the Ports of Rotterdam and Hamburg will anticipate similar levels of regulatory development. Even as the UK and the EU increase resources to alleviate congestion, these ports of entry will likely stagger as sheer volume impede the speed of business.

One noticeable issue that has arisen is the UK pallet crisis. Officials from the Department for Environment, Food and Rural Affairs have recently realized that the UK has a shortage of pallets that adhere to strict EU regulations. At present, movement between EU member states, including the UK, are exempt from the International Standards For Phytosanitary (Regarding Plants) Measures 15 (ISPM 15). Companies in the UK are currently using pallets that lack these provisions. The material handling space will require revamping as companies must spend more to replace their inappropriate pallets. This is especially troublesome for the UK manufacturing industry which will see risk and uncertainty from delays.

Another logistical issue that has developed is the surge of requests for trucking permits for unimpeded access to the EU. $544 billion worth of goods move across the border supported by the trucking industry, and manufacturers and retailers need reassurance that their business is not limited. Their freight and logistics needs for cross-border business depend on unimpeded access in order to prevent disruptions along all of their supply chain. Already, the UK Department of Transport receives more than 11,000 applications. Permits are expected to increase significantly should Brexit come to fruition as companies consider trucking as an avenue to conduct business.

We are approaching the three-year anniversary of the first Brexit talks. Logistical dilemmas, however, continue to materialize as companies face increasing pressure from UK and EU mandates on cross-border business. Therefore, companies must keep an eye on the minutiae of their logistics network if they hope to pull ahead of this quagmire. Just as the Brexit talks will soon face a delay, business supply chains may suffer significant delays on the road ahead.
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on Friday, January 11, 2019 0


The federal government shutdown, now in its third week, means a dry season for craft beer producers across the nation. Without formal approval for new packaging and recipes, organizations are finding themselves burdened with excess inventory and rampant inefficiency.

President Trump's feud with congressional Democrats has stalled many activities associated with the Alcohol and Tobacco Tax and Trade Bureau (TTB). Affiliated with the Treasury Department, the Bureau not only approves labels and formulas, but also oversees any mergers and acquisitions within the growing industry. Since the beginning of 2018, TTB has received nearly 200,00 applications for new labels. Though the approval process is generally quick, the shutdown will undoubtedly lead to a crowded backlog and slower-than-usual progress even after the government reopens.

According to the Brewers Association, the number of craft breweries has more than doubled since the last protracted government shutdown. To make matters worse, a saturated marketplace has forced these organizations to rely on seasonal releases and specialty products to set themselves apart. Without the means to do so, it's likely many fledgling organizations will have to close up shop.

It's not just the scrappy up-starts struggling. The Boston Beer Company, a giant among craft brewers, has had to put several key initiatives on hold. The Wall Street Journal reports that the makers of Sam Adams cannot move forward with plans to update their Summer Ale formula or introduce a new beer brewed with Himalayan sea salt. That's not to mention the heap of logistical hiccups the situation has created. "Some experimental beers," the Journal writes, "can't be moved out of their tanks because the company doesn't have approval for the labels on keg covers."

Boston Beer Co. co-founder Jim Koch estimates his organization is missing out on "tens of millions of dollars of sales." Worse still, he continues, "That number goes up every day the shutdown continues."

Certain organizations have managed to identify workarounds. Austin's Jester King Brewery, for example, has shuttered plans to distribute five new beers nationwide. Since in-state sales do not require TTB approval, the company has managed to mitigate the shutdown's damage by keeping the new formulas in Texas. The strategy, however, has put a definite ceiling on potential earnings. Co-founder Jeffry Stuffings remarks, "It hasn't cost us any money yet, but it's basically taken the pool we can sell to and shrunk it."

With no end in sight, the shutdown could soon impact the bottom line for craft breweries and major corporations alike. Speaking to NPR, the president of the National Beer Wholesalers Association expressed his concern. "It doesn't matter," he says, "what the size of the company is; when nobody's answering the phone, the work stops and it really puts the beer industry at a disadvantage."

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on Monday, December 17, 2018 0


Last week, a collection of watchdog groups including Toxic-Free Future and Mind the Store published the results of a study on the packaging offered by five major grocery chains. Whole Foods, an organization that prides itself on healthful, sustainable offerings, ranked worst of the five.

While the Amazon-owned chain keeps a list of  "unacceptable ingredients for food" containing everything from aspartame to vanillin (from artificial sources), both its food bars and bakeries have been serving customers a far more hazardous additive. More specifically, the high levels of flourine present in Whole Foods' take-home containers suggests that they were treated with per- and polyflouroalkyl.

Colloquially known as PFAS, the chemicals are typically used in consumer products to protect from grease and water damage. This repellent quality makes them an especially popular choice for food packaging like fast food wrappers or pizza boxes.

They are so prevalent, the report states, that "virtually all U.S. residents have PFAS in their bodies, and babies are born with PFAS in their umbilical cords." Unfortunately, experts suggest they're far from harmless. Laboratory research has linked the chemicals to a number of potentially fatal health concerns including cancer, thyroid hormone disruption, and decreased response to vaccines.

PFAS have also come under fire for their deleterious environmental impact. Since so many PFAS-rich packages are also both single-use and non-biodegradable, they sit in landfills and ultimately contaminate water, soil, and wildlife. In certain regions, including suburban Philadelphia, PFAS-contaminated drinking water was a hot button issue during this year's mid-term elections.

2018 even saw San Francisco become the first U.S. city to ban PFAS outright in all single-use food packaging. This amendment to the city's environmental code goes into effect on January 1, 2020.

In an ironic twist of fate, Whole Foods selected the packaging in question (the Bio-Terra II) as part of a sustainability initiative. Their response to the study reads, "Whole Food Market introduced compostable containers to reduce our environmental footprint, but given the concerns about the possible presence of PFAS, we have removed all prepared foods and bakery packaging highlighted in the report."

Now, the company is engaged with suppliers to identify bio-degradable packaging that will help it promote sustainability without potentially poisoning its shoppers.
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on Monday, November 19, 2018 0
Several industries (medical and manufacturing, for example) are being impacted by the newly implemented tariffs, and many companies across the country are fearful of the potential impact. Those industries who have not been impacted yet, will be affected with time. To begin the trade war earlier in March of this year, the US announced tariffs of 25% on steel and 10% on aluminum imports, drastically hindering the manufacturing industry as material costs have concurrently been on the rise for the better half of 2018. Not only have these particular tariffs impacted the manufacturing sector, they impact a significant amount of companies who rely on manufacturers for products and services for their own business, such as automotive or medical device companies.

There are many types of companies that are being influenced by the trade war, and the tariffs appear to be implemented in waves. Tariffs on metals appeared first at approximately 25% on imports, and continue to be placed on thousands of other core commodity groups. It is difficult to say what commodities will be impacted as the coming waves of tariffs that are put into effect, however it is possible to develop strategies in an effort to be proactive as the trade war progresses.

The trade war can present several challenges when it comes to developing strategies to mitigate risk and save business operations. Being proactive and thinking ahead is going to be a large component in identifying a feasible strategy to manage the impact of the tariffs. Performing quick, yet comprehensive research on areas such as if and how the business is potentially going to be impacted by the tariffs and identifying and qualifying alternate suppliers in other countries is going to be a crucial starting point for American companies. This will allow the company to gain a strong basic understanding of how the tariffs impact them and be able to piece together components for a suitable go-forward strategy.

Identifying alternate suppliers in other lower-cost countries and transitioning manufacturing operations away from China is a viable strategy that many companies are exploring as a result of the trade war. In order to maintain current costs and product quality, extensive supplier identification and qualification is going to be required as part of this strategy. Determining suitable countries that can businesses can migrate operations to, comprehending supplier capabilities in relation to the business needs, and analyzing costs associated with transitioning the business are going to play an important role in this primary strategy to operate around the tariffs. Additionally, it is important to maintain a level of diversity and refrain from putting all operations in one country, as it allows for more risk associated with having all Procurement's eggs in one basket.

Though there has not been one strategy that fits all scenarios regarding the tariffs, there are common elements to keep in mind as companies develop the strategy that best suits their company’s changing needs. The trade war has certainly become a challenge to work around, however it is important to identify the challenge it may pose on your company, and take action to develop a strategic plan to implement in order to limit the excess costs during this time.
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