From the end of 2009, a round of raw paper price increases have affected China. China is a country with scarce forest resources. In recent years, it has also increased the protection of forest resources. Most of the wood pulp and base paper used for packaging in China need to be imported, and the imbalance in the scale of paper supply and demand between companies has exacerbated this trend. The rise in base paper, with the rise in labor costs, poses a threat to paper packaging manufacturers, and also poses challenges to the cost control and procurement security of end users of paper packaging products.
Faced with this situation, what measures should be taken by the purchaser of paper packaging?
Actively nurturing strategic suppliers If our procurement volume reaches 5% or more of a paper packaging production capacity, in fact, both procurement and supply have formed an important strategic cooperative relationship. In other words, changes in either side of supply and demand will have a great impact on each other. Therefore, establishing a strategic partnership is an effective way to ensure the long-term interests of both parties.
There are various ways to establish strategic partnerships. Through auditing, the purchaser issues “Qualified Supplier Qualification Certificates†and “Annual Purchasing Contracts†and “Price Agreements†to the paper packaging suppliers, making the business of both parties become a kind of Trusted long-term relationship. Paper packaging suppliers generally pay special attention to important long-term customers. They will adopt a cautious attitude toward price adjustments, and may even experience price adjustments for general customers, but they may not raise prices or increase prices for important customers. The purchaser’s commitment to suppliers’ long-term stable purchases also virtually reduced their business costs and risks. If they get an annual procurement contract, they can pre-order paper when the international paper market price is low, or build paper stocks to resist the rise in base paper prices.
Establishing Multiple Backup Providers For purchasers of paper packaging products, multiple backup vendors must be established. A category of products must have two or more qualified suppliers. For an important brand or specification product, there must be two or more qualified suppliers. For example, for corrugated paperboard products, due to the low technical content of such products, there are many suppliers to choose from, as long as there are more than two qualified suppliers, there is no need to establish a back-up supply for each brand or specification of packaging. Business. Some brands or specifications of product packaging, high technical content (a special process, anti-counterfeiting technology and electronic monitoring code, etc.), the corresponding supplier selection is very narrow, you must set a backup supplier for each brand or size of paper packaging.
Here is an important point to explain. The selected backup vendor should focus on selecting different types. Because of the adjustment of the price of raw paper, the reaction of different types of suppliers is different. Some are very sensitive, as long as the original paper prices have changed, their products will immediately adjust the price, because they do not have more resistance to the original paper price changes. Such frequent adjustments are unfavorable to the purchaser's control of costs; while some suppliers have a certain degree of endurance, they have more purchase channels and have sufficient inventory, so they can resist the adjustment of paper prices. In particular, multinational companies’ paper packaging suppliers have global channels for the purchase of paper, some of which themselves are manufacturers of base paper, and some even have raw material bases. They have conditions to control the price of paper, and at least can also reduce the impact of paper price changes. .
Based on the evaluation of the movement trend of the raw paper market price, the result of the establishment of the procurement budget is reflected in the purchase budget of each year. The clearer the understanding of the paper market price, the more accurate the budget for procurement costs and the more effective the corresponding measures taken. This is a requirement for each procurement manager.
Strengthen the quality of dynamic monitoring, to prevent the raw paper prices caused by the quality of paper packaging products fluctuations when the original paper prices, and paper packaging products sales prices can not rise, there will be a small number of bad manufacturers through the reduction of quality transfer costs. If the price of the box remains unchanged, but the weight of the paper is reduced, the brand of the paper is changed, and even the type of paper is changed. This will have a very serious impact on end customers and will affect the sales of their products. Consumers accustomed to their products, now suddenly find that the products in their hands, the box's paper is soft, the color of the printing is gray, they will suspect that the purchase is shoddy goods. Therefore, it is very important to establish a mechanism for supplier change management. Signing the "Product Quality Standard", in the standard clear paper type, weight, brand, inspection standards of a product, is an effective method; the sample signing system is also a simple and practical method, making the supply and demand sides have a common The quality scale. In addition, it is also possible to set up provisions in the annual procurement contract “changes in supplier materials, processes, and standards that must be notified three months in advance and verified and approved by the purchaser†to control product changes.
Establish the concept of “energy saving, environmental protection, and moderate packaging†and reduce the cost of packaging. The period during which a product was packaged was popular in previous years. A small commodity, get a big box, outside the packaging box must also be wrapped. Bronze silver, UV coating, pearl printing on the box. As a result, paper consumption is high, the technology is complicated, and the cost of packaging goes up. Discarded boxes also cause pollution. This over-packaging approach does not meet the concept of “energy conservation, environmental protection and sustainable development†and must be abandoned. For drugs, the main concern of consumers is the efficacy of the drugs. They do not care about exquisite packaging. Some foreign pharmaceutical companies have printed the instructions directly on the inside of the packaging box, reducing the paper consumption of the separate printing instructions. Through moderate packaging, the demand for paper is reduced, and the cost of the entire product is also reduced.
Dynamic adjustment of purchase prices to achieve a mutually beneficial win-win situation for supply and demand parties must be objectively seen, because the gradual reduction of natural resources, the rise in the price of base paper is a major trend. The increase in the labor price of paper packaging companies is also an inevitable trend. In this case, if the buyer as the end customer insists on keeping the purchase price unchanged, it will inevitably lead to the purchase risk. When the ex-factory price of the paper packaging manufacturer is lower than the original paper price, the buyer's risk will also arise. Supply may be interrupted and defaults may occur at any time. This is something the purchaser does not want to see. Therefore, it is necessary to negotiate with both parties in time to negotiate the price that both parties can accept.
Although faced with many unfavorable factors such as the increase in raw paper prices, we must also look at the optimistic side.
There are many domestic paper packaging manufacturers and most of them have excess capacity. In recent years, in order to upgrade their grades, these companies have introduced high-end packaging and printing equipment, which has exacerbated excess production capacity. Fierce competition among enterprises has curbed the impulse of price increases, thereby reducing the impact of paper price increases on end customers.
The improvement of the management capabilities of paper packaging manufacturers has also reduced the impact of paper price increases. In the management mode of “precision productionâ€, accurate quantification control is provided for feeding, proofing and production. The reduction of waste products and zero inventory basically achieves how much the customer needs to produce. It is no longer blind production based on forecasts. This also greatly reduces the waste in the production process.
In addition, the appreciation of the renminbi also partially offset the price increase of imported paper.
Faced with this situation, what measures should be taken by the purchaser of paper packaging?
Actively nurturing strategic suppliers If our procurement volume reaches 5% or more of a paper packaging production capacity, in fact, both procurement and supply have formed an important strategic cooperative relationship. In other words, changes in either side of supply and demand will have a great impact on each other. Therefore, establishing a strategic partnership is an effective way to ensure the long-term interests of both parties.
There are various ways to establish strategic partnerships. Through auditing, the purchaser issues “Qualified Supplier Qualification Certificates†and “Annual Purchasing Contracts†and “Price Agreements†to the paper packaging suppliers, making the business of both parties become a kind of Trusted long-term relationship. Paper packaging suppliers generally pay special attention to important long-term customers. They will adopt a cautious attitude toward price adjustments, and may even experience price adjustments for general customers, but they may not raise prices or increase prices for important customers. The purchaser’s commitment to suppliers’ long-term stable purchases also virtually reduced their business costs and risks. If they get an annual procurement contract, they can pre-order paper when the international paper market price is low, or build paper stocks to resist the rise in base paper prices.
Establishing Multiple Backup Providers For purchasers of paper packaging products, multiple backup vendors must be established. A category of products must have two or more qualified suppliers. For an important brand or specification product, there must be two or more qualified suppliers. For example, for corrugated paperboard products, due to the low technical content of such products, there are many suppliers to choose from, as long as there are more than two qualified suppliers, there is no need to establish a back-up supply for each brand or specification of packaging. Business. Some brands or specifications of product packaging, high technical content (a special process, anti-counterfeiting technology and electronic monitoring code, etc.), the corresponding supplier selection is very narrow, you must set a backup supplier for each brand or size of paper packaging.
Here is an important point to explain. The selected backup vendor should focus on selecting different types. Because of the adjustment of the price of raw paper, the reaction of different types of suppliers is different. Some are very sensitive, as long as the original paper prices have changed, their products will immediately adjust the price, because they do not have more resistance to the original paper price changes. Such frequent adjustments are unfavorable to the purchaser's control of costs; while some suppliers have a certain degree of endurance, they have more purchase channels and have sufficient inventory, so they can resist the adjustment of paper prices. In particular, multinational companies’ paper packaging suppliers have global channels for the purchase of paper, some of which themselves are manufacturers of base paper, and some even have raw material bases. They have conditions to control the price of paper, and at least can also reduce the impact of paper price changes. .
Based on the evaluation of the movement trend of the raw paper market price, the result of the establishment of the procurement budget is reflected in the purchase budget of each year. The clearer the understanding of the paper market price, the more accurate the budget for procurement costs and the more effective the corresponding measures taken. This is a requirement for each procurement manager.
Strengthen the quality of dynamic monitoring, to prevent the raw paper prices caused by the quality of paper packaging products fluctuations when the original paper prices, and paper packaging products sales prices can not rise, there will be a small number of bad manufacturers through the reduction of quality transfer costs. If the price of the box remains unchanged, but the weight of the paper is reduced, the brand of the paper is changed, and even the type of paper is changed. This will have a very serious impact on end customers and will affect the sales of their products. Consumers accustomed to their products, now suddenly find that the products in their hands, the box's paper is soft, the color of the printing is gray, they will suspect that the purchase is shoddy goods. Therefore, it is very important to establish a mechanism for supplier change management. Signing the "Product Quality Standard", in the standard clear paper type, weight, brand, inspection standards of a product, is an effective method; the sample signing system is also a simple and practical method, making the supply and demand sides have a common The quality scale. In addition, it is also possible to set up provisions in the annual procurement contract “changes in supplier materials, processes, and standards that must be notified three months in advance and verified and approved by the purchaser†to control product changes.
Establish the concept of “energy saving, environmental protection, and moderate packaging†and reduce the cost of packaging. The period during which a product was packaged was popular in previous years. A small commodity, get a big box, outside the packaging box must also be wrapped. Bronze silver, UV coating, pearl printing on the box. As a result, paper consumption is high, the technology is complicated, and the cost of packaging goes up. Discarded boxes also cause pollution. This over-packaging approach does not meet the concept of “energy conservation, environmental protection and sustainable development†and must be abandoned. For drugs, the main concern of consumers is the efficacy of the drugs. They do not care about exquisite packaging. Some foreign pharmaceutical companies have printed the instructions directly on the inside of the packaging box, reducing the paper consumption of the separate printing instructions. Through moderate packaging, the demand for paper is reduced, and the cost of the entire product is also reduced.
Dynamic adjustment of purchase prices to achieve a mutually beneficial win-win situation for supply and demand parties must be objectively seen, because the gradual reduction of natural resources, the rise in the price of base paper is a major trend. The increase in the labor price of paper packaging companies is also an inevitable trend. In this case, if the buyer as the end customer insists on keeping the purchase price unchanged, it will inevitably lead to the purchase risk. When the ex-factory price of the paper packaging manufacturer is lower than the original paper price, the buyer's risk will also arise. Supply may be interrupted and defaults may occur at any time. This is something the purchaser does not want to see. Therefore, it is necessary to negotiate with both parties in time to negotiate the price that both parties can accept.
Although faced with many unfavorable factors such as the increase in raw paper prices, we must also look at the optimistic side.
There are many domestic paper packaging manufacturers and most of them have excess capacity. In recent years, in order to upgrade their grades, these companies have introduced high-end packaging and printing equipment, which has exacerbated excess production capacity. Fierce competition among enterprises has curbed the impulse of price increases, thereby reducing the impact of paper price increases on end customers.
The improvement of the management capabilities of paper packaging manufacturers has also reduced the impact of paper price increases. In the management mode of “precision productionâ€, accurate quantification control is provided for feeding, proofing and production. The reduction of waste products and zero inventory basically achieves how much the customer needs to produce. It is no longer blind production based on forecasts. This also greatly reduces the waste in the production process.
In addition, the appreciation of the renminbi also partially offset the price increase of imported paper.
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