As a corrugated sheet converter we have a challenge when it comes to purchasing sheets. In the corrugated industry there is a standard of 10% over/under on all orders. As a producer in smaller quantities we also have an added challenge of meeting a 400 linear foot order. Even though we may order a lot of sheets, we may end up getting up to double the number of sheets needed to complete the order. The question is how we work with these extra sheets. How do minimize our cost of material when many of our orders are delivered at 110% what we order or even more? To do this, we’ve established a stock sheet program that allows us to minimize these over runs and reduce waste. In addition to ordering stock sheets to meet small orders, we also build a small inventory of extra sheets to help complete small orders without the extra cost of purchasing material. At the same time, we may use extra sheets as dunnage, material used to protect a customer’s finished product during handling and delivery. What sort of material purchasing challenges occurs in your industry and what steps do you take to combat that and ultimately minimize cost?
-Tim Goodwin