You Get What You Pay For, Part 2

Last issue I discussed what happens to a blown film manufacturer on a shoestring budget. It is a financial truth that if a company does not make enough money on the product it sells, then something has to give, i.e., either it will eventually go out of business, or some necessary expense must be eliminated. Let’s look at some of these and see what areas an end user can focus on when meeting with a supplier.

First and foremost is product quality. The end-user should take a long look at the converter’s lab test equipment, the personnel operating that equipment, the tests that are actually done on the product and the frequency of testing, and test results. Quite often suppliers issue certificates of quality, but do not issue test results. This may or may not be a red flag, as long as the end-user occasionally audits the manufacturer. The blown film/bag manufacturer who is the subject of this blog had no test equipment other than a micrometer. It occasionally sent film out to its suppliers to have oxygen transmission rate and layer thicknesses measured. This is inadequate, as it is critical to know in real time whether the product you are making meets the agreed upon specifications.

As far as layer thickness goes, it is possible to get a good estimation of average layer thickness by monitoring usage through the gravimetric feed system. However, the gravimetric feeders must be calibrated, preferably on a weekly basis, but at least on a monthly basis. This supplier had not calibrated their feeders in 12 years. That’s right, 12 years.

Secondly, there was no record keeping to establish the fact that the gravimetric feeders were accurately delivering the proper output. Since this facility produces film for the food industry, it is expected to follow Good Manufacturing Practices (GMPs). This is covered in Code of Federal Regulations, 21USC351. Basically, the film supplier should know which lot of resin went into each roll of film, who made the film, conditions used to make the film, properties of that film, etc., etc. Likewise with the bags made… each lot of bags should have a date and time stamp, and be able to trace which rolls of film went into that lot of bags. This requires time and effort to do, and in essence reduces the efficiency of the operators. For example, rather than one operator being able to operate two bag machines, it might take two operators to run three machines, as an example. This facility had no record keeping, and when there was a return, they had to reference sales orders, and could determine only the month a product was made, and not which machine it was made on. This is not good.

As a result, rejects and complaints were rising, and customer satisfaction and profits were declining. If you can’t make it right the first time, when will you find the time (and money) to do it the second time? My father used to say that all the time.

So, to summarize, if you think you are getting a good price for the film or bags you are buying, you might want to look deeper. Perhaps the supplier is getting a good price on resins and is extremely efficient at processing the materials, thus the low price. Or… perhaps they are buying off quality materials, or changing the product construction to save money, or saving on labor costs by simply not doing testing and record keeping, or knowingly let off-quality material out the door.

I can’t tell you how many times I have served as an expert witness to explain these things in court. And that is only a fraction of what I’ve seen. Corporate needs quite often outweigh doing the right thing. I hope these insights help the end-user better understand the ins and outs of the converting operation, and the value of a reputable supplier as part of a long term business strategy.

Caveat Emptor, or buyer beware.

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