Issue link: https://www.e-digitaleditions.com/i/999236
March/April 2018 53 www.globefoodequip.com • 800-347-5423 MORE SAVINGS MORE CAPACITY MORE CONSISTENCY MORE YIELD MORE PEACE OF MIND MORE CONVENIENT SHARPENING MORE PRECISION MORE COMFORT MORE INFORMATION MORE ACCESS MORE ROOM MORE THAN THE SUM OF ITS PARTS To learn MORE about Globe's all new S-Series premium slicers, visit us at NRA in booth #4018! S-Series Slicers was purchase costs. is makes the target of price paid for goods and services very attractive if a company wants to improve their profi tability. But, price is not the only opportunity for customers to reduce their costs. In a study conducted for the Distribution Research and Education Foundation (DREF): "Team Up! Profi t Up!," it was found that customers were undertaking more than 187 diff erent initiatives to improve their profi ts through their suppliers, of which 65 were common across multiple industries. ese initiatives included opportunities to control costs in seven major categories: expenditures, performance, inventory, administrative costs, engineering support, information-sharing and quality control/ safety. And for customers pursuing these initiatives, the results have been signifi cant. e Supply-Chain Council, a group of companies that share best practices and fi nancial data on supply chain costs, estimated companies actively pursuing supply chain management as a strategy for reducing costs have been able to increase profi ts by 3 percent to 7 percent of revenues, but what happens when things bottom out? What happens when the customer cannot fi nd additional opportunities to reduce costs with their distributors? Eventually that has to happen because suppliers cannot continue to provide more services and reduce their pricing. Nor, can distributors continually turn to their manufacturers and ask for additional price concessions when confronted by customers that demand a lower price. Eventually, both suppliers and distributors will come to a point where they cannot give any more. So, what will the customer do? ey will fi nd an alternative. ey have to. e pressure is too great not to. e most recent alternative is e-commerce. Many proponents suggest that e-commerce can reduce prices paid by 5 percent to 20 percent. How? By cutting out administrative costs, inventory costs and sales costs. e probability that the price paid for goods could be reduced by 20 percent seems unlikely to most distributors, until you look at the redundancy in the The good news is that 90 percent of the distributors and 83 percent of the manufacturers surveyed say they need to work better together to reduce costs, as either very important or extremely important. The bad news is that both these channel companies also said they did not have the time to work on these costs.