Tracktile’s Post

Want to Lower the Purchase Price of Food and Goods? Lowering the purchase price of food and goods can be effectively achieved by companies just bypassing brokers and intermediaries, and sourcing directly from producers using a different purchasing strategy. Here's a detailed plan: 1. **Direct Sourcing**: Establish direct relationships with farmers, manufacturers, and other primary producers. This cuts out middlemen, reducing costs and ensuring transparency. 2. **Joint Ventures**: If your company isn't large enough to source alone, consider forming a joint venture with other similar companies. This collective approach can increase purchasing power and facilitate direct sourcing. 3. **Trade Shows and Factory / farm Visits**: Actively participate in local and international trade shows. Visit factories and farms to establish direct contacts and negotiate deals. This hands-on approach provides a better understanding of production realities, rather than relying on second-hand information from salespeople. 4. **Build a Procurement Team**: Develop a dedicated procurement team within your organization. This team should focus on sourcing products directly from producers, negotiating prices, and ensuring quality. By having a specialized team, you can streamline the procurement process and achieve significant cost savings. 5. **Implement the "Source to Consumer" Philosophy**: Truly embody the "source to consumer" model by making direct sourcing a core strategy. This not only lowers costs but also builds stronger relationships with producers, leading to better quality control and supply chain efficiency. By taking these steps, food service and retail companies can significantly lower their purchase prices, improve product quality, and gain a competitive edge in the market, while sharing the gained margins with employees of the production source.

How to Supply Quality Raw Materials for the Food Industry? Introduction: Supplying quality raw materials for the food industry is one of the main challenges in this sector. In this post, we will explore practical solutions to improve the process of sourcing raw materials. 1. Research and Select Reliable Suppliers: Thorough research and selecting reliable suppliers is the first step in ensuring quality raw materials. Reviewing the history and certifications of suppliers can help ensure the quality of raw materials. 2. Evaluate the Quality of Raw Materials: Before purchasing, evaluate samples of raw materials. This evaluation can include chemical and physical tests to ensure the quality and safety of the materials. 3. Utilize Modern Technologies: Using modern technologies such as supply chain management systems and warehouse management software can help improve the supply process and reduce costs. 4. Close Collaboration with Suppliers: Maintaining continuous communication and close collaboration with suppliers can help improve quality and reduce supply issues. This collaboration can include periodic visits and joint meetings. Conclusion: By following these tips, you can improve the process of sourcing raw materials and enhance the quality of final products. What are your experiences in sourcing raw materials for the food industry? Share your thoughts and experiences in the comments section! #FoodIndustry #SupplyChain #QualityControl #RawMaterials #FoodSafety #SupplierManagement #FoodProduction #SustainableSourcing #FoodQuality #IndustryTips

🍏 Are you in the food & beverage (F&B) sector grappling with the unpredictability of paper packaging expenses? In the competitive landscape of the F&B industry, every decision can significantly impact your business. Packaging costs are no exception. But what if we could help you unpack the elements contributing to your packaging costs and sharpen your strategy? We understand that transparency in the raw materials supply chain can seem challenging. That's why F&B buyers must have a clear insight into the factors affecting their packaging prices. 📈 📊 Explore Fastmarkets’ index builder – a modeling tool crafted for clarity. Whether you're puzzled by the rising costs or keen to stay aligned with industry averages, our tool employs robust price data and cost benchmarking to uncover paper packaging price dynamics. 🏆 By leveraging our trusted indices, you can ensure your business thrives in this fiercely competitive market. ✅ Learn more about our index builder and transform your procurement strategy today: https://fmrkts.com/44og18F ✅ Get started with Fastmarkets' FMCG suite and overcome the risks associated with volatile raw materials markets: https://fmrkts.com/4dmAWx2 #FastmarketsForestProducts #FMCG #packaging #procurement

What’s behind your packaging price? 🎁 Access our free guide today: https://fmrkts.com/4bCdeeN Are you struggling with fluctuating paper packaging costs in the food and beverage (F&B) sector? Our new guide dives into the factors behind your packaging prices, offering insights and tools for better cost management. 📈 📊 Whether you're involved in sourcing, managing costs, handling supplier relationships, or negotiating contracts, our advanced index builder will enhance your procurement strategy and improve negotiations with suppliers. 🔑 Unlock the secret to smarter packaging procurement in the F&B industry with our latest comprehensive scenario models. From understanding price drivers to negotiating better deals, we've got you covered. ➡️ Explore our FMCG suite and make the right decisions in the volatile raw materials markets: https://fmrkts.com/4e2OaQ0 #FastmarketsForestProducts #FMCG #packaging #procurement #food #beverage

After the working with Brad and seeing these strategies in practice, I strongly recommend reading this article and connecting with Brad to discuss in more detail.

Navigating Milk Price Increases (Dairy Category Negotiation) Trigger for Review: · Specific attention should be given to the milk category, where even a small change in MRP (e.g., Rs.2-3 per ltr of Milk) can significantly impact the cost of derived products like Paneer and Curd. Market Survey: · Conduct a market survey to gather data on current prices for milk and related products. · Compare the vendor's proposed prices with prevailing market rates. · Collect information on factors driving the price increase (e.g., supply chain issues, raw material costs, inflation). Vendor Negotiation: · Initiate negotiations with the vendor based on the market survey data. · Discuss the justifications for the price increase provided by the vendor. · Explore possible ways to mitigate the increase, such as adjusting order volumes, changing product specifications, or finding cost efficiencies. Impact Assessment: · Analyze the impact of the price increase on the overall cost structure, particularly for products like Paneer and Curd. · Assess the direct correlation between the milk price increase and the derived products' cost. · Calculate the revised cost of production for Paneer and Curd based on the new milk prices. Decision Making: · Based on the market survey, negotiation outcomes, and impact assessment, make a decision on whether to accept, reject, or further negotiate the proposed price increase. · If the price increase is accepted, update the contract and pricing structure accordingly. · Communicate the decision and revised rates to all relevant stakeholders. Special Consideration for Milk Category # Direct Cost Impact Analysis: · For each Rs.2-3 increase in ltr milk MRP, estimate the corresponding increase in the cost of Paneer and Curd. · Use historical data to establish the cost relationship between milk and these products. Adjusting Pricing Models: · Ensure that the pricing models for Paneer and Curd are flexible enough to accommodate small but significant changes in milk prices. · Implement a formula-based approach where the cost of Paneer and Curd automatically adjusts based on changes in milk MRP. Vendor Contracts: · Include clauses in vendor contracts that specifically address the handling of significant price increases in key raw materials like milk. · Define clear thresholds and processes for renegotiation to ensure both parties have a mutual understanding. By following this structured approach, we can effectively manage significant price increases, ensure fair negotiations with vendors, and maintain control over your cost structure, particularly in sensitive categories like milk and its derived products. #Procurement #Negotiation #DairyCategory #MilkPrices #MarketAnalysis #VendorManagement #CostEfficiency #FoodIndustry

Raw Milk Balance and Raw Cream Balance The Raw Milk Balance provides a comprehensive view of the raw milk procurement plan, indicating the amount of raw milk intended for purchase on a monthly basis during the upcoming year’s planning period. On the other side, the results from the multi-step recipe-based material requirement calculation show the raw milk demand generated by the planned sales or production of finished products. This allows us to identify any potential raw milk capacity shortages or any surplus available for sale. The Raw Cream Balance reflects the raw cream generated as a byproduct in the production process, while the other aspect illustrates the raw cream requirements generated by the production of additional finished goods. Again, the balance between these two sides reveals potential deficits or marketable surpluses. We can conduct this analysis throughout the year, utilizing adjustable sales and BOM parameterization, while simultaneously comparing multiple planning versions. This is facilitated through self-service calculation processes directly invoked by the controller via an Excel client.

One of the working formulas to calculate the cost and selling price with margin for a bakery product: 1. Total Cost of Product: \text{Total Cost} = \text{Ingredient Cost} + \text{Overhead Cost} + \text{Labor Cost} + \text{Packaging Cost} + \text{Waste/Spoilage Allowance} 2. Selling Price with Desired Profit Margin: \text{Selling Price} = \text{Total Cost} \times (1 + \text{Profit Margin}) Ingredient Cost: Total cost of all ingredients used. Overhead Cost: Rent, utilities, equipment depreciation. Labor Cost: Wages for preparation time. Packaging Cost: Cost of boxes, bags, and labels. Waste/Spoilage Allowance: Estimated cost to cover unsold or spoiled goods. Profit Margin: Typically between 30-50% (expressed as a decimal, e.g., 0.4 for 40%). Example Calculation If your costs for a product are as follows: Ingredient Cost: $1.50 Overhead Cost: $0.30 Labor Cost: $0.50 Packaging Cost: $0.20 Waste Allowance: $0.10 Desired Profit Margin: 40% (or 0.4) 1. Total Cost: 1.50 + 0.30 + 0.50 + 0.20 + 0.10 = 2.60 2. Selling Price: 2.60 \times (1 + 0.4) = 2.60 \times 1.4 = 3.64 So, the selling price should be $3.64 to achieve a 40% profit margin.

Hey supply chainers, let's talk about concrete examples from various industries. 💊⚙☎🖥📦🚂 Here is one of mine... I worked in the dairy industry years ago as supply planner. Milk products don't have high margins. So sourcing them from far away was not an option because transport would be too expensive. Also, every day spent shipping the product meant less remaining shelf life for customers. ❌ So global sourcing was simply not an option for milk products. How about your industry? #CareerCompanion #sourcing #procurement #globalsupplychains #global #glocal #local

Hey supply chainers, let's talk about concrete examples from various industries. 💊⚙☎🖥📦🚂 Here is one of mine... I worked in the dairy industry years ago as supply planner. Milk products don't have high margins. So sourcing them from far away was not an option because transport would be too expensive. Also, every day spent shipping the product meant less remaining shelf life for customers. ❌ So global sourcing was simply not an option for milk products. How about your industry? #CareerCompanion #sourcing #procurement #globalsupplychains #global #glocal #local