Page 56 - The Inside Scoop Archive

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l If you have been reading The Inside Scoop for very long, you will know that stretch film can be made
up anywhere from 1 to 9 layers, utilize a wide variety of resins types and grades from off spec butene
to better grades of hexene or octene, to even higher performance resins such as metallocene and
polypropylene, and in a variety of combinations. But an even more important factor in the manufacture
of value added stretch film is the formulation, the process equipment, the quality controls in place,
and most of all the person or system that makes it all come together.

l Reverse auctions on stretch film typically ask for your bid on a yearly usage of stretch film lumped
together. For sake of this discussion, let's say it is for 100 pallets of 80 gauge 12" x 1,500' hand wrap
and 100 pallets of 80 gauge 20" x 5,500' machine film. Ok, there it is, so what's your best price?
Sounds simple and staightforward enough doesn't it? Not on your life!

l First, all 80 gauge films are not the same. Some manufacturers put resin seconds so low in quality into
their hand wrap that you would think they were floor sweepings. The film has no guts or holding
power, but it is 80 gauge, and costs a whole lot less to make than 80 gauge hand wrap that is made
with a hexene/butene co-extrusion etc. If you accept his low bid you deserve what you are going to
get in the way of shipping damage and handling problems. Yet you are asking the ethical manufacturer
who is furnishing you a quality product to compete on price with the manufacturer who does not worry
so much about quality because he knows that you are more interested in the price per pound than you
are in how the film performs. You may take the "out" of specifying in the bid that all films quoted
must meet your quality spec. But your quality supplier does not know who the low ball pricing is coming
from and has to assume it is from another quality supplier like himself. Hey, here's that ethics thing
again.

l Another of my observations about reverse auctions is that many times the film that the auction is
specifying is not the stretch film that the customer is actually using. Last year a grocery company on
the west coast ran an auction for 70 gauge hand wrap when they had been using 47 gauge hand wrap
for a year or more. Their logic was that if the 70 gauge bids came in low enough they could force the
current 47 gauge supplier down some more on price. We have seen this type of thing play out several
times in the past year or two.

l Reverse auctions greatest failure is that they assume all films are equal and ignore the real cost
reduction, not smoke and mirrors, that value added films can bring to your company whether on hand
wrap or machine film. NPS has worked with a number of major, national companies over the past few
years to reduce their stretch film requirements from 80 gauge on machine film to 51 guage or lower;
and on hand wrap from 80 gauge to 47 gauge or lower. Literally, our customers have saved hundreds
of thousands of dollars in film costs while wrapping their pallets more securely and productively.

Ok, if reverse auctions are not the answer, how do we accomplish our real objective of controling and
reducing our stretch film cost? The best way to truly reduce your "cost" for stretch film, and not just a
few pennies on the "price" is to work with a distributor who has access to the latest new technology value
films, and is willing to partner with you to use these films to help you control and reduce your "cost to
wrap", and not just use them to increase their profit. If you don't know a distributor like that, give us a
call and we will help you find one.

file://C:\Documents and Settings\William Jackson\Local Settings\Temp\tmp73.htm 1/28/2007