Sourcing - October 2007
NAPCO
is committed to expanding our Eco-Friendly and Environmentally
Responsible products and programs offered to our customers.
We
felt that it would be beneficial for everyone if we shared some of our
requirements when sourcing products as well as explain some of the
challenges involved. As many of these items and programs are
new
to us, we welcome your input.
SOURCING
- Obviously, any new products that we
offer as part of
our EF (Eco-Friendly) Initiative must have some certifications or
benefits to the environment. While there is not currently a
set
requirement, we intend to only offer products under this initiative
that make sense to us and to our customers.
- There also must be a demand or at least
a potential
market for the products. Commitments from our current or potential
customers that share our goals is very helpful in making the decision
to bring products in to stock. Manufacturers and
redistributors
are typically not very open to product returns and will rarely offer a
buy back program without penalties such as return freight and
restocking charges.
- A reliable supply chain is key in
sourcing all of
our products. Whether through a direct relationship with a manufacturer
or through redistribution, we do not want to run you out of what you
need to run your business or maintain your facility. At current, some
of the lines that we are looking at pose some risks in this area.
Future demand for products should lessen these concerns.
- Cost to our customer is also an
important factor in
deciding which products we will stock. Being in the wholesale
distribution business, margins are often tight. Being that many of
these product lines and technologies are relatively new, some costs may
still reflect the manufacturers research and development costs and
other startup expenses. We want to offer you these products at costs
that are reasonable comparative to what other companies are selling
at. At the same time, there must be some level of
profitability
for us in order to stay in business.
CHALLENGES
- Beyond the challenges that are likely
outlined in
the sourcing information above, transportation and storage of products
is yet another concern. At current, we have
several customers
as well as potential customers that are interested in products made
entirely of PLA (Polylactic acid or Polylactide) which is a plastic
made from corn. Due to the heat sensitivity of these products it would
be incredibly difficult for us to insure that our customers received a
100% quality and usable product. Today, in October, there would likely
be no problems. During the months of April - September, at the very
least, the transportation to our facilty would most likely require
refrigerated trucks. There would also be a need to add some climate
control to our facility and to adjust delivery schedules to accomodate.
While we haven't given up on a solution to these concerns, we also feel
that there will likely be advances in the manufacturing process to
address the heat tolerance of PLA. In the interim, many of our
plastic products that don't fall under the EF Initiative do contain
end-of-lifed post-consumer recycled product that would have otherwise
been landfilled.
- Breadth of product line is another
challenge. Our
initial plans are to source core products that work for a wide array of
facilities. Specific items that may only appeal to one
facility
creates sourcing and stock issues. As we progress, we hope to have a
wide array of EF Initiative products that will suit all of your needs.
In the meanwhile, your support is appreciated.
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