To all of our valued customers and to anyone that is interested in our company:

 

 

My name is Kurt Rozek and I am the president of Ire-Tex Corporation. I have been in the business for 28 years as of this writing. I have worked in corrugated, foam, and wood packaging for most of my life and I have been part of the Northwest community of packaging folks for 21 years. I love what I do and I have devoted a large part of my life to seeking out the best solutions for packaging problems and opportunities for the nice folks that I have worked with.

 

First, I would urge you to browse through our sight and see what we do. More importantly, though, go through the “Library” and check out the documents and tools that are available for downloading. These are items that I have used for years and now they are available to everyone. I developed a lot of the spreadsheets myself and spent a bit of time finding the best “nuggets” on the web. If you want to see more information added, just let me know! Check out the “News Room” for our News Letter Archive as well as our Video Link for packaging related items that we think you might like. Take a look at the “FAQ” section that responds to Frequently Asked Questions. We hope that you send us your questions so that we can add them to our FAQ section!

 

This is the very first news letter of many monthly letters to come. These letters will not solicit your business or ask for continued patronage. I want to speak to real issues in our packaging communities and address your interest and concerns as well. I have several topics in mind but I would really like to hear from our readers. I want to talk about things that interest you. We know that the items that have our attention change quickly so it’s important that we are talking about the issues of the day. If you wish to add to our news letter I would welcome any contribution that is relevant.

 

In the months ahead, I will put together news letters on packaging cost and a number of related items regarding how these costs affect us and what we can do to offset increases. I want to address short quantities and why pricing changes with the quantity ordered. I will also talk about inventory and Delayed Distribution. I will be getting into “green” packaging and some of the environmental concerns that we all have about packaging. The economy will provide an article or two, as well. I may address some how-to issues and answer a few questions that we hear quite often about real packaging problems that our customers have. I may insert articles or give you links that provide you with more information on a relevant topic.

 

It is not my plan to be long-winded, so I promise to keep the articles short – maybe a page or two. If you don’t want us to send you an e-mail when the latest News Letter is out, just let us know! We never want to be a burden and we know that you get a lot of e-mails just to get your job done!

 

Packaging costs are up, in general. But things are changing quickly…

 

I didn’t tell you anything earth-shaking there, did I? But everyone is hurting in this recession and the playing field is definitely moving in favor of the buyer. It may be dramatic in the long run. It’s time to be smarter than you have ever been before. Here is what we have seen: Nearly all of our suppliers came in with an increase in order to shore up sagging profits in the fall. Now that the business has fallen off the cliff, they are out with decreases – decreases that are too small to make a difference. Pricing isn’t creating our problem – from the top down it is a real lack of business across the board. I haven’t seen a hard push for price cuts but they are coming. There will always be a belief that the loss of profit is always cost related. So I expect that purchasing folks will be pressing harder for decreases in order to save their jobs. This pressure will push the playing field hard to price reductions and there will be more demand on suppliers to hit a home run with game-changing strategies. I believe that we are all going to be working with less and clamoring for what’s left of a smaller market share. A lot of companies are on the wrong side of the bubble and will have a hard time of getting through this recession. A lot of good companies will be merged or find alliances that make sense. In the mean time we will all be changing how we do business and, in a big way, how we make money. This is a real test for all of us and we need to work together – more now, than ever before.

 

So what is your strategy? Press for better pricing? Follow the Wal-Mart method and take no prisoners? Get into a different line of work – maybe a test pilot? Lion taming might be safer and have more job security!

 

I think it is time to firm up what you really want from your vendors. It’s time for serious communication about how your company is changing and how you need your vendors to change. Find out what they can offer and use any leverage that they have. Does a lack of business mean that your vendors have some holes in their warehouse? Can they help reduce your cost by reducing your material inventory? Can your vendor take over some of your distribution? Can they find ways to reduce your finished goods? These are the cash issues for your company. Profitability is in the sand and your cash position is the only thing that will get you through a recession like this.

 

Here is my plan. I want my vendors to offer innovation in materials and designs. I want my vendors doing everything they can to reduce my inventories by being smart. I want my vendors to give me a break on buying shorter quantities. I want my vendor to help me attract new business and streamline how they deliver products. I know there are trade-offs but we need to sit down and have a real chat about the investment that I have made in them and the investments that I have made in my business that uses their materials. It’s time for a candid chat about what we can do for each other. Together.

 

Kurt Rozek