Welcome to What the Duck?! A podcast with real experts talking about direct spend challenges and experiences. And now here’s your host, SourceDay’s very own manufacturing Maven, Sarah Scudder. Thank you for joining me for What the Duck?! Another Supply Chain Podcast brought to you by SourceDay. I’m your host, Sarah Scudder, and this is the podcast for people working in the direct materials part of supply chain. I’m @SarahScudder on LinkedIn and @Sscudder on Twitter. Today, I’m going to be joined by Robert Seifert, and we’re going to discuss how to find additional cost savings. If you work for a manufacturer and are looking for ways to save money, then this episode is for you. Robert is a senior buyer with Good Sense Foods. He manages flexible and rigid packaging as well as commodity spend. He has led several successful cost-saving initiatives throughout his career. Welcome to the show, Robert.

I want to go back in time and have you share a little bit about your personal story and how you got your start in manufacturing. I was going to school, or college, I should say, for mathematics, and I was planning on becoming an actuary, dealing with concerns, risk, and that’s the big math Guru, and kind of wanted to go that route, something in analysis. As I was graduating college, going into possibly my Master’s Degree, I started—I had a kid, so my first kid, big life team, yep, so big life change. I opted out, do not go for my Master’s Degree, and went to get a job. So, I got hired on by Angie’s boom skip up at the time, working as an inventory analyst for about a year, and then a guy by the name of Dean zero actually, who I work with now, hired me on as the inventory analyst, and then shortly after that, like I said, a year later, I was promoting a buyer. I was pulled into corporate, really had no experience and started in that room, right?

And so at the time, it was more like being managed by an individual overseeing every step of every move made, and then gradually kind of leaning to you’re taking over things, right? And so that was more like buying a lot of popcorn, sugar, salt, and packaging and coordinated pretty simple. And then later on, so that was like at the onset of this company starting, really. So backing it up a little bit, it was a newer company and they’d been around a couple of years, and they got this big Costco promotion right about the time I was coming on. And so it was launching from like one ship to essentially like almost 24/7, three different ships. At the time, I was becoming this buyer, and so it became a little bit complex, say the least, but learned a lot.

You mentioned at the very start of your career, you started as something called an inventory technician. So what specifically did you do in this role? Because that’s not a term I hear a lot but more like an inventory English. But so what I was doing was closing jobs out and sharing inventory accuracy. Production jobs for a week or Fitness Goods. I was essentially overseeing them and then and sharing an inventory was placed into these jobs accurately, as well as like analyzing which jobs are producing more waste and then trying to go after some type of improvement around that.

And in that role, so inventory was your world. What were your what was the biggest pain point that you were dealing with and how did you make improvements or solve some of the challenges because managing inventory is tough? Yeah, so when we were early on, there was a lot of Excel spreadsheets and so a lot of traceability was a big thing, right? As well pretty tough. So we implemented or at the time I first started there, I worked with a guy named Joe here, is that I worked on implementing PeopleSoft at the time. So that was a challenge in and of itself to like launch this new MRP ERP system and then nobody there had used one really and making that work, right? So it was a big challenge, but it ended up helping us, I will save us a lot of time.

Then you were promoted to something called an inventory control analyst, and one of the things that you did in this role was manage inter the internal materials schedule, again another very, very tough role, right? You don’t get a lot of credit or kudos when things are running smoothly, but something goes wrong and everything blows up, right, and it’s a disaster, in the end, the world. So what was your strategy for managing your materials?

So at that time, I wasn’t the buyer of the materials. I was the, so if I would bring it into a warehouse off-site and then we’d have to manage them from the site to the location, right? And so it was really like we had x amount of space, X product, you know typically will run on an X number or Y number of lines, it typically runs on one large. So we had four lines at the time, so then we ended up having five eventually. But so you would factor in most of the runtime on a certain product. What’s the pounds per hour, cases per hour, and then build your racking accordingly, right? So high running items, you know all over in the racking, closer to the point of views type of situation, but yeah, it was like breaking down the amount of space into X number of items and how frequently they’re used, and we had a truck that came like every three hours, and so it had to be like we had a very tight facility too, we only had like a hundred and some spots for everyone to learn. When you say a truck came every three hours, you mean a new delivery came, or a truck came every three hours that was picking up product for your customers, it was like two to three hours, but it was product that was outgoing from our production facility, so finished product would go to the warehouse, and on the return trip, it would deliver materials, and so we had to time it to keep our acts full in the warehouse and not run out of material. This is a very limited space that our production facility was super small, so that’s why we had to have everything delivered off-site and then shipped over, and so it was really just managing those materials, but yeah, strategy was all about, you know, runtime frequency and Facebook.

So, you, the theme of our discussion today is around cutting costs and finding kind of additional ways to save money that aren’t so obvious. And I feel like you started doing this very, very early on in your career. So when you were serving in this role as an inventory control analyst, how did you work with your team to help save the company money? A lot of ways. So, we had to look at not only warehouse space. For instance, we had too much warehouse space that we were paying for. So, it was like refining the needle as to what we need to carry given the lead time to support customer demand and planning demand, right?

And so there was a lot of, ‘Let’s look at customer order frequency, let’s look at incoming materials, let’s look at it as a whole and then break it apart and cut down 50% of the space and make it work, okay?’ And so you’re obviously where you’re paying for a lot less warehouse but it’s right here, here, yeah, trying to eliminate touches and things of that matter to improve efficiencies, a lot of that in the human sort of endless role. Later on, in like, I felt it became more like when I was a buyer, I was working in League supply chain, so that’s where a lot of the continuous improvement methodologies kind of came from the success, I guess.

After you served in this inventory control analyst role, you became a procurement specialist, and you purchased a lot of corrugated packaging. What was the hardest part when you were buying or managing this category? Vendor relationships with some child suppliers and then you take a deal with that. So you reach out or you bid out the business to a more efficient supplier, and then hopefully you have a better cost. In that case, it was with Green Bay and a little smaller companies, we’ll say. And then we moved into the realm of the WestRocks and the International Papers of the world. Just saw service level go way up in comparison. I’m not saying that Green Bay was bad, I’m saying some others that we had were bad, but for no knock to any corrugated companies, just different service levels.

One of the biggest issues we had was for a Costco project. We were doing these trays with excavators, and you know, we put like 38 bags that were 18 ounces, I believe they were, but the design really wasn’t done by an engineer, let’s say. It was kind of more supplier-related, and they’re relying on their expertise, right? And so what ultimately happened was these things were getting damaged in transit. They’re falling apart, they’re breaking, and so we increased the design or we reached out to engineering later when we were in the progression of this thing right, and tried to get some help, see what we could do right.

So, we re-altered or we redid this design for another large Costco MBM, and so it was like ten thousand pounds or something like that. We put it in our warehouse, and the humidity got to it. And if you’ve ever watched the bottle flip YouTube video where the forklift driver goes in and grabs the bottles and all of them fall over, those this type of scenario. And so it became like all hands on deck, what do we do, what do we do to fix this? And we got to pay more money to get a better design. Yeah, we’ll struggle, struggle from getting up people to fix this on time, getting the design corrected, satisfying the customer still. And in the end, we cut the business, and we still have the business with him. So, it’s a good reminder of why not to cut corners and don’t only focus on cost when you’re a small company.

I think you, you just think that you can rely on some folks sometimes. The second opinion is very valuable. So, you were promoted from a procurement specialist to a buyer planner role. What were the biggest direct-to-materials challenges you’ve faced in this role? So it was going from like, I kind of went through this from the beginning to kind of rush through all the titles, kind of laid them in the inventory analyzed them and buy it, right? But human specialists more that like, ‘Hey, we’re kind of, you’re kind of learning the ropes, we’ll give you a few things to buy,’ and then the buyer realm was more like, ‘Hey, I’m going to manage this contractual spin from my manager standpoint, and you’re going to do everything else,’ right? And then at the same point, we brought on coal manufacturers. So we have coal manufacturers on the west coast, we had them in Phoenix, and then we had some in northern Minnesota, Department of, and then we had some out on the east coast in Ohio. And so the big challenge was like managing all of that from like paintbrush and then also the time zone difference.

So it was like starting work at 5 a.m and then to work at 8 p.m because people are calling you at all different hours of the night. We also have 24/7 operations so I both follow me in the middle of the night and a lot of it was like can’t find the same report, you know you have a system that’s tracking that and it says we’ll be there, why don’t you put it there then, the man of finding it right? But yeah, that was a big challenge just taking on so much at once, so many different locations with so many different items. And at the time, like when I started preparing, so I was just buying like popcorn, sugar, silicon oil, right? Well, then I became like, ‘We gotta buy chocolate-drizzled items and we got, I gotta buy stuff for the NPD teams and I gotta buy, you know, so the list goes on, right? And there’s just a lot of challenges in growth and development, yeah.

In this role as a buyer, what cost-saving strategy did you implement that you felt had a big impact at the company? Well, there, so like the first one I did was pallets. I just picked one, an easy color. Like we were paying out the Wazoo for pallets, so that was a quick one. We also, like, so that was what I kind of differentiate them in the two, like wood and blue or wooden jump. And what did you do? How did you cut costs without impacting production or quality? Negotiation with current volume and growth and, you know, I leveraged that against the trip of the world and got to go down to a flat rate instead of right total fees, and it ended up saving like a hundred thousand dollars, not a big one, but just a nice little start to the career, right? And then from there, it was like different corrugated or flexible spending improvements.

You transitioned to a company where you were a materials planner, so again all kind of in the buying realm, a lot of direct but progression in your career. So what was the most important part of your job as a materials planner? So that was right at the acquisition where ConAgra procure changes about and so that’s what they kind of call their buyers. Well, they have Commodities managers that work at corporate and then buyers. So I no longer really would manage managing any Commodities. It was just managing the flexible spend or sorry, the flexible packaging and corrugated. So they kind of left that in my room and then I would buy off of their contracts for the other remaining Commodities. But it was a heavy focus on, okay, at the time I had to buy for when we stepped back, we had also implemented a facility in Reno, Nevada, was this a manufacturing facility, brand new manufacturing for sodium.

Reno, kind of in the process of all those commands and in my transition, right? And so I no longer had to procure for the coal manufacturers. I just had to procure for my facility in the Reno, Nevada facility, so they were direct owns, right? And so that was one piece of the puzzle. So, you know, with the co-manufacturers, a little more turn key, so it’s a little easier with another facility of ours, I had to purchase everything for them. So, it was a little bit much. And at the same time, they have a lease or a CPS, a continuous Improvement system, or continuous performance system where they break apart these pillars. And one of the pillars I own was the supply chain. And so I had to formulate a team with our production planner, a warehouse manager, and then several subject matter experts depending on what the Improvement projects were. But the idea was that he was spending 50% of your time on the floor and you do improvement projects. So I own the lea supply chain, I had to mentor the lean supply chain to the renal facilities manager over there, so they could implement it. And then I also owned the changeover daily management system. So any line that changes over a product, I’m working on improvements to do that right. So lean supply chain covered like a lot of schedules here and schedule attainment case will finish good non-finished good day supplies and dollars, and so it was improvements around those, but it was mainly we had key objectives as a team and then how do we relate up into those to improve them, right?

So if a team was working on, let’s say, an AMD team or an autonomous machine development team was working on improving case fail by like improving the scale, right? So they break the scale apart, mind you, we join these teams then too, but we go down there before we break the whole scale apart, we clean it, we inspect it, we detect it, we correct it, and then we prevent it, right? So it’s all about kind of that process and the lean supply chain. And then in the changeover daily management system from a buyer’s standpoint, it wasn’t really about a lot of like Improvement in the arrows, really just staying tight to what you set your goal for day supply and dollars will be on your budget.

And what would you say, I mean, Improvement obviously is an internal kind of cost savings and that you can, you’re doing more right with the same or less resources. Was there anything that stands out though that was from a hard dollar cost savings that you were able to garnish from these in-process improvements? Well, a five dollars hard to put on it, but you know, we cut our changeover times from like six minutes down to a minute, so a lot of outcome, a lot of cases for a little Improvement. And also like on some of these AMD teams, you know, you’re taking a bagger that’s running pretty poorly in or a machine that’s the chief focal quantity production facility and you’re taking the Improvement and they’re gonna run a lot better, breaking down a lot less. So it’s hard to put a real number on those cost savings improvement.

You work in the food industry still, which is a tough space to be because you’re buying things that have what I call short-life materials, so things that can expire go bad. You’ve gotta have demand planning and forecasting really buttoned up because you buy too much you’re going to be throwing things out because it’s going to expire or no longer be good. What is your demand planning strategy now given that you have such short-life materials and things that you’re purchasing?

From a buyer’s standpoint, I won’t be specific to the company I work at, but you know, this is my approach typically anywhere, is you know, if I had to follow, look like on the existing item, right? So what’s the historical look like? Is it trending up or down? And then what’s the shelf life on that product, right? And you know, it’s really, and then you also have a space filtering too typically, right? So you gotta mix it to a meshing of the two to formulate basically like that line it was saying right, or like your minimum inventory, your safety stock. So a lot of it’s been, you know, minimum, minimum inventory, safety stock trigger, but like on your existing items, you know, heavy-selling items, you want to, you know, you want to contract long to or try to contract as much as you can right to try to get that price point down. There’s some, unlike some of the riskier items, it becomes, you know, maybe order a little less to pay a little more, right, so we don’t sit on it too long or maybe we bring, maybe we bring in that NLP if needed.

And that’s all we’re doing, just to keep the wrist down or the shelf life from aging. So it’s just like a lot of strategies, just depends on the product, right? Technology has come quite a long way since you started your career. How have you been able to leverage technology to help find more cost savings?

I gave an example previously how we leveraged the ERP system, right? And then we obviously leveraged SAP too, right? So, previous to those, was a lot of like manual scorecards, manual data tracking, manual metric tracking, and then, you know, implementing Life, for instance, at our plant, be able to details behind the backers where I get one of the download.

Any other tips or tricks that you can share with the audience? So, our target is small mid-size manufacturers, people who are, you know, being very, very cost-conscious while at the same time don’t want to impact their quality or impact their timelines to their customers. There are few people in the right positions within the company. So they can make the right decisions. Not only that, and key processes developed so that people are seeing and run infrastructure right. It’s all aa bit of a chaotic environment. But then from like a buyer standpoint, it’s just really digging into the data. You got to dive into data, see what you like. I see a lot of people just making repeated buys without ever trying to negotiate. And so I think there’s always room for negotiation to save whatever you can for your company. And so the more you negotiate, the more you’re gonna save, right? So that’s another trick. People are afraid to negotiate. They just ask for a price, and the supplier tells them a price, and they don’t kick back, and they just relay costs. And I think there’s a lot of them.

Robert, thank you for coming on our show today. If you missed anything, you can check out the show notes. You can find us by typing in ‘What the Duck?! Another Supply Chain Podcast’ in Google. To have optimal search results, make sure to add ‘Another Supply Chain Podcast’ at the end of your search. This brings us to the end of another episode of ‘What the Duck?! Another Supply Chain Podcast.’ I’m your host, Sarah Scudder, and we’ll be back next week. Thank you.