Logistics/Supply Chain/Pricing

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Question
Mr. Sheriff


I am starting a small production business. I use a tropical vegetables as raw materials. This raw material is imported by local importers and i buy from distributors. My monthly usage is
1 palet (60 boxes).
Main problem: I am located in Montreal (Canada, Quebec), they import from abroad and is paid in $US , this causes a lot of variation in the price of the raw material.
The only way for me to manage this variation ($CA 55 to $CA 72) was for me to cut as many middlemen as possible but i did not have any success yet.
I buy only one palet at a time (it is not a big bargain position). How can i manage this ? i need a better control on the price of my material?
How can i manage my supply chain with the just ONE palet(60 boxes) to do the pricing of my end product? if i do not control the price of the raw material

Thank you

Answer
Hi Claude

Just curious - Did you evaluate the multiple approaches that i had suggested you for reducing Raw Material Cost.

Coming to your question here.

1. To understand the Pricing fluctuation you can go for Forecasting based on historical data of the Price Variation of your Raw Material, which will suggest that when will the lowest pricing point happen in a given Season / Year

2. The Pricing of the Output is in your hand (as we know the Input/ Raw Material Cost is not in your control). You can have a competitive Selling (output) price by adopting the following measures

a) If your Storage cost is cheaper then try to forecast and procure it when the raw material is at its lowest.
b) Reduce your other Operating costs like Rent, Labour, Finished Goods Packing

If you need more help on the above points please provide additional info

Regards
sheriff

Logistics/Supply Chain

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mohamed sheriff

Expertise

Transportation, Warehousing, 3PL Operations, Logistics IT, SCM Strategy and Execution

Experience

Logistic Operations and Logistic IT

Publications
Participated and presented papers at a few Leading Conferences on Logistics and SCM, Written an Article on RFID for CII Logistics

Education/Credentials
M.S in Logistics

Awards and Honors
i am Certified Supply Chain Manager from ISCEA

Past/Present Clients
FedEx, Kuhne Nagel, DHL Exel, UTI

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