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FEATURES: 1

Assistance declined – to save money?



Is such assistance really not accepted by some papermakers? Then why not? These are the questions we want to look into.

It is an essential requirement of our times that we must all consistently reduce costs and increase efficiency. Everyone is struggling to find out how and where savings can be made. Ultimately it’s about large sums. But even small amounts have a contribution to make, since the pressure on costs is enormous.

Inevitably in the search for savings everything that is purchased has to come under consideration. Purchasing Managers are under pressure to ensure price reductions – under the motto “The cheapest purchase is the best purchase”. The 'cost' of such cheap purchases is often paid for in the paper manufacturing process.

Obviously there will be discussion as to what savings can be made at home. Personnel? No, we are already at minimum levels. Production processes? Hardly, we have already done everything. Perhaps we should ask the crews again. But their suggestions always cost so much, after all we have only just ...

This could be the scenario – certainly much simplified. Therefore now a more concrete approach:

Does the motto 'cheapest purchase' really have unrestricted validity?
No, this principle in the present climate is not quite correctly formulated: “The ‘best value’ purchase is the best purchase” would be more precise. The difference is small but important – and of towering significance. Not to be aware of it could in the end be dearer rather than cheaper. As an entrepreneur recently said pointedly “I simply don’t have the money to buy cheaply”.

A further and in the medium term existential determining factor must also not be underestimated. Excessive price pressure ties the hands for a period of those from whom, in addition to the supply of technical consumables e.g. machine clothing, also their innovative further development is expected. What value is it to a super modern paper machine, if the basic consumables without which it cannot be run, can reliably no longer be further developed to the required high level?

Particularly included at this high level is the development of the clothing performance, which – in addition to purely technical factors – influences the production process by significantly reducing costs and simultaneously increasing profitability.

And – last but not least – there exists for all papermakers the inherent risk, initially fairly inescapably, to be temporarily influenced by, and at the mercy of, apparently useful suppliers from the lower price ranges – particularly those who invest more in taking market share than in serious technical development. “At the mercy” particularly if the market dominance thereby achieved leads to a high price dictate, which then cannot be avoided owing to the lack of qualitatively reliable and innovative alternatives. The necessary innovation forces for all which are fed by a normal healthy level of competition would in such cases no longer exist.

“Black propaganda or horror scenario?” – No. There are already sufficient examples of such developments in the world economy – and we all know them.

At this point an old commercial saying is relevant: “Competition stimulates business”. The word “stimulates” can easily be replaced by the phrase “is kept going by price-value diversity”.

Please note that the above is only a sample of the published article. For the complete article, please become a subscriber to the TAPPSA Journal
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