Tips on Managing Your Total Cost per Purge: Inventory and the Case for Larger Order Quantities


Reduce Cost per Purge.jpg

Purging compounds are a unique material in the plastics world. As such, they deserve a category separate from production resin inventory. However,  they are often being lumped in with other plastic materials on hand, and subject to the same level of inventory control. They get factored into inventory turns or managed on a short-term expense basis, to balance operating cash flow.

For this simple reason, they are typically stored side by side within the same warehouse or on racks already having a regular inventory taken. They are in similar packaging, look alike and are moved about by the same material handling methods and end up in processing machinery just the same, right? 

Not exactly.

Packaging aside, this is where the similarities end. Think of purging compounds as an entirely separate material used to maintain and maximize profits in the production arena. More so view them like an expense or maintenance type item, critical to the smooth running operations of the plant. For the processors responsible for keeping the machinery running day to day, just ask them. For them, they are a tool in their arsenal for maintaining efficiency. Simply put, purging compounds are an engineered cleaning product intended to speed up changeovers, reduce scrap and improve product quality. They serve a totally different purpose  from production resins. Those are obviously used to make the finished goods-- fulfilling orders and generating plant sales.

Therefore, purging compounds should not be subject to the same scrutiny of inventory turns and level controls, or viewed as a discretionary and slash-able expense to save a given month’s financial numbers. For processors recognizing this and taking advantage by separating their purging compound inventory from the production resins, some appreciable and real cost savings will go a long way! These are in addition to the larger savings consistently using a purging compound ultimately provides.  

First, consider price breaks and available discounts for larger quantity orders. This is a result of the principle of economies of scale. A production advantage to the producer, which in turn results in a lower cost product sold proportionately to the consumer. Without further explanation, I encourage a review of a quote for your grade of purging compound. You have an opportunity to see for yourself the significant available savings in black and white.

Second, there is going to be a freight savings with a larger order quantity. Parcel carriers are an economical shipment method if you will not need material and ordering all that often. If you order on a regular basis in smaller quantities, keeping track, the UPS or FedEx charges will add up quickly. For larger quantities beyond a few boxes, a palletized shipment on an LTL carrier is often the most economical way to go.

A recent cost savings example I came across for a larger quantity order was up to a 50% freight savings on a per pound basis. When comparing a single polybag, multiple polybags, and up to this maximum savings available with a gaylord quantity.  This is a practical example of lowering overall cost to purge. Which in turn makes a real, tangible positive impact dollar for dollar to the bottom line.

A word of caution.  Beware of any “deals” out there claiming free freight or as freight included. Freight costs are being captured somewhere. Most likely, they are buried in the price per pound you pay. Until there is a way to teleport your material, honesty and transparency are the best policies. This allows a candid look at multiple shipping options. It's an opportunity for you to compare Best Way rates versus those of your own preferred carriers. Rest assured you are getting what you paid for at the true cost to transport material from dock to dock.  If you would like a freight quote from Asaclean, we are always happy to provide you with our best available options.

Then there are the indirect savings and cost avoidance, sometimes difficult to quantify but no less important. To point out a few, a larger quantity on hand means less keeping track and ordering frequently. This equals more time to focus on other initiatives that will positively affect the bottom line. With an ample supply on hand, there is less chances of a shortage. Which Murphy’s Law will dictate, that it can and will happen at the worst possible time.

Please take an opportunity to discuss with your Asaclean Technical Sales Representative all of the available cost savings options we can provide.  As added incentive, we also offer additional discounts for blanket orders. All are ways we can help you to manage your total cost per purge to maximize your total cost savings.

Learn about the importance of implementing proper purging procedures by downloading this free industry guide.

New Call-to-action

Topics: Injection Molding, Plastics Processing, Production Efficiency, Plastics Production, Extrusion Lines, Extrusion Purging, extrusion troubleshooting, plastics manufacturing, extrusion die, purging injection molding, single screw extrusion, extruder, high temperature resins, super engineering resins

Leave a Comment