Featured Column: Cost Cutting Can Kill

For the next three months, “The Wide Line” blog will feature a series of columns authored by Dan Strongin, a well-known name in the food industry.

Do you think it’s crazy to argue against cutting costs and advocate for not paying what appears to be the lowest price? I don’t blame you for thinking so; it’s natural because “cutting costs make more profit” is so logical, but, logical or not, except in the very short term, it is not true. What matters is lowering overall costs. The true cost is what the company has to spend for each dollar of sales, not what it spends on each individual part. If you care about profit as much as I think you do, you will invest in the time to digest this.

To help, I am including a link to the video page at the Deming Collaboration. At the bottom of the list on that page are links to three YouTube videos that go into depth using real world examples of how cost cutting can put you out of business. I do ask your forbearance as they are among the first I did, and while jam packed with goodies, are not Disney-level productions.

Click here to watch videos.

Watching costs alone is not enough in today’s rough and tumble business environment, and truthfully, it probably never was. If you have been buying on price alone, purchasing inventory you won’t use for months to get an even lower price, or buying from 15 different sources, a bit from here and a bit from there, don’t feel bad! You are not alone. Sadly!

I never saw a company that was forced to sell, that wasn’t drowning in excess packaging and supplies. Many companies fail to meet their long-term potential because they believe that old lie, “watch your costs, the rest will take care of itself.” Cost is just one part of the equation. We will cover the whole equation more in the next post.

How One Stop Suppliers like Nelson-Jameson Help

But how can Nelson-Jameson help? They are a one-stop shopping solution for the food and beverage industry. Rather than fifteen different invoices, you get one. It’s less paper to process, fewer catalogs, less time looking, less work for accounting, no worry about buying more than you need due to minimum volumes, lower overall costs, and fewer resources you need to use in your buying efforts. It means you can focus on doing what you do best: making products and selling them. Selling products is what makes the company money, not multiple invoices and clerk work.

So to really measure the value of a one-stop shopping supplier, you have to look at what you save overall, not on each particular item. An nowhere do you save more than by allowing NJ to use their expertise to keep up with all the suppliers and products available, allowing you to focus your expertise on what you do, so you can do it well.

The following chart illustrates the various functions Nelson-Jameson provides support for. Call them the “headache removers” in:

 

 

 

 

 

 

In closing, I need your help! To help me with these posts, if you could take two minutes and fill out a survey on how well Nelson-Jameson is living up to its mission, and what areas of their overall offerings you are currently buying from. Each question refers to one of the items in their mission, which you will find worth a read, if you never paid attention to it before. You don’t have to leave your name, company, just the facts; however, you will only be allowed to complete it once.


A Picture of Dan Strongin

About Dan Strongin

Dan Strongin is a well-known name in the food industry. Strongin began his career in the food industry on the front lines as a chef. For two decades he worked as a five-star chef, including seven years with the Ritz Carlton Corporation. His passion for food and excellence was then put to work as the corporate chef and director of delicatessen operations for Andronico’s Markets, San Francisco. From 1995 to 1996 he served as the president of the American Cheese Society. He then became a managing partner and owner of Edible Solutions, a consulting company, and currently is a columnist for the Cheese Reporter. As a mentor for companies through Deming Collaboration, Strongin focuses on working with companies on effective management, strategic planning and marketing, and production systems.
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