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Article # 12102

Safety in Numbers - The Economy of the Single-Source Solution

Traditionally, purchasing safety supplies is a bid-buy game. Here's how it's played: the greater the quantity of commodities ordered, the lower the cost. Doing business this way means dealing with hundreds of vendors. Price is paramount, but other aspects of supplying products that add cost, such as inventory management and transaction paperwork, are seldom discussed. Too often, the result is n avalanche of paperwork and costly inventory management procedures.

To cut down on time and paperwork involved in ordering and stocking Personal Protective Equipment (PPE) supplies and maintenance, repair, and operation (MRO) items, Magid is joining forces with customers through a variety of partnering programs, including Magid's Alternative Sourcing Agreement Partnership (ASAP) and Zero Investment Inventory Program (ZIIP).

A leading turbo-charger manufacturer - one of the more than 1,000 Magid ASAP and ZIIP program participants -realized a 31.5 percent reduction in MRO costs over their old method of procurement. "Until we entered into the ASAP and ZIIP agreement with Magid, we had multiple suppliers for safety products," says Michelle Norton, administrator for cost reduction for the turbo-charger manufacturer. "Since implementing the programs, we have greatly reduced our labor costs by cutting down on purchase orders and achieving an overall improvement in inventory management."

According to Norton, Magid's ZIIP program reduces the overall cost of sourcing and maintaining MRO inventory, while assuring quick access to PPE safety items.

"Magid's dedicated efforts made this conversion the smoothest one I have ever been involved with," says Norton. "First, Magid representatives identified the total annual usage of the safety supply items we purchase. Then they rolled up their sleeves and inventoried our tool crib to determine what we had."

Once the analysis was complete and a mutually acceptable inventory level was established, Magid stocked the safety supply items on-site at no charge using the existing warehouse space.

According to Brian Palmer, health and safety coordinator for the turbo-charger manufacturer, when inventory is replenished, they are billed for the items, and a new order/shipment restores the inventory to its original level.By using this formula, the ZIIP program assures just-in-time delivery, as well as cost savings from the elimination of investment in inventory, sourcing costs, and order processing. The ZIIP program also provides protection from last-minute overtime or weekend needs, emergency sourcing and premium freight.

"The overall benefit of ZIIP is Magid's ability to make sure we have a steady supply of what we need, and their ability to monitor the tool crib to determine what inventory level we should have," says Norton. "By going to Magid, we have the benefit of consigned inventory at the best price."

The turbo-charger manufacturer also has the benefit of working with a single safety supplier who is constantly striving to improve performance and reduce costs. "Magid has made significant recommendations for changing some of the safety supply products we use," says Palmer. "The new products provide the same benefits, while saving us money and enhancing our safety performance."

For example, before the ZIIP program was in place, the turbo-charger manufacturer used five different sizes of safety glasses. Recently, according to Palmer, Magid showed them a new safety glass design from Willson that covers the whole gamut of face sizes. "By moving to the new style, we have reduced our cost dramatically," he says. "The Willson safety glasses are less expensive than anything we were buying, plus we don't have the complication of five styles. The lenses are quick and inexpensive to replace. As an added bonus, the glasses are very fashionable - everyone likes them."

In another instance, Magid recommended that the turbo-charger manufacturer consider buying Leightsource earplug dispensers that dispense disposable plugs. Leightsource earplug dispensers are highly visible, permanent hearing protection centers that are easy for workers to use. By hanging the dispensers near heavily traveled areas, the employees could be assured of fresh, clean earplugs without having to make a special trip to the tool crib. "The cost of the earplugs is half the price of the ones we used previously," says Palmer. "The dispensers also make it easier for visitors to use earplugs as they go into the shop area."

With Magid's ASAP and ZIIP programs, companies like this turbo-charger manufacturer are realizing that saving on PPE is more than just a numbers game.