Seller beware. Where is your scrap and excess inventory going? Scrap is scrap, a commodity, but not your core business. It is also a revenue stream, so ensure you put a proper program in place that fits your business.
1. Price, since that is what most lead with. There are many variables in market conditions, so agree on a percentage cost and tie to an index that is fair for all. Do not be greedy and do not base your program solely on pricing, look at the big picture, but also understand you have a commodity. Expect fair pricing and reporting as well as have quarterly if not monthly reviews of pricing.
2. Partnership is two ways. Sure your scrap is a commodity and there are many people that want it, but what do they want it for? It is important to have a good partner that understands your business and has a full disclosure model to the entire supply stream. At the same time, you need to be committed to the program you implement, you may have to change a bit.
3. Customers. Know where your materials and customers materials are going. Ensure they will not be competing against you in another market. Conduct audits and understand where it is going as well as keep up on market conditions, at least quarterly or monthly even in this volatile economy. The most ideal situation is partnering with molders and retailers to create green sustainable products. This also ensures you know where your materials are going for the long term, set it and forget it. We have a new client that asked us to create a program without export because a customer viewed their packaging in a far away place being used on another product. They lost that cornerstone account because of it.
4. Customer service. The market is too competitive not to demand the best customer service. There are several key points that should be included in your program agreement with service being a priority, it is scrap, do not let it interfere with your core business.
5. Keep your finger on the pulse. Just that, regularly review and ensure your program is right for your current program. Get one of these sustainability graduates that are in the market with no jobs. They are educated and bring a fresh set of eyes.
6. Mitigate your risk. Always have back ups, especially in the economy we live in, alot of groups are here today and gone tomorrow and them back again under a new name. Do your homework.
7.Sustainability. Are we doing everything we can to avoid landfill and reduce our waste? If it can be used, ensure it is in the program. The goal is to catch up with Europe, there should be no waste period.