How P&&G buys packaging
Purchasing magazine's Web site has an interesting Q&A interview today with Richard A. Hughes, vice president of global purchases for Procter & Gamble Co. The story throws around some pretty big numbers: P&G buys $4.2 billion in packaging annually. Some $4 billion of that is purchased under contract. The company has about 200 people worldwide involved in packaging purchasing, and 63 percent of them are managers. With that many people on staff, I image they might know more about commodity resin pricing than many of the processors that supply P&G's packaging. Cost savings are a big part of their job, but Hughes added that price isn't the only factor that P&G considers when it buys packaging: "We think that sometimes it's worth paying a little more to get the right 'pop' in the packaging on the shelf for the consumer. Packaging is a marketing tool, so we are cautious about driving everything to its lowest cost level. Packaging is important to the consumer, and sometimes it makes more sense to use a higher quality material to make the customer connection," he said.
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