European Stars and Stripes (Newspaper) - August 21, 1978, Darmstadt, Hesse Modern living monday August 21, 19/8 the stars and stripes Page 19 Little things that mean Gillette s chief buyer Peter Tremblay holds a graph illustrating prices that have shot right off the Chart and onto a taped on Extension. In 35 years on the Job Tremblay says he has never before encountered the kind of continuing inflation that prevails in the Market today. By Terry Kirkpatrick associated press if managing a household budget in these inflationary times seems a hair pulling task consider Peter Tremblay s Job in buys what the Gillette co. Needs to make razors Blades and cigarette lighters bulk Quanti ties at metals plastics and paper a Quarter mlle Long room full of machines and the thousands of nuts bolts gaskets and what Sils needed to keep them whirring and clacking. Tens of thousands of items in All supplied by More than 2,100 vendors at a Cost of $40 million to $60 million a year. Because so Many razors Blades and lighter Stream off the Assembly line a Cost increase on even the tiniest part can throw him Askew. So while a grocery shopper gets annoyed Over let Tuce prices Tremblay frets Over volatile Industrial commodities. There is no better picture of this than the Green Cha the keeps to track Copper prices. At one Point the jagged Orange line soars so High so fast that he had to tape a extra Sheet of paper on top to accommodate it. In All his 35 years As a purchasing agent he has never Een the kind of steady continuing inflation prevalent today. Back a few years ago we did t think of inflation he says. Now we think about it All the remarkably however and instructive for those coping with the squeeze on their personal incomes Tremblay is about to beat it. While consumer prices i general have been rising at a 10 percent annual rate this a Tremblay has been paying 5.2 percent less than Las year on average for All the items he buys. The secret is aggressive purchasing and specific Cost doting knowing More about the things he buys than us Salesman challenging every Price increase and look up at each hem for ways to save Money. My Bush Issei have people woo do what Tregob Lay does with varying degrees of sophistication. It they Are aggressive they become sort of a built Inte on inflation trimming the Price increases that begin mounting Long before a product reaches a retail each Gillette division the company also makes am poo Cologne pens and other products has a Cost icon committee and a yearly goal. Last year Gil hate was Able to reduce product and packaging costs. Mot and materials by More than $34 reduction programs themselves Don t result in a Werkng of prices a spokesman they can help us to maintain a existing Price or the amount of a Price increase. To this extent Vou a say that Cost reduction helps us keep our product a Down and helps tight Spring. Jim Webster the purchasing agent Foran a tapering firm in Tennessee put together a sym Posi a of businessmen professors and government officials to study inflation. Their meeting seemed to signal a grow ing awareness that corporations can throw a lot of weight through careful buying against inflation. Not every company has a systematic Cost reduction program says Webster a former president of the 22,000-Mcmber National association of purchasing management. If they did it would have a significant influence on the country s inflation in the Bookcase in his office at Gillette s sout Boston razor and Blade factory Tremblay keeps three Blue notebooks filled with pages of Cost reduction projects. Inside the cover of each is a Calendar with the Dat Sand times of each monthly meeting he will have this year with his subordinates. The no. 1 item on the Agenda each month is Cost reduction. That s the key to fighting inflation take a look at i every Day he says. Every Price increase is challenged. We ask them to justify everything Tremblay says. Most of them u he can t talk a Price Down he asks the supplier Howit can be trimmed. Perhaps a production and shipping schedule can be shifted. Maybe a specification for a cancan be changed. Tremblay buys brass 70 percent of which is Copper for razor and lighter parts. In december 1973. Copper Cost 69 cents a Pound. By april 1974. It had jumped to$1.10 a Pound. One Cost cutting project started that year involve changing the thickness of a piece of brass inserted in a razor handle from 0.050 Inch to 0.040 Inch. That saved the company $50,000 a year. Just shopping around for the lowest Price won always work. Many things Tremblay buys Are specially designed Lor Gillette. A simple one part plastic razor handle for in stance requires a full Sheet of blueprints. I know i can get everything i buy cheaper but it won t be the same Quality he the buyer be aware might be his motto. Very Little catches him by Surprise. On his desk is a newspaper Arti Cle telling of an Industry wide aluminium Price increase. He buys thousands of pounds of aluminium a year just fora tiny part that separates the Blades on a twin Lade article prompts Tremblay to discourse on the Alu Minum Industry s High Energy needs the drought out West and its effect on Hydro electric Power supplies and the dearth of recent capital investment in the Alumina Industry. He suspected the Price hike was coming. Tremblay s goal is to match the controllable expenses of his office like salaries of the 30 people there with equal savings. That s about three quarters of a million dollars a year and he s managed to do it every year recently except 1974. When he missed by a was during a period of shortages and double digit inflation that found some purchasing agents wanting an others rising in prestige in their companies. Tremblay was Able to get everything he needed but others could factories had reached capacity Black markets appeared people were hoarding. Remember the great toilet paper shortage scare throughout Gillette plants prices of things like cans plastics fluorocarbons and alcohol jumped 18 to 20 suddenly the manager who had never heard of the purchasing agent got interested says Robert Jenal. A vice president of materials management and manufacturing at Gillette years ago the purchasing agent was caricatured As a Cigar chomping fellow with a Green Eye Shade who sat Ina wire Cage and specialized in typing requisition orders in business techniques grew More sophisticated Fol lowing world War ii. So did purchasing. And in the late 60s, As inflation heated up. The purchasing agent in Many companies took the Lead in saving Money. Purchasing likes to feel that they re the Cost Jenal says. They re the one of these motivators is Jim Krueger director of purchasing services for Gillette. He uses a computer to keep track of the 100,000 item the company s North american divisions buy from sup pliers in nearly every state and 15 countries abroad. Ven Dors for raw materials alone number 5,000. Krueger coordinates purchasing among the divisions lie buys All the specially steel used for razor Blades for instance since several overseas factories in addition to South Boston use it. He buys it All abroad because no . Steel companies make it. That puts him at the mercy of the Dollar s steady decline in value in relation to other currencies. He can quickly shift his buying from one country to another. You re floating along with the Treasury re biting their nails buying futures in the currency Market calling in vendors asking them for s 50 purchasers work continually on Cost Cut Ting projects. After two years of study for example Theta permeate division of Gillette decided to reduce to one the two parts of the clip that holds a pen in the savings $100,000. Jenal does t believe buyers must live with continual inflation. In our polite Way we attempt to punish those who Lead an Industry wide Price incr a e. I think the pass through philosophy is inxcusable.1 while there is talk thet the inflation Rale May be t per cent or More this year. Jenal says we be been Able to manage Well below the consumer Price Index. I expect a4 percent Purchase rate this year but i m becoming increasingly cautious about making that the professional experience makes professional buyers More methodical la their personal buying but they Nave trouble too. Jim Krueger s wife. Ellen is careful shopper orientation she has to be and Clicks off the prices of groceries she buys on a Little plastic wife of a purchasing gent suffers in Many ways is careful to compare prices in a supermarket but the on the Job techniques really Don t carryover he concedes. In a household you re just buying Day to
