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Purchasing alliance aims for big savings

December 8, 1998

2 Min Read
Purchasing alliance aims for big savings

There are literally thousands of small- to mid-sized custom molders paying high prices for raw materials. Now, a new plastic processors purchasing alliance, Outsourced Purchasing Management LLC (OPM), hopes to provide "hard, measurable cost savings" for its members.

Gayle Fisher, managing director of OPM, says it took nearly three years to bring OPM from concept to reality. Impetus for the formation of OPM was resin price increases by as much as 35 to 45 percent during 1995 and 1996.

Additionally, in times of short supplies, smaller processors sometimes find they cannot get the materials they need. They usually must negotiate from a position of weakness, Fisher adds. "Overall, we are largely helpless in the face of large, dominating suppliers," she says. "For this to change, the processing segment of the industry must work together."

Fisher's husband Dan is COO of Plastic Industries, a custom injection molder in Athens, TN, and also serves on the board of directors for OPM. The cooperative serves a variety of processors, and custom injection molders are a large part of their member base. Currently, OPM has 29 member companies located nationwide with collective sales of $2.3 billion.

The cooperative recently finalized three contracts with major national suppliers--Staples office supplies, Grainger, and National Linen's uniform division--and is currently negotiating with several others. Because of the national scope of OPM, Fisher says it's important the suppliers they contract with also be national. She adds that OPM is honored to be granted national account status by Grainger, which has only 250 national accounts.

OPM is running a beta test with the first 29 member companies through the end of the year. On October 1, OPM began accepting new members nationally, to join the program effective the first of the year. Fees are $1500 per year or $150 per month, and members may quit at any time. The fee structure will stay in place for five years for all companies that join prior to June 1999.

In addition to Dan Fisher, OPM's board of directors includes Fred Tompkins, CEO of Vaupell Industrial Plastics in Seattle; Dale Reichhart, vice president and general manager of Cherry Electric Corp. in Waukegan, IL; David Halter, director of worldwide sales of Ameripol Synpol Corp. in Akron, OH; Jay Cude, president of PolyTen Plastics Corp. in Nashville; and Danno Mahoney, previous owner of Crosby Manufacturing in Crosby, MN.

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