How Unifize helped reduce $60,000 of material cost on just one product
Jesse Kolstad shares a transformative experience at Biovation Labs, emphasizing the power of perspective. With Unifize, he could holistically evaluate their ingredient performance and volumes, enabling him to whittle down from 16 SKUs to just two. This consolidation not only simplified management but also resulted in substantial cost savings for the company.
Transcript

[00:00 - 00:17]
And really being able to high level just start with what do we do and let's get it all in front of us. From there it's saying, okay, now let's start seeing what our what our volumes are so that we can go to the bargaining table and also go to the bargaining table with how are these ingredients performing?



[00:17 - 00:39]
Which one is our best in the case of 16 different SKUs or which one is the best, most consistent, most cost effective, least amount of lead time and consistently hits the specs it needs to get. And I was able to go from 16 down to two that we use and that was incredibly powerful. And then from those to drill down to, okay, who are we buying those two from?



[00:39 - 01:02]
And in this case there was two or three and I actually went out and found a better one. That was about 60% of the cost on this one ingredient that we I think we use, I don't know, maybe a couple of metric tons a year. And so if you look at that, that savings, even a few dollars, and in this case it was 60% of 400 or 4000 kilos a year you're saving.



[01:02 - 01:16]
I think I saved on that one roughly $50, $60,000. And Unifize gave me that high level visibility to drill down quickly and make decisions effectively



[01:16 - 01:36]
Just to test with spec versus what is my spec and which supplier can consistently hit my spec and that decreased my testing cost, decrease my lead times, increase my throughput across the board. And if you look at it on an ingredient by ingredient basis, I mean some of these products have I know, for example, our multivitamin has 42 different ingredients.



[01:36 - 02:03]
So being able to say, all right, of 42 different ingredients in one product, how many different suppliers are there? Well, if there's 2 to 3 per ingredient now you see how it exponentially it's and but looking at that product all at once gives me the ability to make the decision about that product in an instant for 42 ingredients, which is powerful and driving the cost down per ingredient, increasing the throughput per ingredient, negotiating going, collaborating with my suppliers.



[02:03 - 02:22]
And maybe there's a supplier that gives me three of those ingredients. Turns out they can give me six. And being able to do that all at once in the conversation, collaborate with the customer and the formulator and say, Hey, I think we have some alternatives here that'll net us savings forever. And I'm using the multivitamin because I did that and Unifize gave me that ability my second month.



[02:22 - 02:26]
So kind of made me a hero right away.



[02:26 - 02:28]
So as I've said before, quality isn't a revenue generator.



[02:28 - 02:54]
And and people like to use this illustration of quality isn't a problem till it's a major problem. So by doing our job where you don't think your seatbelt because you didn't crash that day, but you want the seatbelt when you crash, that's how I think about quality is it's not a revenue generator. And a mentor of mine once told me the cost savings and cost and cost avoidance is not revenue, and I understand that.



[02:54 - 03:16]
But because Unifize has this high visibility of everything, everywhere, all the time, all at once, it's impossible for people to not acknowledge what we've done, how we've increased throughput, and helped me build that model that I always want to build and always try to build of quality. Being there as a supportive function, not just pointing out the problems.



[03:16 - 03:41]
And when you see, you know, it's hard to get thanked for the mistakes you didn't make and Unifize because of this real time collaboration and effective communication, you you actually do see what the accidents you didn't get in. And by Unifize having that, it allows me to change our culture to a culture of quality and continuous improvement.

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Transcript

But what we've known from what I experience was, is we were able to get there with the system. We still there with the system. The system has what is needed to provide us what we're looking for, because every company, admittedly, is trying to get compliant. If we educate people, if we get people the education that they need and to get over the fear factor, I think 90% of those things can be resolved because most people will go to what they're most familiar with.What I worked with from a different company, but they're not willing to sit down and look at what the demographics are saying. People are into social media now. People are moving fast into fast paced world. But technologies are still antiquated. So there's a disconnect here, right? So while we're moving at a fast pace at home with dragging at work, so why can't we continue that speed while we at work?If your supplier has issues and you're not informed on time, you want to have an alternate supplier in place. If your suppliers are not qualified, you may not know that that needs to happen. And so when you have an integrated system that speaks to itself and is giving you all this data, you literally have the pulse of the organization in your hands as an executive at a money bound access.

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