Canadian Packaging Machinery Market Research Report - PMMI

6. Attitudes Toward Suppliers:
Kraft Canada will buy packaging machinery anywhere the best combination of
equipment features and price can be obtained. With the possible exception of the
Eastern block, there are no countries that it avoids as prospective suppliers.
a. Perception of Machinery by Country:
Country Overall Quality Up-to-date
Technology
Service
Britain Good Good Good Good
Canada Good Good Good Good
France Good Good Good Average
Germany Good Good Good Average
Italy Good Good Good Average
Japan Excellent Excellent Excellent Excellent
Switzerland Good Good Good Average
United States Average Average Average Average
Note: Swiss and German suppliers tend to be relatively inflexible.
b. Perception of Pricing by Country:
The country of origin is not a factor in Kraft Canada’s view of packaging machinery
prices. The company puts its requirements out to competitive bid and buys from
wherever it obtains the best combination of price and required machinery attributes.
7. Purchasing Policies and Financial Arrangements
The decision whether to buy direct or through dealers depends on circumstances. In
the past, it has tended to buy direct but is now flexible in this.
Kraft buys both individual pieces of equipment and turnkey situations. Individual
machines are turnkey. The installation is typically carried out by Kraft personnel,
although there have been instances where the company has hired third party
integrators.
The company prepares annual capital purchase plans. Technical specifications are
developed by Engineering who typically makes the purchase decision with significant
input regarding legal and purchase process elements from Procurement. Kraft
utilizes a competitive bidding process.
Payments terms are usually: 30% down payment; 60% on delivery; 10%
performance guarantee.
8. Purchasing Issues
One of the most glaring issues that Kraft experiences is ensuring manufacturers
respect promised delivery dates. Late delivery has implications in regard to
managing cash flow and in shutting down equipment.
SMG/Columbia Consulting Group Page 83