Archive for the ‘procurement’ Category

Managed Print Services :: More than a purchasing decision

Monday, February 15th, 2010

By Clint Bolte on February 10th, 2010, writing for the PrintCEO

Recent posting by Purchasing.com to suggest that growth in Managed Print Services is being facilitated by the Corporate Purchasing Department is a shallow interpretation.

The Managed Print Services concept had its beginning with the management of corporate copier fleet(s). It began three decades ago with the bulk procurement – often leased – of remote analog monochrome copiers throughout multi-floor corporations or the corporate campus. In-plants were part of the successful implementation in many installations as they provided the daily operational management of delivering supplies to departments and monitoring the maintenance performed by the equipment manufacturer or distributor. The bulk buying contracts moved quickly to include the procurement of associated supplies and maintenance.

The copier technology improved and expanded in four directions; (1) inexpensive (under $100) desktop units that got hidden in the “other” column of departmental budgets and purchased by the user, (2) the integration fax, scan, copy, and print capabilities into a multi-functional device (MFD) or a multi-functional printer (MFP), (3) networking of these disparate units as the intranet took off, and (4) more cost effective multi-color digital printing.

Innovative corporate server mounted software escalated the “management of the copier fleet” to include (1) charge-back accountability, (2) feature usage for potential future upgrade justification, (3) and forewarning or “red-flagging” of needed maintenance back through the network to the copier manager. The current Managed Print Services definition has taken on a green tinge, as the next level of corporate administrative document strategy is to print less and therefore save trees.

This is accomplished by (1) training users to utilize the scanning and electronic faxing of documents on the MFDs to reduce the number of hardcopies made and later thrown away, (2) getting rid of the small desktop units altogether as their toner cartridges and therefore cost per copy are relatively expensive plus leaving a huge carbon footprint, (3) utilizing MPS software, which converts all digital copiers to a duplexing default mode rather than single sided copying (simplex) further saving paper.

Human Change Is Significant To Take Full Advantage of MPS

While each of these steps may seem to be incremental improvements, the overall MPS program is being perceived to be a significant cultural shift for many corporations. As a result of the human change magnitude and yet potential cost benefit, the MPS concept is gaining attention of specialized consultants to justify, prepare RFPs, and select the most qualified, full service digital print engine manufacturers or value-added resellers (VARs). Outsourcing of the management function is another issue on the table.

The inaugural gathering of 150 copier fleet aficionados committed to better control, cost reduction, and improved knowledge worker efficiency met this past spring in San Antonio, Texas. Digital print engine manufacturers, specialty software vendors, value-added resellers, consultants, and a few corporate end users heard Managed Print Services presentations on best practices and successful case studies. The MPS market research and strategic consultancy, the Photizo Group, organized this first topical conclave.

Corporate in-plants were not mentioned during this conference as playing any real or potential role in the successful implementation of the next level of distributed digital copier fleet management or Managed Print Services. The reason why is simple. The 16 digital print engine manufacturers, value-added resellers, and consultants all want to sell the implementation services along with the hardware and software.

The lessons learned of firms who are embracing MPS are simple. It becomes very obvious that the skills leading to successful implementation are often resident with in-plant organizations. This is an opportunity that in-plants must proactively and aggressively pursue well in advance of their corporation’s copier fleet renegotiation cycle.

The Photizo Group pegged the 2007 MPS market in North America to be $5.2 billion or about 14% of the total NA imaging market. They expect a 20% year over year growth for the next five years with MPS climbing to 35% of the total imaging market in 2012. One to three percent of corporate revenues, depending upon SIC category, are being spent on hard copy printing.

Converting a stagnant market to one of growth suggests a shifting or broadening of objectives by the corporate end users and an enlightened new business model by the manufacturing channel. Here are the proposed change elements from the low hanging fruit all the way up to moving the mountain;

1. Corporations of virtually all sizes have no idea how much they are spending in this space. The low cost of some desktop devices are under the corporate asset radar. Hence, most firms have much more equipment than they realize. As larger pieces of leased copier equipment come up for renewal, the clear, knee-jerk objective is to get control of this growing amoeba.

2. Contacting any of the sixteen hardware manufacturers and many of the VARs selling and servicing the equipment, a firm’s purchasing and/or IT departments learn that free equipment utilization assessments are available. Surprisingly simple software is linked to the print network and USB data capture ports are added to the stand alone devices to determine how much simplex/duplex, mono/color printing and by whom and how much downtime is experienced.

3. Proven cost savings venues are plentiful:
a. Economy of scale buying of equipment and supplies,
b. Moving the assets off the balance sheet as part of a cost per copy (cpc) contract,
c. Reducing head count by outsourcing the service,
d. Utilizing pop-up software on all equipment to encourage users to save money, such as default duplexing and sending the job to the least expensive device for printing, is a user behavior change initiative,
e. Utilizing the scan and fax features of the multi functional printers (MFPs) reduces unnecessary printing by capturing and moving documents electronically, and
f. Total chargeback capability via user code or card, i.e., no free copies, also contributes to fewer copies being made.

4. Process improvement adds to knowledge worker productivity:
a. Office mapping to assure that the appropriate equipment is convenient to all employees adds to efficiency and savings,
b. Client productivity and satisfaction climb with automatic software feedback embedded in the hardware; (1) forewarning potential maintenance problems improves up time and (2) controlling supplies reduces idle inventory investment,
c. Software queuing work (with user permission) to low production demand periods (nights) increased hardware utilization and
d. More energy efficient hardware, fewer copies, and recycling add to the corporation’s overall environmental efficiencies.

Free Assessments Aren’t Free

Ken Roche, Vice President of Sales and Marketing for the Print Operations Group (POG), offered several best practices for MPS benchmarking and assessment. Realize that “free assessments by VARs and/or manufacturers are not free” because of their inherent conflict of interest. They want to replace the prospect’s existing equipment with their own and prospect’s supplies sources also with their own. A clear and concise request for proposal (RFP) and service level agreement (SLA) based upon the actual current spend, integration with the corporate wide strategic objectives, quantifiable and continuously monitored key performance indicators, and issues addressed with the supplier on at least a quarterly basis are essential to a successful relationship. POG is one of several independent MPS consultancies with no ties to manufacturers or suppliers.

Measuring and compiling the key performance indicators of the copier fleet is the job of the specialty software. While some hardware manufacturers offer their own solutions, the independent VARs hold a strong market share. They include PrintFleet, PrintAudit, MWAi, fmAudit, Netaphor Systems, DocuAudit, and Compass Sales Solutions. The costs of their software can vary from $150 down to $9 per workstation depending upon the total volume of stations. This annual fee is typically rolled into the cost per copy (CPC) agreement. Many of these software vendors also provide training and marketing services to VARs, who are constantly improving their MPS skills. Hence, the end user may find this to be negotiable. Why can’t in-plants serve this same valuable monitoring and training function as the VARs?

Some best practices for MPS programs include gap analysis of where the user is and where they want to be. It includes four critical steps: (1) measuring the current state, (2) gathering end user input (and buy-in starting at the C-level), (3) identifying industry benchmark metrics, and (4) setting measurable objectives. He added that the end user input “was not creating a wish list.” A reliable source of metrics can be independent consultancies such as POG, Print Access, Newfield IT, and Photizo. Because the bar is always rising with users reaching for the business process enhancement stage, Crowley recommended that the MPS contract length not exceed three years. Again how much of this task cannot better be performed in house by the in-plant?

VARS Consolidating to Serve More Geographically Disbursed Corporations

Steve Reynolds, a Senior Analyst for Lyra Research, which is a digital imaging authority, acknowledged that more big players are entering the MPS space along with more mergers among regional VARs to be better positioned to service geographically disbursed clients. Korean manufacturer, Samsung, who claims to be the second largest manufacturer of digital copiers, has announced their entry into the MPS arena to be sold exclusively via the VAR channel. That is, no direct sales force from the manufacturer trying to go around their VAR partners. Ken Stewart, Technologies Solutions Manager for Sharp, remarked, “98 dealers had consolidated down to 7” (in recent years).

A case study offered by Marvin Reem, CIO of Greenville, SC’s Bob Jones University is most revealing. Renewing printer contracts four years ago, the school embraced MPS in an effort to better manage the document life cycle. Their IT budget had been flat for nine years with only modest labor cost increases. Reem found a number of “hidden” inkjet printers on campus when he asked purchasing “to forward him all purchase orders for inkjet replacement cartridges.” Their 20 page RFP resulted in third party leasing of hardware and a much improved partner relationship with a new VAR vendor. The fleet included 250 (Novell) networked printers and 85 MFPs serving 1,700 employees including an in-house publishing enterprise and 5,000 students. The only problem realized from the original RFP was the lack of an envelope printer, which was easily corrected.

Higher Ed Opportunity

An interesting human nature shift occurred when BJU set the pricing policy on students printing from the network. Ninety percent of the students’ historical level of printing would not be charged and then their student access card would kick in and be billed. In other words the intention was that only those students that were abusing the practice would end up paying for excess usage. This policy resulted in a 50% drop in the actual volume of student printing! Reem acknowledged that his own son, who was a BJU student at the time, immediately began printing out his papers on his dad’s printer at home to avoid possibly being charged at school. Following the yearlong MPS implementation, the school began to realize a $200,000-300,000 annual savings.

A major human tendency objection to be overcome by all corporations trying to realize maximum savings from Managed Print Services precepts is getting knowledge workers to give up their desktop printers/faxes/scanners. Sprint has successfully eliminated desktop units by telling employees that they could buy their desktop units for home use by making a $25 contribution to the Sprint Foundation. They employee would then be responsible for the toner expense of their home units. Justin West of Nationwide said that his firm offered a series of prizes to employees who turned in their desktop inkjet units.

In discussing the economics of MPS, John Macinnes, CEO of Calgary, Alberta-based PrintAudit, remarked that RFPs are becoming more sophisticated and are including more environmental objectives. The ultimate goal of corporate buyers of paying a penny a copy for mono, which previously was only attainable on high speed production machines, is now a reality with MFPs. The actual print costs are quickly becoming a commodity.

Doug Johnson, Principal of Red Sage Consulting, which concentrates on coaching for dealers moving into and servicing the Managed Print Services arena, offered a listing of caveats for end users that could lead to less than optimized if not failed MPS initiatives. Top of the list is a lack of C-level sponsorship and active engagement. While primarily IT and secondarily the Purchasing Department are involved in MPS operations implementation neither group manages all budgets impacted by MPS. C-level is the focal point to pace the timeline, gather costs, and approve strategy. He felt a brand specific approach to new hardware was limiting and results in replacing existing equipment unnecessarily. The vendor should be brand agnostic, which many VARs are. (Again the in-plant, not mentioned by this consultant, would be a logical and key partner to the corporation’s IT and Purchasing departments in accomplishing these tasks.)

Quarterly MPS Audit Is Essential

Johnson’s experience also points to end users not optimizing their fleet as frequently as they should. During the quarterly MPS performance review, an agenda item should include the possible movement of equipment due to departmental/division reorganization or growth to better optimize their access for the effected employees. Finally a lack of thorough communications of the MPS program to all employees only encourages “rogue buying” of desktop devices. (In-plants corporate newsletters would be the key venue to facilitate this communications!)

Though started only a decade or so ago with the advent of specialized software and multi-functional devices, Managed Print Services is quickly becoming the genre for the transition from a hardware concentric management issue to that of a knowledge worker productivity opportunity. Whether it is entirely outsourced or a blend of services from specialty vendors providing maintenance or supplies, MPS will surely be embraced by corporations of all sizes sooner rather than later. Many corporate in-plants can expand their mission and benefit the overall corporation as a result of closer relationships with their corporate IT departments to assist in the training of users on the MFD/MFPs.

The Lacey Act & Print Procurement :: 90 minute Video

Thursday, February 11th, 2010

• Presented By: Target Marketing and Printing Impressions

• Sponsored By: NewPage Corporation
• Duration: 90 minutes

• Speakers: Andrea Johnson , Director of Forest Campaigns, Environmental Investigation Agency (EIA); Elinor Colbourn , Senior Trial Attorney, U.S. Department of Justice; Rick Merdan , Marketing Strategy Manager – Environmental, NewPage Corp.

• Moderator: Hallie Mummert , Editor in Chief, Target Marketing

• View this WebinarOpens in a new window

Is the paper you purchased for your next direct mail or catalog campaign imported? How about the fiber used to make the paper? Did you perform due diligence to determine if all parties in the supply chain legally sourced and imported the paper that you bought? If not, YOU could be in violation of the Lacey Act.

The Lacey Act, a 100-year-old statute originally passed to stop wildlife crimes, was amended in May 2008 by the U.S. Congress to also now ban the commerce of illegally sourced plants, timber and wood and paper products. Companies that import or domestically source such environmentally harmful products may face seizure of goods, fines and jail time.

To stay on the right side of the law, protect your company’s reputation and be a good corporate citizen of the world, you need to understand the requirements of this legislation and how they affect your role in paper sourcing NOW.

The Lacey Act & Print Procurement :: Part Dos

Wednesday, February 10th, 2010

As mentioned before – I’m a tree-hugger, but a realist. I think the Lacey act is a great extension of that realistic approach.

When the first wave of environmental awareness struck our industry in the late ’80′s I was a pressman. I recall vividly the first press okay for what was then a small boutique hair care company (it is now a major brand, owned by a F100 corporation) when a recycled logo was used. We were running on one of the first “premium” sheets available that had been touted as recycled, and it sucked. The sheet was off-color, the printing was “picking”, and there were “hickeys” everywhere. The solution? We pulled it off press, pulled some premium (non-recycled) paper out of our inventory and ran the job –  complete with all the “recycled” logos and mentions all over it. The client doing the press-okay told me at that point “Oh – the end user will never know – they just throw these in the trash anyway.” Since that point – I hated recycled paper, and regarded he majority of the  people using it as hypocrites – the more and more I read up on it – found out about the de-inking process, looked at the amount of additives (chemicals with 15 syllable names ) we needed to use in the pressroom to make the paper “work”,  I soon started preaching about the detrimental impact of the paper.

Boy, how times change – the recycled process has much improved, and now I love, and was an early adapter of,  the idea of sustainable paper and printing. The reason I love it is the accountability afforded to the printer and the end user by the multiple COC’s available.  Part of that love has provided me the opportunity to help my clients (as a partner),  printers (as a consultant), and local municipalities (as an environmental advocate) develop a “plan” to procure “Green” print as part of their triple bottom line.

When I work with an individual buyer or a corporation, I offer the following advice in regards to paper. With the Lacey act going into effect Aril 10, these recommendations are even more relevant:

  • When obtaining an estimate, always specify a specific sheet of paper, or a specific grade of paper with appropriate environmental annotations, for example: “100# McCoy Gloss Book, FSC” or “100# Gloss Book, #1, FSC Certified”
  • If your printer replies on their estimate with “100# House Gloss Book”, make sure you know what they are going to use as their house sheet as many printers do not have an actual “house” sheet, but often time use that to describe a “best buy” sheet, which is normally a standard grade/sheet that they were able to negotiate a better price on.
  • If you are specifying an FSC/SFI/PEFC sheet of paper, make sure your printer is certified to use the appropriate logo. Again, this may seem like a no-brainer, BUT, there may be some unethical printers out there. Also, as our industry continues to face unprecedented strain, a lot of printers who were able to obtain certification three years ago, may not have the fiscal resources required to keep their certification current.
  • If you are large consumer of paper (Large Corporations, procuring more than 2MM in print annually on a national scale is a base line I use for pre-qualifying this particular approach) I recommend partnering with a paper company (such as Xpedx) to develop a paper buying strategy. This strategy, when properly executed, provides your printers ample flexibility, and the reporting metrics you need to quantify your environmental impact.
  • Ask questions – ask for swatch books – ask for options. Let your printer do some leg work for you – its their job!

By following these suggestions – you can be relatively assured that you are going to be properly protected from any of the negative impacts of the Lacey Act.

The Lacey Act & Print Procurement :: Part Uno

Monday, February 8th, 2010

The Lacey Act was originally signed into law in 1900, it was then the first piece of conservationist legislation. It was intended to stem the trade and commerce of threatened and endangered wildlife. I am not sure, but I think Al Gore was a cosigner of the bill at that time.

The bill itself has been modified over the years, most recently in 2008 when, as part of the Farm Bill, it was amended to include the “prohibition of commerce, domestic and international, of products containing illegally sourced plants and plant products” (such as paper).

The new law became effective May 22, 2008, although one of its requirements, an import declaration form, is being phased in and will not be enforced for paper, and ultimately the people who buy paper,  until April 1, 2010.

How the Lacey Act Will Affect Paper/Printing:

The Lacey Act now makes it unlawful to “import, export, transport, sell, receive, acquire, or purchase in interstate or foreign commerce any plant taken or traded in violation of the laws of a U.S. State, or most foreign laws.”

For the paper and printing industry, the law affects all of us who use paper, but has specific requirements for those who import paper, purchase imported paper, sell imported paper, print on imported paper (printers!), or obtain final ownership of the imported paper.

The U.S. Department of Justice , which will continue prosecuting violators of the Lacey Act, expects companies to perform “due care” in determining the origin of the paper products they use. Elements of “due care” include, but are not limited to, chain of custody certifications, country of origin, types of species, and supplier reputation.

How Will You Know the Paper You Purchase Complies with the Lacey Act?

Starting in April, importers will be required to complete an import declaration form for paper (already required for raw wood) that species the genus, species, country of origin, and the amount of each plant component. Note that the requirement for paper products containing recycled content is that it must include the average percent of recycled content.

What Are The Consequences for Violations?

The DOJ expects companies to perform “due care” in determining the origin of the paper products they use. Due care is defined as “that degree of care which a reasonably prudent person would exercise under the same or similar circumstances.” There is no “innocent owner provision” in the ruling. That is, claiming they “didn’t know about it” won’t get companies off the hook.

Consequences depend on the magnitude of the violation and the level of “due care” taken. Companies in violation are subject to fines up to $500,000 and forfeiture of the imported products.

Win/Win for Chain-of-Custody Certified Paper?

Existing chain-of-custody certification programs (FSC, SFI, PEFC) already have systems in place to monitor socially and economically responsible forest harvesting and to track the source of paper back to its original forests. Therefore, the passage of this amendment may further enhance the value of and demand for chain-of-custody-certified wood.

Okay – so now you have me freaked out – what can I do?

The first thing any end-user  (client side, not printer side) can do is to make sure they are dealing with a reputable printer. I know that seems like an over simplification of the process, but in reality that is where it all starts.

Most printers rely on their paper merchants to provide to them all proper documentation, and as such – as long as you have your printer specify, in writing, at the time of estimate the exact sheet of paper they are using to produce your job, and when your PO is placed you either reference that estimate, or spell out the specifics contained therein (paper) you should have your bases adequately covered. (Of course – there are printers out there that may be less than ethical, and may opt to “sub” paper, or purchase paper from a resource that can not provide adequate chain of custody documentation, so buyer beware.)

Over my career I have been fortunate to work with several clients to develop their sustainable printing goals and objectives, and provide them with a basic “road-map” on how to “green” their print procurement process – in the next post, I will share some ideas on paper sourcing as it may relate to the Lacey Act.

(the old guy in the picture? John F Lacey, Civil War Hero, Congressman, Freemason, and early tree-hugger)

Cost Savings :: Distribution Based Opportunities

Friday, January 8th, 2010

distribution

Distribution Based Opportunities:

(part 5 in a series)

Perhaps on of the most overlooked of any “Brands” life-cycle is the distribution of the messaging material to consumers – be it in a traditional manner, or in a more technological advanced medium. My thought is that by forming a strategic relationship with a vendor with robust distribution channels already in place will not only reduce costs, but also have an additional benefit to the environment.

  • Leveraging technology to deliver personalized messaging

Partnering with a vendor that has a robust technological commitment will result in delivering personalized content across multiple distribution channels. Technologies such as Variable data printing and Cross-Media messaging (PURL’s) continue to lift response rates and provide a greater ROI across several metrics.

  • Optimizing regional/national/global distribution centers

With the continued globalization of the marketplace, distribution of marketing products continues to be a key area of “brand” spend. With the reduction of workforce, often time the logistics aspect is delegated to internal logistics specialists. By partnering with a best in class vendor, with a broad regional/national/global footprint you can optimize and ensure that marketing material can be produced near its final destination, creating unique opportunities for cost savings.

  • Utilizing a Hy-Pod or POD material management model

Throughout a brands lifecycle, product demand can be tracked, and managed. Product launches often time require shorter runs to establish a presence without committing to a large inventory. As the brand life-cycle continues to grow, the material demands will also increase, allowing for the ability to optimize spend by ordering more, and as the brand matures, the ability to revert back to a POD model. As the chart below illustrates, by partnering with a vendor that has the ability to meet these demands without outsourcing, at multiple distribution points regionally/nationally/globally ensuring quality creates unique opportunities for cost savings.

hypod2

  • Environmental impact

As companies and brands continue to promote a triple bottom line (People/Planet/Profit) they need to understand the impact that distribution plays. Partnering with a vendor that has a robust regional/national/global presence ensures that products are produced near their final destination, increasing not only speed to market, but reducing the environmental impact of shipping. In addition, by having multiple distribution/production hubs, substantial cost saving may be found on shipping charges.

Questions? Drop me a note!

Cost Savings :: Vendor Based Opportunities

Wednesday, January 6th, 2010

vendor

(part 4 in a series)

Vendor-based cost reduction opportunities

Both large and small consumer-facing companies never “go it alone” where the creation/production of the “brand” and its marketing materials is concerned, but the drive for cost-reduction in the current economic climate encourages rethinking of traditional choices for vendor relationships. My thought is that a more strategic use of vendors not only reduces costs, but it can significantly improve the quality and consistency of marketing materials and ensures that they are deployed with agility and timeliness on a regional, national or global level worldwide (more in this in the next post). And this idea is based on proof that in the production of marketing materials, the consolidation/optimization of vendors works where it matters most: driving cost savings.

  • Optimizing broad segments of the process

Not simply “outsourcing” but the purposeful aggregation of tasks within a vendor that can streamline the process without sacrificing quality; in fact, quality is improved along with cost reduction when the vendor is both broad based in capabilities and expert in those tasks (see earlier post about printers re-inventing themselves).

  • Processes executed regionally/nationally/globally

The production of marketing collateral involves multiple small steps that must be executed in order; optimized use of vendors allows these processes to go on almost non-stop thanks to time-zone advantages. And the more geographically diverse a single vendor is, the more these processes are kept “in-house” within that vendor. This also minimizes the number of “handoffs” of materials among different entities, eliminating chances for slowdowns, redundancies and errors.

  • Leveraging regional/national/global advantages

Not doubting that it’s preferable to source goods and services more cheaply. It requires the understanding and balancing of several factors including, currency fluctuations, labor rates, material costs, and freight/shipping costs. And it requires a vendor with a large regional/national/global footprint.

Next up: Distribution based solutions

Questions? Drop me a note!

Cost Savings :: Client Based Opportunities

Monday, January 4th, 2010

client

Client (Process Based) Opportunities:

(part 3 in a series)

As brand “assets” travel through the process from strategy to design to production, many people – potentially across many locations, creative resources and departments– will work on them. And as brands push to expand globally, more facilities must coordinate efforts and resources.

Over time, bottlenecks develop and create lengthy roll-out schedules that make it difficult to isolate where there is waste and misappropriation of resources. The demand to get new products to market drives further inefficient use of resources on tasks that are redundant but are easily forgiven in the name of speed to market. When brands, such as consumer products, execute SKUs across a wide geography, the potential for pitfalls increases – but so do opportunities for workflow improvements that save money and make money simultaneously. Client-based cost savings opportunities include:

  • Streamlining communication and work-flow

Managing the communication flow in-house – among brand managers, procurement, legal and other departments – and with vendors, across strategy, design and final execution (such as pre-media and printing) – requires stringent work-flow processes to save time, avoid expenses and eliminate costly errors.

  • Maximizing internal and external resources

As corporations are struggling with headcounts, it is all to easy to expend unnecessary expenses on internal resources in the form of overtime,  or misusing external resources by not realizing their core-competencies.

  • Easier, secure access to brand assets

In the course of a “brand’s” lifecycle, its assets (graphics, creative, copy, templates etc.) – will be used, re-used and re-purposed by countless people either in-house, at strategic partners, or distributors. Considerable time and money can be saved when assets are logically stored, easily accessible and don’t need to be re-created again and again. This eliminates costly errors and potential legal pit-falls, as well.

  • Reducing design/revision cycles and costs

Properly engineered processes ensure that designers correctly execute on strategy, saving time and cost, especially since “upstream” errors are especially costly when discovered downstream. Similarly, when strategy and creative resources work with an awareness of “downstream” production requirements, resources are saved and potential errors are avoided. This is especially true where regionalized/global materials have distinct creative and production demands.

  • Reducing production cycles and costs

Budgets are blown each year due to printed materials that are substandard or contain “branding” violations and must be redone. Even perfect materials are costly when bad processes force overtime printing charges. Obsolescence of marketing collateral also accounts for approximately 16% of every dollar spent on “print” Processes that deliver artwork on time and ensure that inks, substrates and printer capabilities have been taken into account, which save time and money.

Next up: Vendor (Production) Based cost savings opportunities.

Questions? Drop me a note!

Total Cost of Print :: A Closer Look

Friday, December 18th, 2009

Picture 2

(part 2 in a series)

As mentioned in my earlier post – historically, people who buy printing often look to obtain cost savings by focusing on three distinct areas: process, production and distribution.  We understand now that these three areas need to be looked at as a “whole” to achieve true, lasting cost savings.

In order to do that – we need to look at what the true costs are. In a study by industry analyst Cap Ventures, they found that for every $1.00 spent on “print”, only $.24 of that is attributable to the final product:


approx. cost % as a whole
Vendor Management (Assumes at least three bids are being reviewed) $0.010 1.72%
Internal Procurement Process (Purchase Req. Through Final PO) $0.010 1.72%
16% Obsolescence $0.020 3.45%
7-20% Spoilage $0.020 3.45%
Rogue Buying $0.030 5.17%
Storage $0.030 5.17%
Managing a print order (routing/proofing etc.) $0.050 8.62%
Fulfillment/Distribution $0.120 20.69%
Per sheet $0.140 24.14%
Design /Copy / Photography (internal department) $0.150 25.86%
total cost per sheet: $0.580 100.00%

So, now that you have that knowledge, here are some questions to think about:

  • Does your vendor have the ability to help you with design? Copy? Photography? Can they act as an adjunct to internal resources or external agencies?
  • Does your vendor have any tested systems in place to help manage “rouge” or “maverick” buying?
  • Would the introduction of a POD or Hy-POD model help with your obsolescence?
  • Does your vendor offer any distribution solutions? If so, are those solutions local, regional, national or global? And, are their solutions capable of merging with your current distribution footprint? (In other words, if you ship 90% of your product to the west coast, you are on the east coast does it make sense for an east coast vendor to store and ship your products?)

I think that in this day and age, in order to achieve any sort of lasting cost savings, you have to be willing to step outside of your comfort level. ask you current vendors some challenging questions and be willing to partner with them if they are in fact a best-in-class provider.

Questions? Drop me a note.

UPDATE: Someone asked if they can get a copy of the pie-chart in an .xls format – yes, drop me an email and I will send it off to you!

Understanding the Total Cost of Print

Wednesday, December 16th, 2009

tcop

(part one is a series)

I had the chance to meet with a client last week for an informal review of their 2010 goals as they relate to marketing communication (MarCom as they know it). A major point of conversation was cost reduction. What can they do to reduce costs, increase speed to market and not compromise their “brand Integrity” in doing so?

In the past, cost savings initiatives have focused on reducing the cost of materials, and the cost of manpower. But many companies have exhausted these methods, already having put as much pressure on vendors as possible and have reduced the cost of materials to the point of potentially affecting the final quality, and ultimately risking the image of the brands they are trying to promote. And, they have downsized already overtaxed procurement and art departments to the bare minimum.

Looking at this challenge in today’s marketplace, we are forced to look for initiatives that may not be as intuitive and obvious, or may seem complicated or difficult to implement quickly or economically. Cost savings opportunities can be found at every stage of the brand communication life-cycle, from the earliest marketing strategy to final printing, fulfillment and distribution. This is largely because upstream decisions affect execution downstream. When brand managers, procurement professionals, designers and printing solution providers have collaborated in planning – when they share technologies designed to streamline and strengthen the process – there is a cumulative lasting effect of cost savings. This integration is integral to brand communication management. Let’s consider the three key opportunities for cost reduction along that life-cycle:

tt

Historically both the client and the vendor understood that these three areas were strongly interrelated, but looked at them as unique opportunities for cost savings. In today’s market, we need to look at them as a whole, and we need to understand that where the three intersect is where true cost savings can be found.

Questions? Drop me a note!

Why Companies Are Choosing Digital Printing

Tuesday, December 1st, 2009

boxes with letters CMYK

I read this article a while back, and actually printed it out for a few of my clients and prospects. If you don’t read Margie’s Print Tips on Bostonprintbuyers.com or follow her blog on Printing impressions, you are missing some great insight from professional print buyer!

Courtesy of Margie’s Print Tips:

Just because print volumes are in decline doesn’t mean that print is dead. Au contraire. Quantities might be shrinking – but the rising popularity of digital printing is noteworthy.

With digital, you can print fewer. With digital, you can print faster. With digital, you can print ‘personal’. With digital, you can print targeted. (OK, my English not so good here.)

In my quest to figure out where print buying is going, I asked hundreds of print buyers in many industries all across the country to tell me, in their opinions, why print volumes are in decline in their firms. What I heard was quite meaningful.

Here are the major reasons:

  1. More projects will be done electronically instead of in print.

  2. Companies will be leveraging the data they’re gathering online to prequalify potential customers. They’ll be mailing to smaller groups and, hopefully, seeing higher response.

  3. Companies will do more prospecting through the internet.

  4. Environmental concerns will drive more business to the internet.

  5. Increased material costs will force other channels to replace print.

  6. As e-commerce and e-fulfillment grow, there will be less print.

  7. Companies are converting many of their existing print materials to POD (Print on Demand).

  8. Emerging electronic technologies (email, web delivery, etc.) are contributing to lower quantities.

  9. Companies want to create multiple versions of print materials for a single market.

  10. Digital printing lets customers print smaller quantities cost effectively.

  11. Digital means you can keep materials up to date more easily.

  12. Driving more traffic to your web site might mean less demand for printed material.

  13. From a business perspective, companies believe that as digital printing prices decline, they can be more efficient and cost effective.

  14. Print is becoming more of a targeted support technology to the digital world.

I am proud to work for the company with the most advanced digital foot-print in the world, with over 250 digital presses, in four countries. Want to learn more? Drop me a note!