Today’s guest post is from Brian Seipel, a marking project expert at Source One focussed on helping corporations achieve both marketing and procurement objectives in their strategic sourcing projects.
The printed materials that accompany products are an important part of any business. Yet it is all too easy to stick with the same print shops year after year to fulfill this need, never pushing back against slipping quality or rising prices.
This is a mistake — Reexamining these relationships offers a great opportunity to identify best-in-class suppliers, learn about innovations that could better serve your needs, and ensure market competitive pricing.
Too often, however, organizations go to market with a sole focus on just that last point: price. This is a common strategy when searching for printers, and is just as much a mistake as not going to market in the first place (if not more so)… You don’t have to look far for horror stories about the bargain basement print supplier who held up a new product launch because they couldn’t keep up in terms of quality, capacity, or both.
So, how should Procurement proceed? What can we do to ensure our incumbent suppliers are pushing themselves to remain competitive and, if they aren’t, what is the best strategy for identifying a new supplier that can meet our needs?
Cost savings without changing suppliers
First and foremost, let’s discuss incumbent suppliers and what we can do to determine if any production improvements or cost savings can be found in these current relationships.
Review what your current supplier offers, and compare to what your needs are today — things might not align as well as they once did. A shop may have been brought onboard to fulfill a printing need that no longer exists in your organization; newer jobs could be getting shoehorned into presses that aren’t really suitable for your current-day needs. Ask your supplier what their forward-looking plans are for business — what is changing in the world of print, and how are they seeking to adapt? What new technologies may address quality or process problems that they have, and how can they use them to improve the relationship?
As long as you’re still happy with your incumbent, and aren’t at a point where you need to jump ship due to quality problems, a few methods can be used to achieve savings:
- Drive savings by streamlining business processes.
This tends to be a soft dollar savings, but can easily add up. Step back and consider how much time is spent on managing print on your end — from placing an order to handling the PO process to delivering files and finally reporting. An inefficient process can drain hours out of your week. Review each of these steps with your supplier — What steps can be automated? If a step cannot be automated, can it be streamlined by removing excess information collection? Can templating be put in place? Can the supplier provide data back in a way that is more conducive to your reporting needs?
- Consider the impact of larger print runs.
The cost savings impact of larger print runs is immediate. Larger run jobs are cheaper, because the setup costs are spread over a larger number of prints. However, it would be short-sighted to leave it at that. If you aren’t able to make use of a larger run quickly, storage costs come into play. Worse, a larger run of product manuals relegated to a warehouse may be made obsolete by a new job, or if the associated product is discontinued. Examining inventory levels and turnover is key to achieving savings here.
- Cut costs by reexamining your specifications.
A word of warning: Changing up specs won’t lead to an apples-to-apples cost savings over your current print spend, and making a move based solely on price can be a disaster in terms of quality. However, analyzing the materials used can easily cut costs dramatically. Paper weight, for example, can easily be over-specified compared to need.
Unfortunately, there could be a quality problem or a lack of effort on your supplier’s part to help you reduce costs. If this is the case, it would serve you well to look into the market for either negotiation leverage with your incumbent or to identify a suitable replacement.
Tomorrow, in Part II, we will address the issue of the best way to go to market.