Living Life in the Cloud

I just read a post called; "Uninstall Now" from what I believe might be a very brave person for even attempting this experiment if you will and I hope he succeeds. I feel that software as we know it is on a cusp and that our computing devices are merely a URL storage device and a browser to allow us to access our tools from anywhere without being tied to software versions and installing upgrades. I have believed for the last 8 years that this was possible and I may even try to join David Rae in this adventure! Good Luck David!
As a side note: NowSource has always been an SaaS model. Design and architecture have fully been based on web accessibility so that users do not worry about updates and versions, they have access to the latest version everyday and with out worry or hassle.

e-Sourcing Tools

This is a great article and basically what I have been saying for years...e-Sourcing Tools — Means to an End by Andy Sealock. The first three paragraphs sum it all up in my mind. e-sourcing tools can have all the functionality in the world but if your processes do not back it up, they might as well be shelfware. I believe this is where NowSource has distinguished itself, as we do not just provide you with a "sourcing application" we review your processes with you and assist in providing the functionality to fit YOUR process. Not too make the process fit the tool. I believe this to be the fundamental difference in our tool vs. other tools on the market.

Day 2 On-Demand Exihibtion

Show floor is picking up right away this morning. Yesterday I met with a purchasing manager of a cooperative buying group that has just recently been organized. So do you think cooperative purchasing is a viable option in the print industry? Co-ops, have waxed and waned over the years but overall cooperative purchasing is a powerful tool to help organizations see real value for their purchasing dollar. Systems like Cross-Wind/NowSource are a means by which product specifications and management of the producers can be controlled by the co-op and still provide easy access for the customer to submit their orders. So again, do you think a co-op environment would work for purchasing print?

Day 1 Wrap-up from On-Demand

Day 1 was a pretty busy day! I did not get a chance to peruse the other exhibitors because we were steady all day in our booth. Show officials stated that the registrations and attendance was on par with last year so it is good to see that attendees and exhibitors were out in full force on day one! If your at the show stop by booth 2411 and say hi! Check back tomorrow as I will have more news regarding Cross-Wind.
John

On-Demand Day #1

Well I survived show set-up...(I actually did not do a whole lot to help) Having my first morning coffee and getting ready to head over to the show floor. Before I do I thought I would share the latest company news.

UPS Stores/MailBoxes Etc. Will utilize the NowPrint Platform for Online Digital Print stores.
Read more here: http://www.graphicartsonline.com/article/CA6646833.html?rssid=258

Manufacturing Survival

Again these are random thoughts on the current economic situation. I, by no means, have any answers or magic pill to help anyone overcome the current situations. I am just offering up babble at this point and hoping something sticks to the wall!!

Suppliers are taking a hard look at production costs and looking to trim cost to widen margins and more importantly win new business. It is a hard time and the survivors will be those that can find cost trimming solutions in their manufacturing. So what is the answer? How do we cut costs? I have cut as deep as I can go! Sound familiar? This is what I am hearing, and the survivors are those that can compare their costs against competitors pricing and find that one last spot to trim. Based on current projections it is likely that suppliers will be in the 1% or less profit range for the next couple of years. Seems reasonable at this point that if you can live within that range and be competitive with the competition, then you can point out the differentiator's that make you stand out. You know...the "I produce a quality product", and the "we provide good customer service" kind of things.

Software as a Service a more viable option in a down economy

As companies look to reduce costs and spending, technology becomes a stronger and more viable option for companies. Specifically, Software as a Service (SaaS) becomes extremely attractive because it helps to maintain or reduce IT costs in a company. SaaS has been known by many for years, of the benefits, but it seems that companies are just now realizing the true benefit from an internal perspective. SaaS means having the same functions and functionalities that are currently enjoyed without the hassle of maintaining IT infrastructure or staff to maintain hardware and facilities. Actually causing dramatic decreases in cost. For companies that are looking for ways to increase effieciency without increasing costs SaaS systems are highly attractive, especially in today's current economic conditions.

Supplier Performance Scores

Your buyers may be having issues with your suppliers and you may not even know it.  How do you know that you are getting what is expected from your suppliers?  How do your suppliers know they are doing what is expected?  I know, there is that annual survey that my suppliers send out asking how they are doing...but I didn't have time to fill that out for the last 3 years in a row.  So I or they don't really know when things are going wrong or right.  One of the easiest things to do is to survey your buyers on each purchase order that they cut to the suppliers and then share that informaiton across the organization.  It can be quick and easy or complex however, the important piece is to get informaiton to both your suppliers and your buyers on how they are doing.  A simple approach is based on Quality, Service, and Price (QSP) or Quality, Service, and Delivery (QSD).  Each of these can be very straightforward and can be scored in a percentage environment.  The example I like to use is the QSD, Mine looks something like this;

Quality = 30% Overall

- Paper Damage (0 - 10) 33% of the category

- Ink Smear (0 - 10) 33% of the category

- Packaging (0 - 10) 33% of the category

Delivery = 50% Overall (Select One)

- Early 80%

- On-Time 100%

- Late 1 Day 80%

- Late 2 Days 60%

- Late 3 Days or More 30%

Service = 20% Overall

- Customer Service (0 - 10) 30% of the category

- Quote on Time (0 - 10) 50% of the category

- Sales Support (0 - 10) 20% of the category

Based on this type of scoring I can provide at least some basic feedback to my suppliers on a per purchase order basis and make the score cumulative so I can see overall how my suppliers are performing.  In addition, setting a base criteria fro performance with your suppliers can help them understand if they are meeting your buyers expectations.  Rating them based on current score (30 or 60 days) and also overall will help both you and them in making decisions about whether the supplier is the right choice to produce a job that is critical to your organization.  

 

Change is a GOOD thing?

Change
The seasons change, styles change, presidents change, companies change, processes change. Everything changes, it is how we handle change that makes or breaks us. If you do not handle change well the the print industry is probably NOT the place for you. Changes have been occurring since the first printing press. Almost immediately people started to recognize the value and how they could improve upon it. Of course print buying is much the same in that things are constantly changing. In a pre-recessionary environment companies are looking hard at being efficient and saving money where they can sometimes spending money will make you more efficient and that is a hard concept to grasp. More and more companies are looking these days at how technology and systems in general can help improve efficiency and what it will save them.

We are making changes as well to make our technology more efficient to help print buyers be even more efficient. We have made changes to our project list page to allow users to drag and drop projects and to view pertinent information without having to open the project, giving the print buyer the ability to quickly scan a project and be more up to date. In the coming months we are adding reminder and messaging capabilities to allow the buyer to communicate more directly and quicker with their suppliers. We have even made changes to our website; www.cross-wind.com and we will continue to make changes because our customer base demands that we improve. If you are not riding the wave of change you will certainly find yourself under it. So let's go Surfin!!

Is Data Reporting important to Print Buyers?

Is reporting important to Print Buyers?
In my humble opinion it is the MOST important aspect of any Print Buyers job. Print Buyers are analyst's they are hired to be able to evaluate suppliers from a wide range of areas; quality, turn-around, equipment capability, etc. However at the end of a job the buyer needs to be able to track costs from every aspect possible. I will try to provide a base overview of some of the things my customers say are important to them from a reporting perspective.

One of the very first things most organizations want to know is Tracking Purchases. Organizations want to be able to tell how many of any given item was purchased in a week, month, or year. This includes many aspects such as How many brochures did we order? How many weretri-fold, c-fold, etc? What was the total cost of all Brochures? Of tri -fold, c-fold, etc? Systems must be flexible enough to capture basic information, Product, Attribute, Quantity, Cost. Or the templates must be granular enough to capture some of this information such as;Tri -Fold brochure, C-Fold brochure, or Miscellaneous brochure, for those items that may not be high quantity purchases or do not fit within regular standards. Either way is appropriate it is based on what level of granularity and or how easy you want your templates to be when specifying. This type of report becomes probably the most important when you are considering establishment of single source providers for individual product purchases or when trying to get a handle on what, when, and how much you are purchasing. A lot of potential customers tell me their single most point of frustration is their lack of knowledge about WHAT they are purchasing! Before you say it...yes, you can go back to your accounting system and trackPO's back to suppliers and likely they are even coded within your accounting system to allow you to see they where budgeted against your print budget. But even this is flawed as I just had a discussion with a customer that their departments would use their print budget code to make purchases for other things such as; shop rags, or for other NON-PRINT related items. So when the president of the company says; "How much did we spend on print?" it is not the easiest question to answer. One organization (actually several that I know of) have had to resort to hiring an outside consulting firm to help them get a grasp on their actual print spend. The sad part of this is that by implementing a system to track print procurement you could easily get an accurate count of your spend down to what was purchased. One customer was able to identify that they were spending $100 million per year on print but it took them 6 months and several thousands of dollars to find that out, when with a system they could have simply clicked a few buttons and had the most up to date information available at their fingertips.

So why should I be so concerned with what I am spending in print?
Because likely your companies CORE business is not print procurement. It is more likely things like manufacturing or service related industry. So when budget crunch comes, a couple of the most likely areas that management will look to cut will be the marketing department where likely all of the print purchases come from. So indirectly (or quite directly) print procurement is the likely area to be cut without any solid information as to whether that is the best choice or not. If a buyer can show and provide accurate and solid information to the company president as to what is being spent, it is easier for them to weigh the Return On Investment and likely they will look to cut costs in other areas of the company if you can show the value that print is providing to the organization. Presidents are going to cut areas that cannot show or even have a handle on the spend. Reporting provides the president with not only the information but assurance that your department is aware and can react quickly to decisions that may need to be made.

How equipped is your organization to be able to respond quickly and accurately to your managements inquiries?

Next episode - evaluating supplier responsiveness!

Busy, Busy, Busy, Are you busy too?

Good Morning!
Or is it afternoon I am not sure! It has been a very busy start to 2008 for me. I hope your 2008 is starting out with a bang as well. I was at the Corporate Express National Sales Meeting last week. What a great show! The Keynote speaker was Astronaut Jim Lovell who talked about his experiences on Apollo 13. A very inspiring talk. I got the opportunity to visit with almost all of the Strategic Suppliers for Corporate Express and talk with them about their experiences with Cross-Wind and how it is working for them. Almost all of them were very pleased with how it works and expressed that it helps improve their processes when quoting to their customer. In addition, the Strategic Sourcing supplier manager did a supplier survey in early December asking for the suppliers input and the preliminary analysis is showing that an overwhelming majority of Suppliers are please with the tools. I hope to have the raw data soon and to share that analysis here as well. While the weather wasn't the greatest (Cloudy and rainy Wednesday through Saturday) it sure beat the Minnesota weather I came home too (-10 degrees) on Saturday.
Next week I am off to New Jersey for another customer implementation of Cross-Wind and hopefully I will be able to announce very soon the customers name. I am out of the office all next week but will have some time to start keeping up on this blog! As always if you have questions please feel free to send me a note.
John

New Customer Implementation

I am doing a new customer implementation in December so I thought I would touch on some of the things that are involved with implementation of Cross-Wind. One of the very first questions I get asked is;
"How long is this going to take?" knowing that everyone's time is extremely valuable a standard implementation of Cross-Wind takes only 5 days (Technically 4 and a half but who's counting?)
"Is there work I need to do before the implementation?" Yes, typically we send a spreadsheet prior to implementation asking for user information to upload to the customers site prior to implementation. This information is typically Buyers, Suppliers, and Customers that will be accessing the system. If the customer already has this information contained in a database or spreadsheet we will clean the information for them and help to fill-in the blanks. One of the other things we ask customers to consider is what products do they associate to which suppliers. This helps us in the building of there custom product templates to know which templates are associated to which suppliers. We also ask our customers to supply us with copies of any forms that they are currently using to spec print so we can develop the product templates to meet their current processes.
"What is the agenda for implementation week?" I won't get into specific detail here but typical implementation consists of understanding the customers current buying process. If the customer has there process clearly defined then this goes very fast. I have spent time in advance of an implementation sitting with the customers buyers to watch how they quote print and to produce a map of the process. This helps in understanding which pieces of Cross-Wind will be needed in the development of the customers application. During implementation week we cover the basic set-up of the site and administration, how to add modules, users, templates, modify existing templates, supplier associations, buyer training, and supplier training.
"How long will it take to do the training?" Buyer training will usually take 4 to 8 hours depending on how quickly and how knowledgeable the buyers are of their processes. Supplier training typically lasts 45 minutes to an hour and a half. Supplier access to the system is very straightforward and easy to use so the suppliers can usually start processing quotes with only an hour of training. The buyer side of the system is more complex because of all of the capabilities the buyer has to specify and request print.
I typically try to schedule implementation to start on Monday morning and will try to get out of the customers office by Friday noon. The customer then has access to myself and our client services staff at no additional charge to ask any questions or walk through any issues they may have. The Call period usually only lasts about two weeks after implementation and the customer is usually very comfortable with using Cross-Wind after that. We also provide user guides and online help to our customers and their suppliers.
Thanks for taking the time to read this and if you have questions please contact me.

Contracts for Procurement Systems

I am working on revamped pricing for our estimating and procurement system and was having a discussion about terms. The question of contract terms and the length of the contract came up. There are some that will use a one year agreement as a selling point. However is that really good for the print buyer in the long run? Has our society become so bent on instant gratification that we can see the trees through the forest? Buyers need to be able to evaluate system needs up front before entering into a system without knowing what they are getting. So the up side to a short term agreement is "Well I only have to use this for a year then I can get out and start looking all over again" or as a buyer you will get a sour taste in your mouth and the common statement then is "well all of these systems are the same and this one didn't work for me so none of the others out there will...it's just easier to do this manually anyway." I think what you miss by taking that kind of approach is that you do not see the long term benefit an estimating and procurement system can provide.

Now as a buyer I believe that a long term of 3 years is the optimal length of an agreement because it gives me the ability to gather data and to analyze my spend for at least two years of the term and then gives me an ability to at least start practicing forecasting in the third year of the term. By mid-year of the third year I should have enough data gathered to prove or disprove my forecasts. You see I believe that a system is not just purchased for the ability to improve you effieciency but also to capture and analyze the data from your purchasing to be able to better predict spending cycles. So a system is not just to make your job easier from day to day but it is also to gather information to help you make more informed purchasing decisions. So is it really worth your while as a print buyer to be using a system for a year to "evaluate" whether it is right for you up front? OR, is it better to know exactly what you want from a system and sign a long term agreement to get that information that will help you do a better job down the road?

What are your thoughts? Post your comments.

Have a great weekend!
John

Print Procurement Questions

I am not going to say that "I am the leading authority on print procurement and print buying." But I will say that If I am asked a question I will find an answer. It may not always be the answer your looking for but I will get an answer. I have had extensive experience in purchasing and as I stated in a previous post the process of purchasing is really not much different between print or an other commodity. Now I said that word, "Commodity". Believe what you will, and I plan to address this further in a later post, print is a commodity. My background in working with both printers and print buyers gives me a unique perspective of hearing both sides objectively as compared to other pundits in the business who have an "either...or" background. I encourage, you to ask me questions. I am not going to give fluffy answers. I will tell you the way I see it or as I have heard it said. If you have a question related to print or print procurement send me an email at: jgangerjt@gmail.com

Reverse Auctions the Gold Rush is Over!

Is anybody still using these things? If they are and you are reading this then I guess I am about to stir a hornets nest!

I read probably the best article ever on reverse auctions a couple of months ago By Mohanbir Sawhney at CIO.com called: Reverse Auctions Cutting Costs. In the article he points out the historical facts that the biggest reason these became popular is because GE claimed huge savings by doing them. Mohanbir also points out that Reverse Auctions can be damaging to supplier relationships. I believe most are finding out that this statement is quite true. I have talked with several suppliers who have out and out refused to do reverse auctions and have told even valued, long time customers that they would rather lose the business than participate in a reverse auction. Suppliers are revolting because of the consumption of time involved in responding to a reverse auction. Often times these auctions are open for hours and usually tie up an estimator and a production manager during the entire auction attempting to shave pennies off an already profitless project. Reverse auctions may serve a purpose in industries where there are bloated profit margins. But in the print industry where the profit leaders are netting between 2 and 3 per cent and the rest are lucky to net .5% profits, reverse auctions can be detrimental to a printers business. I know someone will claim they are saving 20% or better on jobs they have quoted using a reverse auction but I would counter that they were probably using the wrong supplier in the first place. The bottom line is you could probably research suppliers, submit and receive well priced quotes in less time than it takes to conduct a reverse auction. I would also venture to guess that you will get comparable pricing with less work on every one's part.

Reverse auctions are a fad in the print industry and fads usually last about 18 months. Is anyone even doing reverse auctions anymore? If you are maybe you should seriously take a look at the time involved in conducting a reverse auction and what suppliers you are quoting with. As a wise man said at Print Oasis in 2005 "Reverse Auctions, I wouldn't do'em"

Print Procurement Outsourcing is it all it is cracked up to be?

There are companies that will tell you that print is not your core competency so why are you spending money to procure print when you will save money outsourcing that function. Well with that mentality why just stop at print why not outsource ALL of your procurement? What these companies are telling you is that they know how to spend your money better than you do so let them spend it for you. I want you to know that these companies are feeding you a great line. Never the less, a line. You may even hear that outsourcing is the trend. But for every company that you can name that is moving to outsourcing I can name a company that is pulling sourcing back in house. I talked to another company today in the wireless industry that has just terminated an outsource contract and is pulling print procurement back in-house. Why? because the promises of saving big dollars are unfulfilled promises. The key to sourcing either out or in, is about process, efficiencies, and compliance. The reason these companies think they can do better is because they have focused on the process to improve the efficiencies. It is about working smarter not harder! In some cases it is about paying substandard wages to inexperienced buyers and giving them a tool to do the job of two experienced buyers. Their training consists of take the request, enter the data, and the machine will spit out three prices, give the customer the lowest price, don't worry about who is printing the job or the quality just send the job to them when you get the approval. Heck if all your looking for is bottom line price on every job Hire Me! I will even give you a guarantee that I WILL save you money don't ask about the quality and don't ask about delivery. Let's talk about a Pyramid commonly used in business and let's put a twist to it.
Let's call it the outsource triangle:

Now the game is you pick one and I get to pick two...Oh you want to pick two OK pick two...I pick one! Either way this is a losing proposition, You pick Price and Delivery, that means I get to choose Quality. Oh you want Quality and Delivery, That's fine...I get Price and you will pay for it. You want ALL THREE? Sorry it doesn't work that way in outsourcing! It doesn't work that way with in-sourcing either the difference is YOU KNOW what you are getting, how much it will cost to get, when you want it, and the way you want it. The difference is in-sourcing YOU make the decision, and it has to be a conscious one. Business owners and CEO's are entrepreneur's, they are constantly thinking about and making decisions that will impact their bottom line. And, if they make poor decisions their business will fail. I challenge you as a print buyer or print director to think like an entrepreneur, think about that buy decision as if YOU owned the company. Is the decision I am making the best decision I can make for my company? Will I get a paycheck at the end of the week if I go with company A over company B because I like the sales rep? Yeah, his price is higher but at lunch yesterday he told me how his kid needs braces and poor Junior may not be popular without straight teeth. Stop worrying about their business, worry about yours! They won't care when your CEO comes in and tells all of you that they are moving to an outsource company and that you will have to apply for a job with them or go do a job in the mail room that you left 15 years ago when you were an intern and oh yeah that comes with a pay cut! Is that Sales Rep going to be knocking on your door offering to share his commission check with you? You'll be lucky if you can get him to answer your voice mails. If you treat your job like your an owner of the company and make decisions like a responsible owner would I think you would find that your job will be just fine and your boss will even be able to give you a raise because they will see the value you can bring to the company.

OK, now some outsourcing company is going to tell you; YOU CAN HAVE ALL THREE! Well what they are doing is not rocket science and they are thinking like a business owner that needs to make good business decisions. They will balance the triangle on one of it's points and they will make trade offs where they can. Some jobs will come in with poor quality, but not enough that will make you complain. Some jobs will come in higher priced than you expected but not enough to make you complain. Other jobs will come in late delivery, but not enough that you complain. Seeing the pattern? Most outsourcing companies can be successful because they have put process efficiencies in place such as sourcing and vendor management systems that reduce the time to production, they also have vendor agreements that they fall back on that they guarantee certain volumes of print to certain suppliers in exchange for "Rebates" or some like to call these kickback's (but that's such a dirty word).

The best recommendation I can give any company is take a long hard look at your vendor base.
Who are you doing business with?
Are there companies that can do more of the jobs thereby eliminating a vendor or two?
If I offer them a guarantee of work can I get better pricing?
Can I get "Rebates"?

The right suppliers are willing to give rebates or even price reductions because they now know where their next job is going to come from and they know that you are guaranteeing work to them so that now they are going to be able to make payroll. See, they are in the same boat as you and they know you need to spend money and they need to spend money as well, it's just nicer knowing up front how much you are going to make in the next year before you need to budget.

The biggest thing to remember as a company is that either way you are paying money, so why do you want to pay an outsource provider to do exactly what you can do and probably cheaper than the outsource provider? If the outsource provider wasn't making money do you really think they would offer a service like this? You can do this yourself it is not that hard if you have the print buyers in place now you really need to pay attention to the process and how to make the print buyer more efficient. Give them the tools to do what an outsource provider does and you will make them more efficient.

Specification Gathering in Print Procurement

When purchasing print the key to getting what is desired is the specifications that are provided to the supplier. I will try to walk through the specification process. When specifying a print job two key elements can make the Quoting process go smoothly, Good Specifications, and Samples. (we will discuss samples in another post) Specifying the job is usually done through some sort of interview process. This process can be a formal or informal interview.

Formal Interview

The formal interview is conducted by asking a series of questions designed to get the job specs. This is usually performed as a meeting or phone interview in which the print buyer gleans the specification for the job from the requester (customer). A series of questions is usually on some sort of formal document or an experienced buyer may know the questions that need to be asked. I caution even the most veteran of buyers that "off the top of the head" is not the wisest way to gather specifications from a customer. Most of the time this can make a customer quite nervous about the overall outcome of the job being produced. If this is an external customer they may lose confidence and will walk away unsure if all of the information was gathered no matter how confident you may appear. I recommend using or at least have a form in front of you during the interview process. Whether you actually use it or not, having it out on the table will give the customer more confidence in your ability. It often times can be used as a prompt for your questions or to at least ensure that you have gathered all of the pertinent information. The drawback to a formal interview is that they can be time consuming and if you are like most buyers your days are pretty full already and it may be a couple of days to schedule and complete the interview. Often times the customer either perceives they do not have time or they REALLY don't have time before they need the job completed. A personal side note; I found blocking an hour per day off on my calendar will allow me time to do those urgent interviews and still get my work done for the day. The formal interview can also be conducted as a survey form that is submitted to the customer. I highly recommend this form either as a complete or as a preliminary to a meeting. This will give the customer an opportunity to answer at least the questions that they know and will expedite your meeting. In the formal meeting you simply need to review the answered questions and help the requester understand the unanswered ones.

Informal Interview

The informal interview is usually conducted by way of email, phone, fax, or sending a sample with chicken scratch all over it and your expected to interpret (my favorite). Any way you get these requests they can be time consuming and often key items can be missed. The buyer and customer usually go back and forth either by email or phone calls over and over. Usually, additional questions are prompted by suppliers after the buyer has submitted the RFQ and then you're putting undue delay on the project because you either have to guess at what the answers are or go back to the customer again and ask. This also does not give your customer a warm fuzzy feeling that they are going to get what they want.

I am a firm believer in the formal interview process and have found that it can be used in almost any industry. When I worked in the medical field I would use this strategy when working with a team of medical specialists wanting the latest and greatest medical device. Whether I knew how the piece of equipment worked or not was beside the point I could usually go to a potential suppliers web site and at least get the pertinent questions from the listed product specification information or from their marketing information. An hour of reading often times saved me three or four hours of back and forth questioning.

Building the interview form

When building an interview form I suggest creating one for each of the specific types of items you may purchase and to use them as templates. The reason for separate templates is because the questions you ask for an envelope job are going to be different than questions for a continuous form. No reason to know number of pages on an envelope! I challenge those buyers not using a template when interviewing to try it and see if the reaction you get from your customer changes. I think you will be pleasantly surprised at the reaction of your customers.

Was this helpful? I am always open for recommendations as to how to make this better and I invite those of you using a formal interview process to post your thoughts.