Marketings need to track print procurement costs

I was reading a recent article on whattheythink.com by Brian Wolfenden titled: The Future of Print in Marketing Communications. Brian raises a great point in the article; "Today's marketing professionals...They have to make sure that the campaign delivers tangible and quantifiable results quickly. And these results must show a return on investment for the budget they spend on the campaign." Brian goes on in the next paragraph; "As service providers, this offers an opportunity to partner with the marketer to help them produce effective marketing campaigns that have a fresh approach that stresses targeted, customer-centric communications, measurable results and concrete return on investment." These are both excellent points that point back to "Return on Investment."

The key to all of this is knowing what your spend is in the first place and knowing whether or not your getting the best return on that investment. Most companies are still "shooting from the hip" when it comes to tracking spend or evaluating supplier effectiveness. They audit their purchase orders for cost or survey their buyers or buyers of others companies to determine quality delivery from suppliers. All valid tools but time consuming. Tools like Cross-Wind are designed specifically to provide the information to help marketing departments in determining Return on Investment by tracking costs from purchase orders and invoices, and evaluating supplier quality, turnaround, and responsiveness. Getting the best value starts in the estimating phase not in the purchasing phase of a project. In addition, all of these numbers need to come together fast and effectively with your other media spend numbers. Measureable Results...not just in campaign effectiveness but in spend. Am I getting the best quality, delivery, service, and price. You need to have a set of tools in your arsenal that help you to make the best decision regarding return on investment and to do it effectively. It is not a single tool but a set of tools that help you to track the information specific to their areas and then output the data in an effective manner to provide you with a picture of the whole not just a segment. Are you tracking your spend?

The Importance of Supplier Equipment Lists

Patrick Henry blogged a great article recently on Print CEO about the importance of equipment lists to print buyers. I want to expound on this a bit in that not only is it important but as much information as you can provide about your services and capabilities the better. Our customers find that one of the most important pieces in our system is the ability for the supplier to add their equipment to a master list and the ability for the buyer to sort and look for suppliers with certain capabilities. We give the buyers and suppliers a set of profile tools that give them the flexibility to look for or provide information about Equipment, Products, Users, Quality Managers or Key contacts, and any additional profile information the supplier would like to provide to arm the buyer with as much information about their company as possible. Cross-Wind also allows the buying organization to categorize suppliers based on Minority or Women owned businesses and add regions to their supplier base to allow buyers to look for suppliers in certain regions of the country. Those regions can also be defined by the buying organization to tailor to their specific needs. We are also working with our customers to make the supplier profiles even more interactive to give the most information possible to the buyers including current supplier scoring as determined by the buying organization. Equipment lists are extremely important but so is as much information as a supplier can provide to the buyer to help them make a more informed buying decision. Specialized Procurement Platforms (SSP's) should not be about quoting and buying but about informing the buyer.

Fuel prices impacting print spend?

Appended:
I apparently wrote this before the DOE announced the National average of $3.39 per gallon yesterday afternoon so the news gets better and better! The message is still the same just even more urgent than last week.

According to the Department of Energy's Energy Information Administration, Fuel prices are up 32% over this time last year. From an April 2007 average price of $2.36 per gallon to $3.11 per gallon this week. Diesel Prices currently average $3.95 per gallon up 111 cents since this time last year. Cost of shipping is definitely on the rise, paper is heavy and costly to ship, both to the printer and to the consumer. At the same time personal income has only rose 0.9% in the same period. Companies are taking a hard look at how to cut costs and anything involving freight charges will be scrutinized heavily.

Now is the time to be evaluating print production costs and focus heavily on freight charges.
What is freight costing?
Can I get a better freight cost at the expense of production costs?
Am I better served producing a job closer to the delivery destination?

If you don't have strategic suppliers providing you with cost effective print; YOU ARE LOSING MONEY. No question about it at this point. I would also heavily consider which jobs can be split to make production closer to destination so if you are split shipping consider split production. Ask your suppliers where they are producing if they have multiple facilities and challenge them if they are producing in a plant further from the destination than another plant. Now is not the time to let your suppliers dictate. I believe that the breaking point is very close. The word "Recession" is getting used daily on the news. I heard from a colleague today that his company is now on a hiring freeze. Companies are looking for cost effective ways to measure and source print spend consider looking at sourcing solutions that can help you evaluate based on these and other criteria.

Evaluating Supplier Responsiveness

Supplier Responsiveness is one of the key issues that management teams are always concerned with. "How do I know many suppliers are responding in a timely manner to my requests?" Some might ask "Why should I even be concerned with this?" If you are in an outsourcing environment where you have customers relying on you to provide responses to a request in a timely manner then this becomes extremely important. Even if your customer is an internal customer likely their projects are time sensitive and if your suppliers are not submitting responses in a timely fashion then how responsive can you be to your customers? Well I often hear buyers say; "I have a pretty good idea of market price so I will just submit my own estimated cost with fudge factor built in." EEGGAADDSS!!! Your suppliers are the cost experts, they are the ones that should be supplying you with pricing not by educated guess.

The ability to measure supplier responsiveness is crucial in being able to evaluate your suppliers. Tools should be available to tell you how long it takes a supplier, from the time the request is submitted to the time the request is responded too. On a per request basis and overall for a time period. You should be reporting on the following areas:
Supplier, Quote ID, Time Sent, Time Opened, Time Submitted or Time Declined.
Then from a time range you should be able to evaluate;
Number of Quotes Submitted, Number Responded Too, Percentage of Responded, Number Declined, Percentage of Declined, Average Response Time, Average Decline Time.

This will give the buyer the ability to evaluate supplier responsiveness on an on-going basis to keep suppliers responding in a timely manner. Now if you do not actually DO anything with this information then what good is the information.

What to do with the information -
Once you have begun collecting this information you should make this information accessible to your suppliers instantaneously so a supplier can review at any time and be able to adjust their processes to keep up with your response standards. OH you don't have any response standards? Well take some time (3 to 6 months) to look at your suppliers response time overall and average out based on what ALL of your suppliers response times are and establish a set of criteria to meet your companies needs. There is not a given set of times or national standards for responsiveness, nor should there be. These standards should be set by each company to be able to meet their needs. Suppliers should be informed of your companies expectations and should decide whether they can meet those expectations on a regular basis. If they do not feel they can meet YOUR needs then you should consider whether they are the right supplier choice for your company. I can almost guarantee with a high degree of confidence, that if your expectations are reasonable, that most suppliers can meet those expectations that you establish and if they won't there is a supplier in the industry that will! Suppliers are willing to meet your needs as long as they have a way to be able to measure themselves and to be able to communicate with you when they cannot.
Once your criteria is established and you have communicated that criteria with your suppliers you MUST measure and evaluate them and be willing to call suppliers on the carpet when they do not meet your standards. In other words, some suppliers may pay you lip service when you communicate that criteria so you need to be prepared to implement any penalties that were agreed upon. The first time you issue penalties will likely be the last time you have to issue penalties. Suppliers learn quickly that if they agreed up front and you show that you are serious, they will comply with your standards. If they honestly have looked at their processes and cannot comply they will tell you and likely pull themselves out of the competition. Suppliers are in business to make money just like your company so if something is costing them they would rather walk away than to constantly flush money down a hole.

Staple Offer for Corporate Express REJECTED

According to the Associated Press Corporate Express management rejected the proposal within about 2 hours of the offer being made public. CE officials sited the proposal as significantly undervaluing Corporate Express and failing to reflect CE's value.

http://news.bostonherald.com/business/general/view.bg?articleid=1074569&srvc=home&position=recent

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!

Has it all been said?

One of the interesting things about going to conference's is the opportunity to talk to people and explore the surroundings of a conference find restaurants nearby etc. A part of that interest comes in hearing the topics of the conference being discussed over the dinner table with people you have met only a day or two before and sometimes people you work with for years. I find it interesting in hearing the conversations of what was missing or what the conference lacked because likely those things do not get on the evaluations after the conference. At this show I have heard a recurring theme over the last couple of days there is some great information but none of it really applies to my business or my situation. Or, "they should have..." you know...they should have talked about this... OR they should have talked about that...Or why didn't they have this company or that company at the show. Sometimes this is just "Babble" you know the kind where the person saying it doesn't really know what they are talking about they just want to hear their own voice...or their afraid of the silence that might suddenly appear around the table. Other times though there are some good ideas...the one I heard today seemed very pertinent to this particular show. Companies are using systems to purchase and track their print costs and sometimes they are not always the right system for the job. So why did we not hear about purchasing and procurement systems? Why did we not hear about processes to make your production more efficient? Or even what kind of reporting is important to our supervisors or is reporting important even? The short answer for most of this is that I think there is a wide variety of personalities in this type of work. You have creative types that by their own admission spreadsheets scare them, and then you have the analytical's, the ones that if you stuck a paint brush in their hand they would think you wanted them to paint the house! It is a tough mix in this industry and I am not saying it should be all one way or the other, I just think there isn't enough focus on the analytics, the business side of producing print the processes involved in actually take a set of specifications and turning them into a brochure. For the next few weeks I think I will try to answer some of these questions you may have walked away without answers to. I think the reporting questions are probably some of the most important questions to answer as from a system producer perspective this is always one of the first questions about our system that I get from the decision makers in a company. So I will try to start with the questions and hopefully provide some answers for your boss. So back to my original question; Has it all been said? I don't even think it's been asked yet!!!
By the Way! This is a great show and has a LOT of variety!
JG

A Quick Note From Print Oasis 2008

Good Morning from Amelia Island FL.
The weather has been incredible these past few days...Sunshine, Warmth, the Ocean Breeze! The conference is busy and active as usual with great speakers and LOT's of Exhibitor's.
There are more exhibitor's at this years show than at least the last 4 years reaching more and more Print Buyers. It is 8:30 in the morning and the lecture I am sitting in is full of attendee's. My rough count is 250. The show floor is busy and filled with Print Buyers looking for everything form the latest in promotional items to variable data printing formats and technologies. There are Printers, Office Supply companies to Software Solutions providers exhibiting at the show. Tonight is the Paper show where some of the leading paper companies will be displaying their goods and materials for all to consider.
I am currently sitting in on Steven Lance and Paul Kurnit as they discuss branding 2.0 The session is focused on advertising and the print industry. The show is full of great information for all print buyers across any industry. Steven and Paul will be doing a book signing later today on the exhibit floor. Well time to get back to the show! Wishing you were here!

Print Oasis 2008 this weekend!

This weekend is Print Oasis 2008 being held at Amelia Island Plantation resort in Amelia Island Florida. The show begins Saturday and runs through Tuesday, with opportunities for Print Buyers and Suppliers to mingle and gain knowledge of the latest happenings in print procurement. This is a great opportunity as well to talk with print buyers from all over the country and gain insight into the needs of print buyers. James Tower will again be exhibiting at the show. I will be there along with one of our sales reps to discuss Cross-Wind and our many other services we provide to print buyers. If you are at the show please stop by and say hi and tell me what you think. You never know you might just get mentioned in my blog! Hope to see you there!!
Information about the show can be found at: www.printoasis.com

CEO Confidence Declines Further

Oct. 5, 2007 -- The Conference Board Measure of CEO Confidence, which had declined to 45 in the second quarter of 2007, edged down to 44 in the third quarter. A reading of more than 50 points reflects more positive than negative responses. The survey includes about 100 business leaders in a wide range of industries.

"Despite the rather bleak assessment of current conditions, CEOs are not as pessimistic in their short-term outlook," says Lynn Franco, Director of The Conference Board Consumer Research Center. "But although the outlook is somewhat brighter than last quarter, the pace of growth is likely to remain moderate in the months ahead."

CEOs' assessment of current economic conditions was less favorable, with 14 percent claiming economic conditions had improved, down from 23 percent last quarter. In assessing their own industries, business leaders were also less optimistic. Approximately 17 percent claim conditions are better, down from approximately 23 percent in the first quarter.

CEOs, however, are moderately more optimistic about the short-term outlook than last quarter. Now, approximately 20 percent of business leaders expect economic conditions to improve in the next six months, up from 17 percent last quarter. Expectations for their own industries are also more upbeat, with 27 percent anticipating an improvement, up from 17 percent last quarter.

Capital Spending Plans Decline

Some 24 percent of business executives report increases in their companies' capital spending plans since January of this year, while 13 percent have scaled plans back, based on a supplementary question asked each year in the third quarter. This is a moderate change from the 2006 survey, when 28 percent of respondents had increased their capital spending plans and 9 percent had made cuts. Among the reasons given for increasing capital investment plans, the most common was an increase in sales volume. A decline in sales volume was the most cited reason for a decrease in spending plans.

Related Tables are attached. (You will need Adobe Acrobat to view)

Source: CEO Confidence 3rd Quarter 2007
The Conference Board

Are Reverse Auctions good for the Print Industry?

So the question has come up again; "does Cross-Wind do Reverse Auctions?" My biggest concern is why are buyers so infatuated with reverse auctions? I find it hard to believe that anyone in the print industry would even consider these. Have the lessons not been learned? I really would like further feedback on this from the print supplier/printers perspective.

I can tell you that I have personally sat in on reverse auctions with a printer, as an observer and I can tell you it was quite painful for the print supplier. The auction was a long duration auction lasting 3 days. The supplier reviewed the specifications and had questions as did other suppliers apparently by the feedback response that was given to the questions. Of course no one really wants to ask a question about the specs on an open forum as that may give away something none of the other bidders had considered and if the customer is not accepting questions any other way then the questions often go unanswered. The specifications in the suppliers eyes were not complete so therefore they felt they were unable to provide the best pricing and without being able to consult directly with the customer the price would not be complete. Also pricing did not start coming in to the auction site until the last 3 or 4 hours and then got really heated in the last few minutes which by looking at the price differences that printers were providing there was margin the whole time. In addition, the customer was fairly savy in that they were using a ringer. They had a supplier that truly had no intention of doing the job but was there strictly to drive the price as low as possible. Every time pricing was submitted the ringer would respond within a minute or two and counter the price by a percentage point. So if a print supplier was truly interested in the job they were forced to drop the price even further if they wanted it. The print supplier I was working with had decided early on that they were not going to get the work and that this was a waste of their time. The supplier estimated the job with their standard markup, a discounted price, and with their cost. When the auction started he offered up his discount price immediately which was a 0.5% profit margin. Within an hour he countered with his cost price which meant no profit on the job. One minute later the ringer countered that price which would have put the print supplier at a 1% loss. The right thing to do for the printer would have been to walk away at that point. However the printer knew e needed to fill the press and chose to go .5% lower (now at a 1.5% loss.) With a half hour left in the auction another supplier countered his offer. The printer while frustrated chose at this point to walk away from the job. Now once the price went below cost the printer spent most of his time that afternoon trying to run different scenarios as to how they could cut cost on the project to win the bid. This was a very painful experience for the supplier as they met and engaged the production department and pre-press in devising ways that cost could be trimmed, but without the answers or the ability to ask questions of the customer their was no way to respond without taking a complete loss on the project. The supplier walked away frustrated and realized later how much time was truly wasted in trying to respond blindly to the auction. This supplier politely turned down the next invitation to a reverse auction for this customer, and when the customer called to ask why, they politely told them that if this was the way they intended to do business from now on that they were not interested in being a supplier for them.

The customer lost out on having a consultative resource available to them. The bottom line for the supplier was that if doing business meant doing it at a loss they were not willing to risk losing their company to satisfy a customers need to save money. There is a balance and companies are in business to make money.

What are your thoughts? I am interested in hearing what Printers and Print Buyers think regarding using and completing Reverse Auctions. Post your comments! All will be posted. Thanks!

Why professional print buyers are a needed commodity

So I started to read a blog article about how printing is priced, and without even looking at the authors profile I instantly knew within the first paragraph that this was written by a designer. How did I know? The first paragraph immediately pointed out that it should never be about the cost to produce the job but about the quality of the final piece. And budget should be a secondary concern. Statements like these are exactly why a professional print buyer should be quoting and selecting the printers.

The need for balance
Designers are very talented and creative people and can put things in designs that can wow the senses. But they are also very close to the piece and they take great pride and ownership in their designs. So it is important for them to know what will make a piece POP to the end user. However, the cost of the final product is always of great concern and while designers will almost always tell you cost is secondary. The bottom line comes down to; can the piece be produced within the designer's specifications AND on budget? If the answer is No, then alternatives must be sought to still produce the piece and keep it in budget. A professional print buyer can provide an objective eye on the project and help keep the project grounded. I have worked with designers who upon hearing that the piece they want produced is out of budget instantly react with; "increase the budget then because it cannot be done any other way." A print buyer can look at the various aspects of a job and recognize alternatives to the job that will produce a quality piece at the right price. Print buyers provide a needed balance to the order of printed pieces, without them, designer's will pretty much have carte blanc. Printers love the idea of no controls to the price. They can produce the PERFECT print piece, but perfection comes with a cost, and most companies in today's market do not have unlimited print budgets.

Designers should continue to design the most creative pieces they can for their customer. But print buyers should recognize production issues and be able to adjust the specification's of a piece to produce a high quality piece at the best possible price.

DMIA Print Solutions Conference and Expo

The DMIA Print Solutions Expo is just around the corner. This year the Conference and Expo are being held in glamorous Las Vegas on October 17 - 19. At the Las Vegas Convention Center. This is a great opportunity for print distributors and buyers to hear the latest about technologies and processes in the print industry. I was at last years event in Chicago and was just overwhelmed with all of the exhibits and opportunities to hear some great insights. This year I am going to put a little different twist in my attendance, I am planning to blog right from the floor of the exhibition center. You got it live and on the scenes coverage of the conference sessions, and the exhibit hall. I plan to blog about the sights and sounds and the insights from the attendees.

I would like to know; What sessions you think I should attend, what exhibitors should I talk to and discuss in my blog, and what questions should I ask. Here's how you can help? If you click on the questions link you can fill out the form and I will ask the questions of the suppliers or attendees and post responses back here. You can find all of the information including exhibitors and sessions at: www.printsolutionsshow.com. If you are attending the show stop by at booth 1012 and say hi! I love to hear readers thoughts and would love to discuss them with you. I will post more information as we get closer to the show.

I encourage anyone that has the opportunity to take advantage of attending this show. There are always a lot of great suppliers and a great opportunity to learn more about the print and print services industries. It is a great opportunity to go to these shows for me and discuss procurement and sometimes show Cross-Wind. I hope to see you all there!

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

Does the price of Fuel impact Print Production costs?

The national average for the price of gasoline today is $2.81 per gallon. But the price of gasoline has nothing to do with the equation. It is the price of diesel fuel that has an impact on print production costs. The average price per gallon of diesel fuel is $2.92, an $0.11 per gallon difference. And the price is higher today than it was a year ago by $0.067. Now that doesn't seem like much but it is significant because prices are on the rise and winter is coming.

Economics 101
Sorry for the economics lesson but in order to understand the significance let's consider just a couple of factors. Fuel Prices are already high in the mid-west and IF we have a bad winter (meaning lot's of cold and snow) combined with a shortage of refineries and lot's of competition from overseas markets for fuel oil (Asia and Europe) the price of diesel fuel will continue to rise to all time highs. Now throw in just one hurricane in the Gulf of Mexico (that shuts down production and refineries) and we will be toast. Here endth the lesson.

OK so why is diesel higher than gasoline it didn't used to be?
That's very true diesel prices before 2004 were always lower than gas. For this I will give you the Department of Energy's explanation;
Until several years ago, the average price of diesel fuel was usually lower than the average price of gasoline. In some winters when the demand for distillate heating oil was high, the price of diesel fuel rose above the gasoline price. Since September 2004, the price of diesel fuel has been generally higher than the price of regular gasoline all year round for several reasons. Worldwide demand for diesel fuel and other distillate fuel oils has been increasing steadily, with strong demand in China, Europe, and the U.S., putting more pressure on the tight global refining capacity. In the U.S., the transition to low-sulfur diesel fuel has affected diesel fuel production and distribution costs. Also, the Federal excise tax on diesel fuel is 6 cents higher per gallon (24.4 cents per gallon) than the tax on gasoline.

Alright so let's put it all together...
The cost of fuel is high, it is going to remain high, and if foreign competition is will to pay more per barrel for oil, then we are going to lose out.

So what if I buy my print in Asia?
Cost of fuel is still high, but labor and living conditions are low so it balances out you can only work a human for low pay for so long...ever here of sweat shops? I don't think it is a win to print in Asia, and with all of the substandard products coming out of that part of the world are you really willing to sacrifice cost for potential hazardous chemicals?

What can I do?
The best thing to do in today's market is to look at suppliers that can produce your job close to the destination thereby reducing freight costs. If the job is shipping to two locations seriously look for split production not split shipping. The cost of production may be higher BUT you may save overall, by reduced freight. Print Buyers should seriously evaluate freight cost first when determining production then look at the total cost for the job not just production price not just freight but the total. In today's market it is extremely important to consider freight. I have stated in an earlier post that I had a customer that routinely evaluated freight and made production decisions based on that. Now if you are using a procurement system it should have the ability to break freight out as a separate line item in pricing and to go one step further it should also be able to sub-total your production costs and your freight costs. If your procurement system doesn't allow for freight as a line item then get a new system! I am betting the cost savings in freight alone will pay for a GOOD procurement system. If your suppliers are not breaking freight out then ask them too. Don't let them give you excuses either because if they think they might lose the job because of their freight price they will hesitate to provide it. Also, now is the time to be supplier shopping. Look at your shipping destinations closely and then start looking for suppliers that are in those areas that can provide the same services that Charlie down the street is providing, just at $250.00 per shipment more. A little trick that the big boys have learned is...When a large print supplier is involved and you know the companies I am talking about, they have figured out that, if you have a job that is shipping to Cleveland and your quoting with the plant in Dallas they will get the quote from the Dayton plant and then estimate freight from Dallas for the quote. Then when you order they will produce in Dayton and charge you for shipping from Dallas. So another question I would be asking your suppliers in the quote is; where is the producing facility located? If you ask that question and get a response of; "Why is that important? OR it doesn't matter! OR my favorite...we haven't determined that yet. (Yeah right) They knew EXACTLY where they were going to produce this the minute that quote came in the door!! With the press operating systems that these major printers have they know when the pressman is on coffee break and when he will return to the press halfway across the world.

Summary
There are lot's of options available to help you cut freight costs and you need to be taking advantage of each and every available option. I also encourage you to share those little tips and tricks with your peers. If you have an idea as to haw to save money or save on freight costs post a comment to my blog. I will share all ideas with the rest of the readers. If you want to know more about diesel fuel costs go to the DOE website located here.

Working on a project with a team in Cross-Wind®

Sometimes projects are big enough that it requires two or more of your teams buyers to work up the specifications. So how do you keep all of the information in one project for tracking and reporting purposes and share that project workload among the rest of the team? In Cross-Wind you can share the project with other team members. Those team members can receive the RFQ response emails as well as the Owner of the project. Ownership of the project can also be reassigned from the Owner list so that a project can be transfered from one Print Buyer to another within the group. To reassign project ownership:
1. From the Project List, locate the project for which you will edit ownership or share with other co-workers.

2. Click the Buyer name listed in the Current Owner column. A pop-up window appears with all
Buyers in the existing group.

3. Attach the Buyer to the project by clicking the check box next to the Buyers name. If you want to transfer ownership of the project, click the radio button next to the Buyer who will become the new project owner. If you reassign ownership of a project, the new owner must also be attached to the project.

4. Click Save. A message appears indicating that your selection was saved.

5. Click Close to return to the project list.

Attaching a Buyer to a project allows the attached Buyer to view and edit the project.
1. From the Project List, locate the project for which you will edit attachment.

2. Click the Buyer name listed in the Current Owner column. A pop-up window appears with all
Buyers in the existing group.

3. Click the check box next to the Buyer who will be attached to the project.

4. Click Save. The project will now appear in the project list of all Buyers who are attached to the
project.

Editing Supplier Information in Cross-Wind

I got a call tonight from a supplier and I thought this is probably a good time to address this issue. While it is not the most Frequently Asked Question it is up on the list of questions that I get from print suppliers so I will try to explain the edit features for suppliers here.

When a supplier logs into Cross-Wind, they can access their company information by clicking on the "Administration" section in the top navigation bar.

In the Administration section you can edit your company information in the default page. You can edit ALL of the information here and then click the Save button. If you would like to edit the USER information, click on "User Info" in the secondary navigation bar. You can change all of the information in the User Info section and click Save to update the information. This information is used in the RFQ page for contact information for the print buyer and in the supplier address book of the "Resources" section also for the print buyer.

It is a good idea for the print supplier to keep this information up to date for the print buyer so they know who and how to contact your company. This whole process should only take you about 5 minutes. If you have further questions please let me know.

Submitting Print Samples to your Printer

Everybody hates chicken scratch! So why torture your printers with it? Sometimes samples are a necessity when specifying print jobs but take the time to mark up your samples cleanly. The cleaner your samples are the easier it will be for your suppliers to review and provide accurate quotes. I suggest digitizing your samples if at all possible. The price of a cheap scanner is less than the price of a mistake in production because of miscommunication on the sample. If stock or matching ink color is the issue then obviously you need to send a sample but if your concern is the attributes then digitize that sucker and send it out via email, ftp, disk or whatever! Below are examples of a poor sample and a good sample. Put your chicken scratch on a separate sheet of paper and reference the attributes by number or letter. It makes life a lot easier for your printer and for you when referencing. Now obviously there are more sophisticated ways of doing this but if this is all you got then at least make it organized!

Ink Prices on the Rise

Today the Flint Group North America announced an increase in Ink prices. Flint cited the continuing and unprecedented rise in raw materials, transportation and energy costs as the reason for the increase.
The following inks are affected:
Publication Gravure - 10%
Publication Heatset - 8%
News Ink - 6%
Sheetfed - 5% to 7% depending on product technology and color.
Packaging – up to 12% depending on product technology and color.

Sheetfed buyers...expect these costs to be passed on to you. The increases are set to become effective October 1, 2007.

Flint Group is citing that "the increased global consumption of petroleum and petroleum derivatives, along with limited refinery capacity, continue to be the key drivers in the cost of raw materials" according to Bill Miller, President Flint Group North America.

Link to Press release: http://www.flintgrp.com/FlintGroupPressRelease.nsf/PressRelease/C9544A35B6F7ACA3852573440070F815?OpenDocument

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"