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.

Print Supplier Loyalty - Is it that important?

When I was a buyer the most common theme I heard from my suppliers and my potential suppliers was always about customer loyalty. Suppliers actually measure customer loyalty as an indicator in their business models. But how important is customer loyalty really? From a buyers perspective, suppliers are coming in the office constantly trying to find a way to get their foot in the door. They often times will try just about anything to get just one sale from a new customer.
As sales people, they are being measured on not just the usual volume of sales but also on the number of new customers that are brought in the door. It's called building a book of business and sales people will carry that book of business with them when they go to work for the competition. That is often times why another company hires or recruits sales people from other companies because they are often counting on that book of business. Sales people are always looking for the next opportunity too, so they can increase their salary or commission rate. So when that sales person walks in the door they are trying to build a relationship with you. They would like to be that friend for as long as you are with that company because they are counting on one of two things happening; A) They leave XYZ printers and go to ABC printer, they are counting on the fact that the relationship they have built with you over the years is going to get them a notch on their sales belt under the NEW sales column. B) When you leave ABC marketing company and go to work at XYZ marketing they are hoping that...You guessed it...the relationship they have built with you over the years is going to get them a notch on their sales belt under the NEW sales column.

So I ask...who is the loyalty really with? Often times it is not with the company unless it is niche printing and there are not many companies who can do that work. By the way we are talking about small to medium companies that are the sales reps perfect target. Why? Because they are the ones that are doing business based on relationships. They are single or two and three buyer organizations that do 1 to 2 million in print annually and print is not a core function but an ancillary function.

Keep in mind that I am not talking about the large buying companies because most of the time those relationships are based on analytics there is a director of print that is usually being held to statistical analysis of their print spend and they are always negotiating based on their volumes of print.

So is it about loyalty? To a certain degree it is about loyalty but not to who you think it might be. It is certainly not as much about the printing company as it is about the sales person. So next time that sales person walks in your door and starts talking about loyalty consider who your loyalty is with.

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.

Print Oasis 2008 Exhibitor Opportunities Now Available

Print Oasis 2008 Print Buyers Conference & Exhibit will be held February 9-12, 2008 at the Amelia Island Plantation in Amelia Island, Florida near Jacksonville.

ARLINGTON, VA, September 5, 2007 — Print Buyers Online.com, a free, educational e-community for print buyers, print communications professionals and their suppliers in partnership with Print Communications Professionals International (PCPI), the premier association dedicated to print buyers, will host their annual Print Oasis Print Buyers Conference & Exhibit (www.printoasis.com) on February 9-12, 2008 at the Amelia Island Plantation in Amelia Island, Florida near Jacksonville.

The Print Oasis 2008 Print Buyers Conference & Exhibit is the premier independent conference focused on the needs and challenges of print buyers, specifiers and production professionals. Previous exhibitors have included printers, proofing companies, major technology firms and paper manufacturers.

Extended Exhibit Times
Print Oasis 2008 exhibit times will be extended from Sunday afternoon and evening to all day Monday, concluding with the Paper Show on Monday night. Back by popular demand, compelling mini-educational sessions will be conducted in the Exhibit Hall providing attendees with a fun way to quickly learn the tricks of the trade while promoting traffic on the exhibitor floor.

“We are thrilled to bring our annual conference to the exotic ocean-front destination of Amelia Island Plantation Resort. We are confident that conference attendees and exhibitors will enjoy this exciting locale,” said Suzanne Morgan. The Amelia Island Plantation is Florida's premier AAA-Four Diamond destination island resort. The 1,350 acre property overlooks the blue water of the Atlantic on the east and the green marshland and Intracoastal Waterway on the west. This resort is family friendly and offers many exciting amenities including four championship golf courses, tennis courts, 25 swimming pools, bicycling, fishing, beach rentals, chartered fishing boats, award-winning Youth Programs, nature tours and programs, Health & Fitness Center, aquatic sports, boat tours and The Spa & Shops. Amelia Island Plantation offers beautiful hospitality suites with ocean-views. From fine dining to casual elegance, Amelia’s restaurants offer the finest foods in a variety of atmospheres.

Exhibitors are encouraged to stay for the full conference, as the program allows plenty of opportunities to spend quality time with prospective clients. Exhibitors are invited to develop meaningful relationships by hosting a golf outing, a boat tour, a scavenger hunt, a beach bon-fire or pool party. They can also demonstrate their expertise by presenting a mini-educational seminar in the Exhibit Hall.

Exhibitor Fees
Early-bird exhibit fees start at $3,000 for a standard 10’ x 10’ booth (ending October 31, 2007) or $3,500 thereafter. Table-top exhibits for the popular Monday night Paper show, available to manufacturers and distributors of paper products only, will be $750 for early-bird registration (ending October 31, 2007) or $850 thereafter.

Print Buyers Online.com is also offering its exhibitors the opportunity for year-round promotion by combining online sponsorship of its over 12,000 member e-community or its "Think Fresh" educational web content package with a Print Oasis exhibit. Savvy print suppliers can drive more traffic and repeat visits to their websites by using this innovative web interface tool to educate buyers. Print Buyers Online.com also provides its online sponsors with tremendous exposure and a proven lead generation program. Details are available in the Print Oasis 2008 Exhibitors Prospectus.

Print Oasis 2007 exhibitor, Dan Freedland, V.P. Business Development of Primary Color, Inc. shared his experience at last year’s conference, “Print Oasis is an excellent venue for those wishing to interface with a significant community of qualified print professionals in a condensed time period.”

Booth location and event sponsorship opportunities are all determined on a first-come, first serve basis. Interested exhibitors are encouraged to contact Kimberlee Sautter, Conference Manager, today to guarantee the best spot at (703) 534-9305 from 9 a.m. to 5 p.m. EST or via email to ksautter@e-pbo.com. For more information about the conference, please visit www.printoasis.com.

With more than 12,000 members, who purchase over $14.1 billion in printing each year, Print Buyers Online.com is the premiere place for education and information for print buyers. A free, educational e-community, PBO provides tips, articles, Q&As, tools and resources to help print buyers learn new and existing technologies and best practices for the business of working with print suppliers. In addition to providing valuable information, Print Buyers Online.com conducts research to understand the needs and challenges of the print buying community. For a free membership to Print Buyers Online.com, please visit the PBO website.

Print Communications Professionals International (PCPI) - Created by Print Buyers Online.com, PCPI expands the services of PBO by offering robust education, resources and networking opportunities to help professionals who purchase print media provide greater value to their organizations. PCPI encourages best practices to enhance the buying and selling experience and promotes the exchange of information in a non-sales environment. The association also offers advanced certification for print communications professionals. For additional information about PCPI membership, please visit the organization's website.