September 29, 2014 •Brian Watson
Cutting costs is rarely a fun exercise.
It often requires tough choices, or haggling with vendors, or tough choices after haggling with vendors.
So when you can reduce overhead just by doing something you’ve always done – only with more efficiency – it can feel like a real breath of fresh air.
And that’s one of the primary appeals of outsource print management. It doesn’t require a significant investment or a big change in your operations. There’s no juggling staff or painful learning curve.
Instead, it’s about improving efficiency and productivity by introducing more control and accountability into the process of buying and using print.
Why Outsourcing Matters: The True Cost of Business Print
Look, I get it: conventional wisdom hold that print is a commodity. Like paper clips or toner cartridges, it shouldn’t matter how you buy it, only that the quality holds up and the price is cheap.
But how accurate is that thinking really?
After all, a company that bids on printing ad-hoc – waiting for a need to arise and then soliciting quotes job-by-job – sacrifices leverage with suppliers and control over the order process.
One department in one division of a corporation won’t be able to exert favorable terms on things like cost, quality, and time-to-market.
On the other hand, one corporation that partners with an outsource provider that works with dozens of similar businesses likely has the scale and relationships with printers to deliver on those metrics and more.
Not to mention the tools to closely monitor things like usage-by-location and inventory on hand. Or the expertise to suggest smart procurement strategy.
A Holistic Approach to Controlling Print Costs
Outsource print management delivers value to businesses by helping them use print more efficiently.
And while item management may seem like low-hanging-fruit compared to the costs of producing printed materials, printing alone actually only accounts for between 7% to 22% of the total cost to produce and manage collateral.
On average, for every $14 spent on printing, an additional $96 is spent on ancillary services – everything from creative costs, to administrative overhead, to delivery and fulfillment.
Waste is another hidden expense. Up to 25% of the print materials an average business purchases will either end up destroyed due to obsolescence or be used despite containing out-of-date information.
That’s thousands of dollars – and countless hours of employee productivity – to source, manufacture, and store documents that will never be used. Or used, but in a way that damages brand integrity.
It’s also a serious print supply chain liability; one that makes it much more difficult to keep costs in line.
And – along with stock-outs and unused inventory that wastes available cash flow – it can be traced back to a lack of information and oversight.
You can’t order in scale if every location or department manages the process independently. You can’t eliminate stock-outs if you don’t know how often an item is used, or just how much you have in inventory.
It’s difficult to build flexibility into your print supply chain if your organization lacks access to the right tools – printers that have available capacity to turn a job around quickly and efficiently or web-to-print technology that enables mass, 1:1 personalization of print assets.
Companies that don’t employ an integrated document management strategy are forced to piece together inventory, order, and usage data from multiple suppliers.
And that leads to bad habits – hording that ties too much cash to inventory and drives spoilage and waste. Or frequent stock-outs that trigger expensive rush-orders and leave you without the documents your organization needs to conduct day-to-day business.
When companies outsource, they gain control over the process. And with added control comes smarter procurement decisions.
Building a Better Print Approach
What administrative capabilities should you look for in an outsource print management partner? Well, while there’s no single magic bullet, analytical, cost-effective programs do tend to hinge on a few key factors.
One, you have to know how much collateral you purchase and use across the organization. Outsource print management is not a snug fit with a decentralized, laissez faire approach to procurement.
Two, you have to have a partner with the ability to leverage economies of scale in its relationships with key providers. That’s the source of the speed and cost advantages that fuel an efficient program.
Finally, you have to have a procurement platform that puts everything at your fingertips. That means real, actionable data from individual purchase locations and across the enterprise.
Sure, a simple ordering is nice. But those aren’t hard to come by these days. What is still rare is an enterprise resource management engine that ties everything together on the back-end; offering predictive intelligence that makes it easy to make the right purchase decisions.
Key Tools to Consider
• Purchasing Power
To leverage the purchasing power of your entire organization, you’ll need to be sure that all locations, departments, and employees are on the same page. Centralized print supply chain control ensures that there are no rogue purchase centers chipping away at your profitability.
• Print Supply Chain Visibility
Smart decisions require access to the right information. After all, you can’t manage what you don’t measure.
Linking each order location in your company together to create a virtual print network provides easy access to location-by-location procurement and usage information. So nothing - no order, no item in inventory, no location usage figures - falls through the cracks. And everything, no matter how small, is tracked and reported.
• Rights Management
Centralized ordering can be difficult when an organization has multiple locations or departments ordering materials.
Master administration and monitoring capabilities provide the enterprise-wide control needed to maintain collaborative practices. So it’s easy to double-check that employees are staying on top of inventory and ordering when appropriate – and in the right quantities. And that all orders are sourced and purchased through a corporate channel using vetted, approved vendors.
• Procurement Standards
Visibility is nice. But data also needs to be actionable.
Information should be easy for purchasing managers to access. But it ought to be easy for them to understand and use, too. That means standardized item masters. And consistent order principles that are aligned company-wide – making it decidedly simple for employees to know when and how to place orders.
• Online Ordering
An online print management portal is a must-have tool for businesses with a decentralized print supply chain. Online ordering simplifies a formerly cumbersome process – so time that the time it used to take employees to order items and babysit fulfillment can instead be redirected to core business.
Flickr Creative Commons Image via My Name Matters Not / Cropped from original