Value Add: Six Core Areas of Print Cost Optimization and Efficiency for Executives

pyramidvalueaddReviewing the cost power of in-plants is important for any executive wanting to make key decisions regarding cost and value and profits.  Many make the mistake of simply categorizing in-plant production as a cost reduction or expense area.  That can blow costs up in many other areas of the company.  However, an inefficient in-plant that has not worked hard at value add may provide cost reduction after all.  Unless, you work on the value add.

Profit leaders in commercial print plants keep Value Add at 65% or better.   An In-Plant can do better.  I’ve seen plants up to 85% where materials are not of high significance.   Part of the problem is that corporations and organizations outside of manufacturing don’t get the concept.  Even companies in manufacturing forget to apply costing and planning principles to individual departments that are applied to the entire company profit and value calculations.

What is Value Add? 

Value Add is simple.  Value Add is what your shop produces minus materials (paper, ink, plates) and minus what you shop out and outsource to others (mail list handling, large runs, design, etc…)  When you shop out the work,  you are not adding value for the client, the departments,  or your business.  Someone else is adding value.  It devalues your overall business proposition.

Managers and executives, no one can do 100%.  We need to measure today and work to move it above the 65% line.  This is long term value for you as a business.  You can be making profits off of this work and improving your single source provider influence in the mind of the customer.  Customers want to go once place and get service from you, the provider that understands their needs.

So Where Can You Improve an In-Plant Service?

Simple.  Ask the people sourcing work out of the company and organization.

Are there posters and banners and event collateral being serviced down the street for three times what could be produced in-house?  Trust me, if you are doing these types of work and not enabling the in-house team with equipment to produce, you are losing money.  It is costing you profits.

Is direct mail being serviced outside?  Your in-plant should be working to integrate that into their digital offering.  If your in-plant is already out-sourced, you should challenge the provider in this area.

Are you supporting online and variable print collateral across your organization?  It is expensive out of house.  A committed in-house or commercially provided in-plant can make that area work excellence for your organization.

What does your organization need?

Are you doing finishing at a secondary site and adding confusion, less reliability, and production lags in delivery?    Think it through.

As an executive, you should be challenging the provider whether your in-plant is in-house or commercially provided.  As an in-plant manager, you should be actively seeking product and services that build the value of the offerings to the business or organization.

Value Add builds business value, expands worker capability and contribution, and reduces production mix ups and lags due to outsourcing.

Next up?  Product Optimization…  a real place to get costs down and profits up.

Responsibility and Sustainability

Pain Points

Removing Workflow Constraints

Profitable Cost Reduction

Removing WorkFlow Constraints = $$$: Six Core Areas of Print Cost Optimization and Efficiency for Executives

ImageEvery organization needs improvementEvery executive needs to perform with velocity and validity.  Velocity means right timing.  Validity means right area.  Over time and travel, it has been my experience that any operation can gain a 25% improvement in costs and performance through some basic approaches.  Most don’t believe it.  That includes the one that just improved.  Yet, most remain semi-productive behind walls of indecision and fear.

The language of growth resistance is well documented. 

  • We’ve done that before and it didn’t work.
  • So and So would never approve that.
  • You don’t understand MY situation, we are different.
  • Oh, that’s just the article of the week program, we don’t need that.

On and on it goes.  The language of fear and resistance is pervasive, stifling, entitlement driven, and deadly in the long run.  It is valid.  Yes, many times each of those statements has been true.  That does not make them true in every situation and certainly does not excuse using them to resist thinking creatively and cooperatively to build new solutions fit to present demands.

WorkFlow Barriers

So, let’s explore the first area where an executive, manager, or director can assist so an in-plant can develop greater value for an organization and move from being a cost to a benefit.  That is the focus.  Get the in-plant into a benefit position for the organization.  Eliminating costs is a dreary and sometimes necessary effort.  Yet, the real focus is to improve the bottom line.  The real need is to broaden the gap between expense and revenue.

You Need Print 

Every organization has needs for print and related services.  The needs vary according to the demands of the recipients of the product or service the organization delivers.  The needs vary based on the methods of marketing and sales and support that are in motion and planned.  Meeting those needs effectively and efficiently and responsibly with attention to compliance becomes the challenge for the in-plant operation.

WorkFlow Release

The first stop on improvement is workflow efficiency.  This area has been overanalyzed in the industry to the point of becoming high centered in detail approaches.  Most plant managers and team members have a great grasp on what could be done to improve efficiency.  Most plant managers and team members do not have a great grasp on how that will improve the service for the people needing access and turnaround.  There is no reason to simply save time and steps.  The need is to gain improvements that return value for people.

Simple, Simple, Simple

Loaded in my phone/camera are pictures of many shops located in many settings.  There are ten times as many of these in the gallery of photos in my mind.  Short ceilings, cramped corners, stacked supplies, dangerous aisles, and overheated equipment plague my mind.  Whew!  How in the world do we get into these situations?  What was that last person thinking when they reduced access to the supplies the operator needs 10 times a shift?  It is not usually expensive to resolve some of these items.  The human factor becomes the biggest blockade.  Convincing people that life can be better and less hectic and reduce costs for the client is the tough road.  Trust me.  Sometimes a little reorganization of equipment and supplies to fit the workload of the current and planned product production can return dollars in reduced bad runs, faster turns, less utilities, and better uptime on equipment to allow increased volume.  Costs go down quickly and morale goes up just as quick.

Smiling Servants Stimulate 

Good morale reduces costs and improves revenue.  In a production shop, parties and warm and fuzzy photo moments are not the quickest way to morale improvement.  Give a production worker the right tools and the right training and a person to serve and get out of the way.  The fastest route to morale improvement is workflow blockage removal.  You need to “get ‘er done”.   Bring on the orders and allow top performers to serve with excellence.

Deadly Organization

In a healthcare campus, our shop was located next to the morgue.  That thought can be quite a downer.  One worker complained when a nurse stepped in and asked her to hold a lifeless baby while she finished other arrangements.  Whew!  Some shops have bigger issues than others.   But worse than the morgue was the fact that the equipment was placed badly for heat exhaust and the air temperatures and volumes needed to operate were inadequate.  The team was in a constant state of fear a piece of equipment would be impacted and production would slow or halt.  No one can be productive living in fear of the unknown.  A little creative rerouting of cooling supply arranged by engineering alleviated the heat overload.  Some quick rearranging of equipment between 2am and 4am one morning brought more air flow sensibility.  An almost no-cost solution gained days a week of equipment uptime and brought pride back to the production team.  The doctors and nurses and administrative staff began getting what they needed to do their jobs more effectively for patients.   New work requests began to flood the shop as reliability of service returned.

Lively Results

Process documentation is not an option.  In an insurance group, we discovered there was no integrated production plan understandable by the entire team.  Every person on every shift had a different interpretation of how to get the job done, what was priority, and who else was to blame for every issue.  No one really knew when work would come out of the shop once it went in.  Ten day turnarounds were not uncommon.  You probably have worked with groups like this.  They are great people buried in an inadequate process built over time and patched together like Frankenstein with each change in organization need and chaos and priority of the day.

You are not going to get the full answer in this short article to how we solved this problem.  But, I will tell you, it was the team that solved it.  I will tell you they began working through point to point touch solutions and tracking.  I will tell you they talked to the people receiving their services and included them in prioritization based on business impact not personal departmental preferences.  I will tell you it takes executive support.

Oh, the team went to 8-72 hour predictable and communicated turnarounds on ten times the volume with the same staffing and equipment levels.  You would love to get that wouldn’t you?  The cost / benefit impact on company overall services became more than the cost to run the plant.  Think this way.  The beginning cost was $2000x and the volume was 1000x.  The resulting cost was $1001x and the volume was 10,000x.  Pent up demand was going to over-sourcers at higher costs.  The unseen expense to the organization of many departments having to arrange outside services couple with dollars buried in hidden budget line items was huge.  It went away.

Rapid workflow benefits your ability to work on the next area.  You can’t get buried in workflow improvements.  It is just one area needing attention.  There is a balance and every area needs attention all the time.  Next, we’ll talk about value add.  It has to improve.

Responsibility and Sustainability

Pain Points

Pain Points in Print Affect Executive Decisions: Six core areas of print cost optimization and effectiveness for executives.

ImageBefore we take a look into the six areas, let’s look at why these areas need addressed.

What is driving this fear of out of control print and media costs?  What worries the executive?  Pain points to the problem.  It does not always point to the solution.

Marketing Disconnects

There is a valid fear among CFOs that continued dollar loss is unavoidable in print and related communications services.  Studies show that in excess of 70% of CEOs distrust the marketing engine.  The inability of marketing and communications areas to relate expenses back to profitable company growth stymies a financial analysis.  Why settle for this?  There are gains to be had.  There are profits to be built and encouraged.  The activity can be and should be measured with a hard look at Return on Marketing.

Media Proliferation

Another pain point is the threat of new media channels and mobilization demands.  Marketers and executives alike tell analysts they are afraid they and their organizations do not understand what they need to know to adapt.  They are thrashing and reading statistics of other attempts in similar organizations in disbelief and despair.  What to do?  Where to start?  How much to spend?  Will the long term value traditionally obtained through customer loyalty and persistency be affordable?  How many channels of communication need to be engaged to be effective?  Which will be life threatening if you don’t engage now even if the expense is unmanageable and lacks decent measurement points?

IT Collision Course

Add to those two the collision of IT and marketing that plagues most companies.  IT has been the technology driver and owner of control of data assets.  A continual emphasis on security and access and controls has made the information inaccessible and hard to understand for most marketers and communicators looking to take deep dives into segmentation and determine relevant categories of buyers on which to focus.  Proliferation of disparate systems within most organizations means the data is not congruently analyzed.  Add to that mess, the data was accumulated for operational purposes not for human communications and conversation and concern.  It is dry and most times irrelevant.  To work in the conversational communications of people to people in which marketing happens, the systems of accumulation and the intelligence behind them must be reworked.  You cannot take a financial programmer and build a human sensitive interactive analyst.  The change does not work in most instances.  Certainly attempting to do it in the speed needed by marketing and communications and sales tasks most companies well beyond the capability of their human resources departments.

Late Adoption of New Media Marketing

Face it.  You’ve waited too long.  The competition is racing and working with new media and you just got your facebook presence online.  It is static and not getting feedback from the right people.  Forget about customers in this world.  Focus on people.  It is people that buy your products.  And they are not talking to you.  You have done something, but it is just not working.  How do you leap frog over the inaction of the last few years when you should have been an early adopter?

Summary and Setup

If you agree with the dilemmas posed above, you know you have to do something about that massive print engine.  It is a powerful tool in the Marketing 3.0 Blueprint.  Trust me.  All those other channels need print to bring them to life.  That is one of the lies of the technology thought base.  If you buy a lie in the beginning, you will suffer and suffer and suffer.  Print is not gone.  It is radically changed.  It is interactive.  It is humanized.  It is responsive and direct and timed.  It is focused and integrated.  Using it in flat and traditional manners will get you decreasing return on your marketing and sales dollars.  You need to optimize the engine and take quick advantage of the power of customization and integration of print media with other channels of communication.  It is not cheaper to skip print.  It is foolish.  Neither is it smart to print like you have been printing.  That won’t work.  You need a new print engine that is dynamic, customized, interactive, data driven, communicative, and humanized.

Next Installment:

We will begin to look at the six core areas that must be addressed in a print engine overhaul to build the powerful and competitive approach for your organization.  You must.

Responsibility and Sustainability

Removing Workflow Constraints

Profitable cost reduction in print and communication services.

pyramid

Every executive is tasked with reducing costs and increasing profit.  We can forget.   The press of managing the budget can get tied into just meeting the plan instead of achieving the underlying goals.  An officer has a fiduciary responsibility to increase shareholder equity.  You can’t just “manage the budget”.  It needs to improve impact on the bottom line.

Print services is one of those areas that just seems to take money and not give a return.  That is a shame.  Print services can be such a profit booster, when rightly implemented and attached to corporate initiatives.

Last week my partner and I reviewed two university in-plants.  They were ivy league and state.  In just a few hours we were able to isolate incredible opportunity to both reduce costs and expand profitable services.  You just have to know where to look.

I’ve written quite a lot lately about business plans and new product development.  Those were the subjects taught at GraphExpo and are being reviewed by hundreds of folks daily.  Some of the feedback I get is a need to be able to assess a print services operation and come up with a viable action plan to improve impact on the bottom line.  Too often managers and consultants are looking to survive.  You need to thrive.  There is no reason not to thrive.  The opportunities are amazing.  Over the next few weeks, we’ll explore how to thrive.

There is no reason to just get along.  There is no reason to roll over to conventional strategy of limiting the benefit of your overall communications engine through bad sourcing decisions and coagulation of IT, marketing, and print services.  Where you source your print and communication services is a growth decision not a cost cutting decision.  You can throttle your progress engine by making this decision incorrectly.  Done correctly, you will cut costs, improve service, increase access to effective communications and be a hero.  Done incorrectly, you will cut short term costs and produce blockages in your growth and communications engine and frustrations for marketing and sales and the data miners.  You cannot grow using yesterday’s wisdom in a thriving world of interactive print, direct, indirect, social, online, mobile, and mass virile and viral communications.

Related:

Responsibility and Sustainability

Removing Workflow Constraints

Pain Points

Starting Fresh – Get an innovative pop to your great insurance marketing idea.

Every marketing initiative starts with a fresh idea.   Somewhere either a brainstorm erupted in a private time or meeting or a customer voiced a need and you awakened.

What do you do with that fresh idea?

Do you run rampaging through your team and ask them to “get on it!”?

Do you get tied up in a single sale and miss big movement?

Do you thoughtfully consider your options and begin analysis never to come to a conclusion?

Do you gather a group of agents and brainstorm?

Do you pay an exorbitant fee to an advertising agency to develop it for you?

Do you throw the idea out on the internet to one of a thousand groups on linkedin or g+ or a blog?

How can you get this thought blurb from being  just an idea to something that will potentially produce income and generate qualified leads for you as a marketer of your services?

Okay here is a new and quick tool to help.  It doesn’t do it all, but pretty close.

Blog | Big Dog Innovations | Your Marketing Department’s Secret Weapon http://bgdg.co/SuccessfulMarketingCampaigns

Views on Shop Transformations – Conditioning Change For People

Discussions with shops around the nation result in a few inevitables.

1. How do you get people to move forward?

2. How do you get other people to move forward?

That is a purposeful pun.

It really gets to be all about people in our efforts to change products and processes.  Those changes always mean changes in people, projects and props (the tools and technologies).  But the people are in the center of it all.

Product change means marketing and selling customers and investors.  For an In Plant, they are the same.  Customers are investors.  They are the source of income and many times the only source.   Sure, the CFO, COO, and CEO have strong opinions and input especially for transactional product lines.  Yet, more and more effective print and distribution management for In Plants must engage the Marketing and Sales customers.   That is high powered growth.  Transactional has a high likelihood for being sourced and reduced significantly.  You must move forward.

Process change is the same.  Your highest sell is to your internal production teams.  Next comes the customer.  Many processes can be changed without engaging the customer.  Yet, you need to ask yourself why you are doing changes if the customer does not benefit?  They have an interest, even if it is just to know you are working on cost improvement or cost containment for them.

Prop changes are for the products and processes or they should not be done.  Nuff said.  You should not be retooling just to get the next fancy wangamahoochie.  Technology must meet real business demand to go through the pain of change.  Your production team must understand how the customer will benefit along with the product and the process.  Your production team should improve skill and contribution and have more fun when you change technologies and tools.

Projects are what implement changes.  Have them or die.  A defined way to analyze, define, plan, implement, and optimize goes with every change.  There are budget approvals and customer approvals and departmental approvals and  worker approvals and self approvals and vendor approvals and IT approvals and on and on and on that must be planned and coordinated along the path to productive and prosperous change.

So people are involved in every step and every area of change.  Those murky, hard to understand, mental, emotion, physical, and spiritual beings can make change heaven or hell.

Just for fun think of four types you will encounter.

Mundane Mary:  The person will ask question after question.  She will want to understand the universal and specific reasons for the change.  Put her on the analysis team with a specific deadline.  She might drive you insane, but she might find a hole in some plan that saves your hide.

Slap Happy Sam:  The person will want to implement without a thought.  Every day is an opportunity for a new party.  He can get inclusion guaranteed as long as he is armed with a few facts to support his sales of you and the project.  Make friends with him.  Get him to understand how this change will improve happiness for someone.

Hard Ball Bart: Whew.. he will want profitability or cost reduction.  This guy is important.  He will make you justify in the right manners.  Convince him.  Do your homework.

Amiable Amy:  She just want to get along.  So make sure she is on the implementation and training track.  She will work until it works for everyone else.

This is a blog not a book.  So I am ending here.  Just some thoughts to stir you up on the path to progress.

Looking for an experienced email blast vendor, any suggestions??? | LinkedIn

Looking for an experienced email blast vendor, any suggestions??? | LinkedIn.

This discussion hits on many of the options in the simple marketing techniques being used in many instances today.

Somewhat missing is emphasis on the human elements and interactivity needed to realize significant gains.

Email blast in many instances is a practice being frowned upon by the DMA and top marketers.  Of course, when a prospect or customer is given the ability to opt in with verification, email with appropriate content can be powerful and meaningful.

Meaningful and relevant and responsive use of online approaches can bring customer retention and loyalty.  Walk purposefully and focus on the right folks.