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Knowing what to do with the ‘other jobs’

Monday, 04 September 2006
By Print 21 Online Article

Dave Bell of Quote & Print continues his series of business strategies, focusing on how to manage your business in a meaningful and profitable manner.

In my last article in this series I talked about knowing what your business does best.

Hopefully this should cover about 80 per cent of all the jobs you print. You know the sort of work you do best. Most of these jobs go through your factory without a hitch. Your staff produce the jobs in the expected time. You get a good discount on the paper. Your customers always pay on the agreed terms.

The question is what to do with the remaining 20 per cent .

The answer is … it depends.

Scenario 1. A customer who always gives you the wrong sort of work to print. Often this happens with an over enthusiastic sales rep who is too keen to make sales.

Solution: Gradually increase the margins for this customer. You will either turn him into a profitable customer or he will leave.

You should also review how you pay commissions to your sales reps. If you pay them on straight sales volumes then the incentive is for them to get a sale at any price. An alternative that many companies use is to pay the sales rep his commission based on the margin or estimated profit on each job. This will increase his motivation to keep on negotiating with the customer to get the best possible price for each job.

You should make sure that your sales reps are completely familiar with all your printing processes and know exactly what your factory can handle best. Don’t take this for granted. Go out and ask them. All too often once a sales rep is hired he is told to hit the street straight away and start selling.

In addition make sure the rep knows the most economical order quantities. Then he can encourage the customer to order a reasonable amount of print. And also he can greatly improve customers cash flow if they know they don’t need a print run of 600,000 brochures because it is almost the same price to have a run of 50,000 each month, or to have a run of 100,000 as required.

Scenario 2. You have a customer who gives you a mix of profitable work and unprofitable work.

This is the time to do some creative thinking. Is it possible that by redesigning the print job you would be able to print it more profitably?

For example there may be an equivalent or almost equivalent stock that is better to use. A small change in the size of the job may give a better number up on the press. You may be able to use a common knife or die. If they group their printing orders then you may be able to gang some of their jobs when printing them.

Is there a trade printer who is better able to handle this type of work? Is he willing and are you happy to sub contract the work out to him? Does your customer care if you don’t actually physically do the printing as long as you manage the process?

Just as you need to educate your reps you may need to educate your customer. Which of their particular requirements are must haves, and what are just We’ve always done it this way.

Scenario 3. You have these horrible jobs to print and you know from past experience that you may need to reprint them from time to time. Examples of this sort of work could be printing where there are several finishing operations that are subcontracted out.

This is where you need good procedures and a good quality control system. Make sure your estimators know to always allow for sufficient overs in case of spoilage by the outside contractors. Update your procedures so that you can identify these difficult jobs as soon as the order hits your factory. Make sure that you staff check them at each step of the production process. Talk to your suppliers/subcontractors so that you fully understand their requirements. If there is a problem with your subcontractors make sure there is a procedure for identifying who is responsible and who should be reimbursed.

At the end of the day outsourcing these difficult jobs may slightly reduce your net sales. You may be able to reduce your staff levels as a result. What you want to aim to achieve is to turn your whole operation into a highly efficient and profitable machine which can effectively compete against other printers in this age of shrinking margins.

This article was brought to you by Quote & Print

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