The Finishing Line

QUALITY - YOU ARE ONLY AS GOOD AS YOUR LAST JOB

2012-01-26T11:43:00.000-08:00

By Mark Porter

Quality is a key component to your company's corporate image, a large part of your mission statement and vital to your continued success.

Equipment manufacturers are continuing to incorporate quality control features into their machines.

There are certification programs such as ISO that can install procedures and policies that maintain high quality standards.

Software can also help in maintaining high quality control levels that will ensure you continue winning jobs and maintain an excellent reputation.

1. Customer Profiles

Typically only the CSR or company owner knows exactly the ways a customer wants their jobs produced. By creating a company profile you make this information accessible to all employees 24/7. This ensures that jobs are produced correctly and on time.

What overs are acceptable. Is a PO required to start. Won't accept deliveries after 5pm. Must use their truck. 5 Samples must be supplied. The demands go on and on.

Whenever there is a question about a job the answer is at every employees' finger tip.

2. Electronic Orders

Electronic Job Tickets vs Paper Job Tickets provide immediate delivery of job information to the plant. Think of the process you must go through when there is a change to a paper ticket. The change is received in the office and made on the ticket. The ticket is the printed 3-4 times and a CSR must distribute these revised tickets through out the plant and find the old tickets to ensure no mis-information is present. This represents a time delay in production working with accurate information. The result is potential extra costs and incorrectly produced product.

With an electronic order the revised production information is distributed to plant employees the second it is received from the customer. The changes are highlighted and in fact can change right before your employee's eyes. No delays - Greater Quality Fewer Costly mistakes.

3. Automatic Email Job Confirmations

Automatically confirming the specifications of the Order you just opened with the customer ensures that the job is started properly and it shifts the responsibility back to the customer. If there is a mistake in the information used to open the job it can be caught immediately.

Also if a confirmation is automatically generated for each change made to the order then you have a complete history and approval of each change or lack of change. If the customer knows he will get a change order for each change conveyed to your company and makes a change and does not receive a change order he knows to check up.

4. Problem History / Non Conformance

Tracking problems and solutions associated with jobs, customers, vendors, employees, departments and even processes can maintain a high level of quality.

First you are creating a knowledge base that can be used by all employees to solve future problems. Flagging problems that result in waste that exceeds allowable tolerances ensures Management is made aware of issues that may result in short counts.

Video can be attached to non conformance issues to help substantiate claims of problem with materials provided by the customer or demonstrate proper procedures to maximize quality.

Lastly a Non Conformance program can be used as a teaching/training tool to educate customers on the ways to prepare jobs to ensure maximum quality. Not only does it help quality but strengthens essential customer partnership relationships.

5. Job Inquiry

A strong Job Inquiry program puts information on all aspects of a job at your finger tips.

- This ensures information is not lost

- It encourages employees to look up information because it is easy to do. This avoids employees relying on their memories and making mistakes.

- Information is made accessible to all employees as soon as it is received improving quality and reducing errors and extra costs

Quality is a vital portion of any successful company's strategic approach to business. A combination of good equipment, certification programs and software can maximize your quality assurances.

ARE SAMPLES DRAINING YOUR COMPANY?

2011-11-27T06:46:00.000-08:00

By Mark Porter

Samples are a necesary evil in the businesses of Print Finishing, Trade Binding and Die Making. Due to the three dimensional nature of the products these industries produce and peoples general inability to visualize the need for samples is large.

But do you collect revenue for these samples or do you know how much the production of Samples can cost you in any given year. It is vital that a business either collects revenues for all the goods and services it produces or at least is aware of costs that it should build into the overheads to ensure they are captured indirectly.

Our experience with members of these industries is that are neither collecting revenues for this service either directly by rebilling or indirectly by building these costs into overhead. Therefore samples is a direct drain on your profits.

You should open a job for each sample this will allow you to do several things.

1. You can have a unique numbering system for Sample Jobs as opposed to regular jobs so employees no they are working on a non rebillable job and will be more aware.

2. You can have information on the Job Ticket that is specific to a Sample. The information is not mixed in with other "regular" job information. Employees do not have to risk confussion or waste time hunting for sample information.

3. The information on the Job Ticket is specific to Samples and therefore jobs can be found and managed based on on that information. You can for example is how many times the file was resubmitted etc.

4. Track costs associated with the sample. Even if you are not going to rebill the customer it is important that you know how much each sample cost you to produce and more importantly how much sample making as a whole costs you each month and each year.

5. If you do rebill sample costs you can then track this through profitability because you have your costs from Job Costing and your Sales from Invoicing. Profit = Sales - Cost.

6. Track costs by customers. Track progress of Sample through Production.

7. Based on costs either work with customers that are incurring large portions of the expense or build your sample costs into your overheads to ensure you are recovering Sample making costs and not just watching your money go down the drain.

As we look for more and more ways to watch expenses and capture more sources of revenues - Samples can be an excellent place to start.

SOFTWARE BENEFITS WITHOUT UPFRONT COSTS

2011-10-27T09:53:00.000-07:00

By Mark Porter

We are seeing more and more software companies offering their products on a monthly basis as opposed to a purchase/license basis.

One of the reasons for this is that software systems can be a large investment. There is the cost of the software and sometimes hardware purchases as well. In todays economic environment coming up with a large outlay or borrowing of cash can be difficult and most companies in our industries have a very production equipment first oriented attitude.

By commiting to software on a monthly basis you can get the many benefits software can bring to your company without the large initial outlay of cash that may take away from other parts of your business.

By commiting on a monthly basis you get benefits that can contribute to a better managed and therefore more profitable business immediately rather than waiting until you can afford to make an outright purchase.

The money saved doesn't have to go to an information system now the money saved can go to other production enhancing investments

Some of the benefits you can realize immediately are:

1. Information that allows you to make better and faster decisions

2. Identify trends and patterns sooner so you can react more timely

3. Increased efficiencies so that more work can be done by less people and done in a more accurate method.

4. Better Communication between office, plant and customers. Better communications reduces errors, improves quality and increases production efficencies

5. Improved Customer Service because data is at your finger tips

6. More convenience for customers with features such as On line Inquiries that provide 24/7 access to their data. Strengthen the bond with your best customers

Paying monthly also allows you to see more immediate return on your investment. If you are paying say $400 per month for software you can very quickly justify that expense as opposed to $10-$15,000 upfront investment.

The downside is that over time you will pay more for your software but if the software continues to deliver the desired benefits then it doesn't really matter. If the software does not bring the benefits you were expecting it is easier to remove that software and try another.

Whether you pay monthly or make the purchase/license decision it is vital that your company gain the benefits that software can bring to it.

SCANNING YOUR COMPANY FOR SAVINGS

2011-09-29T12:44:00.000-07:00

By Mark Porter

As companies continue to look for ways to cut costs and become leaner it is more important than ever to have information at your finger tips.

With less staff to do the things that need to be done - any search for information or dcuments can take away from important production tasks and may result in costly mistakes or missed delivery dates.

If you can reduce the amount of time you spend answering the same questions for customers each day your productivity and savings would dramatically increase.

Having information at your finger tips is great but sometimes the customers questions require access to the original documents and paper work. At that point you must get up and find the actual job bag and hope the documents have been correctly filed.

With scanners today it can be quick and affordable to store original documents in your computers for future access.

Ideas of documents you may want in your system are

Quote Sent to the Customer

It is great to know the price you sent the customer but if the customer calls with questions you will want to be looking at the same document he is looking at when you answer his questions.

Customer Fax You Based Estimate On

We all get the hand written drawing faxed or emailed to us which we base our estimate on so it would be great if the drawing was electronically attached to the estimate file so it could be referenced easily when questions arise about the quote

Original Customer PO

Questions arise regarding the customers original specifications or requirements that can only be answered by the Purchase Order supplied to you by the customer. Allowing access to the original purchase order on the screen without having to find the physical job bag can save time and avoid mistakes

Signed Packing Slip

Customers always want to know when and how their job was shipped but often they need to know who signed for the job. When your driver returns from his deliveries the signed packing slips can be entered into the system for easy reference later on.

Other Images

As they say a picture is worth a 1000 words and therefore it can be very beneficial to include images of other parts of the Production Process.

Other images and files that you should consider for quick access are die images, finished product images and video documentation of problems and training material.

Access images from your CAD/CAM system or scanning images of the die into the system gives all employees access to the specific information they need to produce the job correctly.

Images of the finished product can help in the production of job.

Video of problems encountered in the past and video of ways to preventing the same mistakes can reduce costs and keep schedules on track.

Making Videos of difficult job setups or less used features of equipment immediately available to employees can save vital production time.

Therefore we can see that technology that allows us to add or scan images into our computers and allows employees to quickly find those images can help companies save time and money.

SOFTWARE SAVES MONEY: SMALL INVESTMENTS - BIG RETURNS

2011-09-13T08:18:00.000-07:00

By Mark Porter

Well the summer is over and the fall is always a time to get re-energized. With the current news we are hearing it looks like there are more challanges waiting for businesses in the coming months.

Companies in the Print Finishing, Trade Binding and Die Making industries must continue to find ways to save money and increase revenue.

I think it is safe to say that software and computers are here to stay and they are an excellent way to achieve these goals.

Companies can get caught up in thinking they have to purchase a full MIS/ERP type system to see any benefits. Although full MIS/ERP systems can bring tremendous savings invidiual modules and programs can also provide tremendous benefit in reducing costs and/or increasing revenues.

Software such as gotomypc can give you access to your office computer 24/7 from any location you have access to the internet. The cost is approximately $20/month. How many trips do you have to save to the office each month to get a return on your initial investment.

Email blast software can allow you to reach your customers and potential customers very quickly. Software like this is often $20 or $30 per month. It does not have to generate many sales to provide an excellent ROI.

There are many Software APPs that can automate processes you require each day. Many apps are free or very low cost.

Individual Modules from full MIS/ERP systems can provide tremendous savings even if not fully integrated with the rest of the MIS/ERP system.

Customer Profile modules that captures the specific information for how each customer requires their jobs to be produced. Whether those jobs are Finishing, Binding or Die Making. The more informed your employees are the fewer mistakes they will make and that saves money.

Customer Profile $995 how many mistakes need to be avoided to return your investment.

Estimate History Programs can analyze estimates to see what type of work you are getting and losing. Track big desirable jobs to ensure you don't lose them for a stupid reason. 80% of revenue comes rom 20% of customers make sure your good customers aren't starting to look elsewhere.

Estimate History $995. How many large jobs do you need to win to return your investment

Order Entry programs can track changes to job after the job has been openned and can dat/time/employee and reason stamp the change to greatly increse your chances of collection legitimate extra charges.

Order Entry $1995. How many chargable extras do you need to collect to return your investment.

Purchasing modules can track POs, Receipts and Vendor Invoices. This provides and excellent cross check to ensure you only pay for what you have received and what you were quoted. How many wrongly billed items does it take to payback a purchasing system.

Purchasing $995. How many mistakes in Vendor Invoices do you have to catch to return your investment.

Receiving module for Customers dropping off Printed Goods. Emails notify you and your customer as soon as goods are delivered to your Shipping Dock.

Receiving Module $995. How many hours of lost production time because you were unaware goods were in your plant to you need to save to return your investment

Shipping programs that require a supervisor passwords to release the packing slip if the customer is on credit hold. Shipping Programs that allow you to put the Printers logo on your shipping documents that allow you to meet a tight deadline

Shipping $995. How many Jobs do you need to hold to return your investment

Die Mgmt modules allow users who have a large inventory of dies in their plant the ability to find these dies is often a time consuming if not time wasting exercise.

The result is remaking dies that already exist and that wastes thousands and thousands of dollars and cuts into profits.

The condition of the die is monitored to ensure that we are aware of any retooling requirements. Automatic notification goes to the Die Shop foreman when a die needs attention.

We no longer have to lose valuable press time and risk late jobs because a die was not ready to be used at the beginning of a press run or a press......

Die Mgmt $995. How many dies do you need to avoid remaking and how much press down time do you need to save to return your investment.

Data Sharing allows you to account for every minute of every day and every material used in your plant. Accountability leads to greater productivity and less waste. Even a small 5% savings on $2,000,000 dollars of labor and material going through your plant results in a $100,000 savings. You also get productivity tracking, Chargable and Non Chargable hours and much more.

Data Sharing starts at $4995. How long will it tak you to return your investment

BHR modules calculate the true costs of your business. Now more then ever it is important to know your true costs. After all Profit = Sales - Cost. If you don't know your costs how do you know your profits.

BHR $1295. Knowing profitability on every job rather than year end can quickly return your investment.

When thinking software you don't have to think a full system to get tremendous benefits. Sometimes small investments bring Big Returns

DIE MGMT - LOCK UP BIG SAVINGS

2011-07-28T08:19:00.000-07:00

By Mark Porter

A large number of companies in the Print Finishing, Trade Bindery Die Making, Packaging and Diecutting Industries use steel rule, foil and embossing dies.

Any user of dies can save a tremendous amount of money by simply managing those dies correctly.

Generally users of dies have a large inventory of dies in their plant but the ability to find these dies is often a time consuming if not time wasting exercise.

The result is remaking dies that already exist and that wastes thousands and thousands of dollars and cuts into profits.

By providing systems with extensive searching and sorting provisions we can find if you have a die that will meet the customers needs. These sorts are not just on the die specs but on the finished product specs as well.

Images of the die and the finished product will allow you to quickly identify that you have the correct die.

By using a bar coding system, a location finder and computerized take out and put back process we can ensure dies are located where we expect them.

Once we find dies we can record all specifications about the press run to ensure we can quickly get the die up to speed on the next run.

The condition of the die is monitored to ensure that we are aware of any retooling requirements. Automatic notification goes to the Die Shop foreman when a die needs attention.

We no longer have to lose valuable press time and risk late jobs because a die was not ready to be used at the beginning of a press run or a press run has to be stopped during production to retool a die.

This can save thousands of dollars in lost press time and / or overtime charges to keep jobs on schedule. Not to mention risking your relationship with the customer by delivering the job late.

A good system also tracks the disposal of dies and automatically notifies your customer and your own employees if I die is destroyed or returned to customer.

Die Management can also track the components ie type of rule, punches wood etc including costs that make up that die and track all employees that assemble or maintain the die.

This can be a very easy way for any user of dies to see substantial savings in their operations.

JOB COSTING = VALUABLE BUSINESS INFORMATION

2011-06-29T07:22:00.000-07:00

By Mark Porter

In any business knowing your costs is important. After all isn't Profit = Sales - Costs. If you don't know your costs how do you know your profits. Sure at the end of the year you can say I made money or I lost money but if you control your costs and use your cost data to make better business decisions you may not lose any money or be able to say I made more money.

March's blog discussed the importance and ways to collect your cost data. Now we can look at what we can do with that data once you have it.

May's blog discussed the proper Job Closing routines and the type of reports you should generate when a job is complete.

The last in this series of Job Costing Blogs will deal with the value of the data you have collected. Information is a valuable asset and when you are collecting information on every minute spent by every employee and machine, every material used and every purchase made you have a great deal of information that can be analyzed to identify better, more efficient ways to run your company.

The type of reports you can generate with this type of information are:

1. Production Analysis

It is important that you ensure that makeready times and run speeds you achieve on the plant floor clearly reflect the data you use in your estimating process.

If you are estimating a piece of equipment at 5000 per hour but infact you are only achieving 4000 per hour on the shop floor you are losing money every time you win a job. Conversly if you are estimating at 4000 per hour and are actually achieving 5000 per hour on the shop floor you are losing jobs you could produce profitably.

2. Employee Analysis

Not all employees are equal and monitoring production results from an employee angle allow you to identify which employees may need more training.

3. Historical Information

Capturing all data about a job provides an excellent foundation for estimating and production in the event the job is re run in the future. This can provide your company with a competitive advantage as to where costs can be saved or allow you the knowledge to requote the job in a manner that will ensure you re coup all costs.

4. Time Analysis

By capturing every minute of time spent by each employee and each machine we can analyze that time to make decisions. For example examine how many hours each employee worked and what percentage of those hours were chargable time. If you have employees that work less then say 65% chargable time you may have to examine their role in the company.

A good job costing system will record the hours spent make-readying, running, cleaning up, repairing, maintaining or having no work for a machine. A machine with increasing repair and maintenance time may need to be replaced. A machine with large amounts of down time may be an asset that can be sold.

Job Costing not only allows you to analyze how a certain job ran at a specific time but also allows you to analyze all aspects of your business in a very historical way.

PROPER JOB CLOSING ROUTINES OPEN DOORS TO PROFIT

2011-05-31T06:54:00.000-07:00

By Mark Porter

In any business knowing your costs is important. After all isn't Profit = Sales - Costs. If you don't know your costs how do you know your profits. Sure at the end of the year you can say I made money or I lost money but if you control your costs and use your cost data to make better business decisions you may not lose any money or be able to say I made more money.

March's blog discussed the importance and ways to collect your cost data. Now we can look at what we can do with that data once you have it.

Lets start with your Job Closing routine. When you complete a job do you simply pass the job to invoicing and have them bill the customer based on your estimated amount. If so you are probably missing valuable information.

Closing a job in an automated system should generate several useful reports and functions.

1. Close the Job to Prevent Additional Charges

When you decide to make the invoice the last thing you want is to have employees still incurring costs against the job. Trying to get a customer to pay additional charges after you sent them the original invoice is at the very least embarassing.

Part of your closing procedure should prevent additional time, materials and purchases being placed against a job without a supervisor OK once the billing process starts.

2. Full Listing of all Costs Incurred

The Job Closing process should generate a report that lists all labor hours and cost, material costs and purchases that went into producing that job. Ensure you are aware of all money that went into the job. Your closing report should offer you the option to view the data by dept, cost center, operation or transaction level.

Generally these reports are viewed at a cost center level. This means we would see a Total Hours and Total Dollars for each machine used on the job. If we see a cost center that looks unusually high or low we can drill down to an operation level to see if it was the makeready or run. If we identify the source we can drill down to a transaction level to see which employees worked on this job.

3. Actual vs Estimate Report

This report provides a comparison of the estimated hours and costs for all labor, material and purchases for the specific job to the actual costs.

This is a valuable report that can quickly identify actual costs that are not in line with your estimated costs. This could prove to be a one time exception that nothing could prevent or maybe it is a process that needs to be evaluated. If you are estimating a machine to run at 5000 / hr and it is actually running at 4000/hr you are losing money every time you win a quote. Conversely if it is running at 5000/hr and you are quoting 4000/hr you are losing jobs you should be winning.

4. Changes Report

When a job is complete you should be able to get a listing of all changes made to the job from the time you agreed to produce the job to the final product that was shipped to the customer. It is important to track these changes as you will need them to explain time and cost variances and also to help correct legitimate extra charges. Collecting extra charges can be a great source of additional revenue and by having a complete backup of information about the extra charge i.e. who, what where, why and when a change was made allows you to collect that extra charge without damaging the relationship with that customer.

5. Problem History

Provide your employees with a problem history system they can use to enter problems with jobs as they happen. When closing a job a list of its problems can be viewed. These problems may help explain some of the variations and issues on the job. This saves the time of office staff to track down employees and ask what happened 2-3 days ago.

Problem history is also very valuable when quoting or running this job in the future.

By following good closing procedures you can ensure that all costs are captured, all legitimate extra charges are recovered, all production variances are accounted for and all processes are running as efficiently as possible.

A good Job Closing Routine Opens Doors to Profits.

TRADE SHOWS AND CONFERENCES - KEEPING UP WITH TECHNOLOGY

2011-04-26T06:57:00.000-07:00

By Mark Porter

This issue will take a break from Information Technology and Management Concepts and will promote a busy month for Trade Shows and Conferences directed at our specific industries of Print Finishing, Binderies, Diemakers and Diecutters.

Trade Shows are always a great way to get out and see what is new in equipment and technology as well as attend seminars and network with fellow industry members.

IADD/FSEA ODYSSEY

In May we have the IADD/FSEA Odyssey show in Nashville, TN from May 4th-6th. This is a trade show format with plenty of industry specific vendors demonstrating the latest products. Plus there are seminars and a Tech Shop portion of the show to see live demonstrations of equipment.

Dienamic will be participating at this event in booth 801 and would look forward to meeting members of the Print Finishing, Diemaking and Diecutting Industries to discuss any of the topics we have covered in our blog over the last couple of years or demonstrate any of our software products such as our Industry specific Estimating System, MIS/ERP System, On-line Customer Inquiry System or our Software Tools such as Die Mgmt and BHR programs or our new Foil Calc App.

If you would like more information on this event please contact Dienamic or the IADD or FSEA

BIA - Mid Management Conference

At the end of May the Binding Industries Association (BIA) will be hosting its Mid Management Conference in Orlando FL from May 23rd to 25th. The format of this event is a conference with different speakers covering a wide range of Industry Specific topics. The BIA also provides table top displays for vendors to display and provide information on new products and services available to the Bindery Industry in a much more casual atmosphere.

Dienamic will have a table top display and would be happy to discuss any of the topics covered in our blog or our industry specific software solutions. For more information contact Dienamic or BIA

Which ever show you attend Dienamic would be happy to demonstrate the importance of the concepts we have discussed such as

Estimating and Selling are different functions

Profit = Sales - Cost if you don't know your costs how do you know your profits

Accountability on the Shop Floor can result in Big Profits

Customer profiling leads to Company profits

Doing more with Less

Focus leads to Greater Profitability

Profitability begins with quote

80% of Revenue comes from 20% of customers - lock those good customers in

ACCOUNTABILITY ON SHOP FLOOR LEADS TO PROFITABILITY IN THE OFFICE

2011-03-31T06:51:00.000-07:00

by Mark Porter

In any business knowing your costs is important. After all isn't Profit = Sales - Costs. If you don't know your costs how do you know your profits. Sure at the end of the year you can say I made money or I lost money but if you control your costs and use your cost data to make better business decisions you may not lose money and you may be able to say I made MORE money.

There are many benefits to a Job Costing System.

1. Capturing all costs incurred by a job for billing purposes
2. Analysis of Jobs to identify process or employee problems
3. Compare Estimate to Actual Values to ensure they are in sync
4. Production & Employee Analysis to ensure standards are met
5. Work In Process
6. Analyze time spent by all Employees and Machines
7. Payroll Benefits

Last and certainly not least ACCOUNTABILITY

I don't think it matters if you are the person sweeping the plant floors or the president of the company - if you have to account for every minute of your day and every material you use you will become more productive and less wasteful.

This can add up to tremendous savings. Lets say we get even a modest 5% increase in productivity and 5% decrease in waste. Extend that to the money that flows through your plant each year. On $2,000,000 dollars that is a $100,000 savings.

There are several methods to record time and materials in the plant and each method has different levels of accountability.

1. Employees simply writing their time on the back of the Job Bag provides little value either in costing the job or in accountability. The employee can simply place the time and materials he thinks you want to see. You have no way of knowng if the time he wrote down reflects the true time spent.

2. Employees manually writing out time sheets is a step closer because at least the employee has to account for his time within the structure of his day. But again if he knows he took way too long on a process he can factor it in over the course of a day.

3. Real Time Tracking is the most accurate and therefore profitable method. The employee simply enters that he is starting or finishing a process. the system keeps track of start and stop times in real time. The employee knows he can be held accountable for every minute of the day.
Real time tracking means that you can see the location of a job, the activity of a machine or the process an employee is doing at any time from any pc. Not only is the employee accountable for his time - it can be viewed at any time.

And accurate time collection leads to other benefits such as accurate analysis of employee and machine time. Job Costing provides many benefits, which we will look at in future articles, but accountability is a huge benefit that leads to greater profits which good for you and the employees.

PURCHASING - ANOTHER PIECE OF THE PROFIT PUZZLE

2011-02-28T07:05:00.000-08:00

By Mark Porter

All companies have to purchase both materials and services in their day to day activities. The levels of those purchases can vary from industry to industry and from company to company. Certainly the industries of Print Finishing, Trade Binding and Diemaking are more labor based then material based but purchases must still be made.

These days anytime money leaves your company it is vital that you have accountability for that money and confirmation that you received the value you expected for the funds.

Purchase Orders should be generated for all purchases. This includes items for specific jobs, materials for inventory, any outside labor services and general office purchases such as supplies.

Issuing purchase orders whether written or verbal is the same as writing a check from your company to the vendor . Whether your company makes many purchases or only a few each one represents money leaving your company that should be controled.

A Purchasing System should record every purchase order issued. This provides accountability of who is issuing purchase orders and where they are being sent to. By making people accountable for the purchase orders they issue you will ensure they are more careful with the purchases they make.

When goods or services are received they should be matched up to the original purchase order to ensure that you have received the full order, more than was ordered or if items are still to be received.

When the Vendor Invoice is received it should be matched up to the original purchase order to check that the prices on the invoice match the prices that were approved on the purchase order.

The Vendor Invoice should also be matched up to the receipt of goods to ensure that the vendor is not billing you for more goods than you actually received.

Our industries are so job based it is often a good idea to take a step back and view purchases by vendor and employees issuing POs.

By ensuring your company follows these procedures you can tighten your financial control of another aspect of your business to ensure you are maximizing the success of your company.

DASHBOARDS - CONSTANTLY SCANNING YOUR BUSINESS

2011-01-24T08:38:00.000-08:00

By Mark Porter

Your business generates a great deal of information but often there are key pieces of information that you use to monitor the pulse of the company.

The Dashboard of a car is a great analogy. There are many things going on in the operation of the car but the main pieces of information Gas, Speed, Oil Pressure and Temperature can be monitored and adjusted to ensure you get to your planned destination.

Different members of your staff will have different information needs. The President may be concerned with one set of data while the Plant Manager may need to focus on different data to ensure that he can perform his tasks to maximum efficiency.

Information Technology Dashboards save you tremendous time by automatically compiling and displaying key information from different modules on one screen and refreshing that information in a timely manner.

You eliminate the need to consult with multiple people to get data or to have to access and combine information fromseveral reports.

Information is always upto date and your access to it is never dependant on the availability of other people.

Data can be accessed from anywhere via gotomypc or your smartphone.

Now at any momement you may see a breakdown of estimates that have been done by Job Type. This can predict how busy you will be in the near future. If all the estimates you have done are for work we typically don't get then we must generate more business.

Listing of Jobs Opened. If we have opened 10 jobs but they are all Perfect Bound jobs we may be in to a overload situation that must be dealt with.

Hours booked against key pieces of equipment like the Perfect Binder or Bobst press.

Jobs Invoiced and their profitability.

Each Manager is different in their information needs but the information they need to make the best business decisions should be at their finger tips.

TURNING PROBLEMS TO POSITIVES

2010-12-20T07:24:00.001-08:00

By Mark Porter

As the old saying goes "When life gives you lemons make lemonade". This can be applied to the daily problems you encounter in your business.

Documenting and recording problems provides several benefits to your company and you can actually turn problems around to strengthen relationships with customers, vendors, employees and improve operating procedures.

Providing employees easy entry of information such as Job Number, Customer, Vendor, Employee, Department, Problem Type (Paper, MR, etc), Quantity effected, Problem Description, Problem Solution etc allows you to sort and analyze problems which can provide many benefits such as:

Don't Make The Same Mistake Twice
Becomes a Database of Problems and Solutions
Improve Relationships With Customer/Vendors/Employees
Documenting Problems Minimizes Damage

1. Don't Make The Same Mistake Twice

Another old saying goes "Your not stupid for making a mistake just for making the same mistake twice."

By recording problems against jobs you can be immediately notified when re quoting or rerunning that job of the issues incurred last time. At the estimate stage it allows you to re quote the job based on the previous information or at Order Entry you have the option to not proceed with the job if the customer is not willing to incur the extra costs this time around.

2. Becomes a Database of Problems and Solutions

Recording problems and solutions builds a knowledge base that can be accessed by employees in the future. By entering the problems with data such as department, problem type employee etc allows us to shorten the solution time to similar problems in the future.

Combine this with the ability to add video and images of the problems/solutions to the database and you can learn from your previous mistakes.

3. Improve Relationships With Customer/Vendors/Employees

Generate a list of problems you have with good customers each quarter and then discuss those issues and offer solutions with the customer. Continually refining the working relationship between your company and customers allows you to produce higher quality, better priced and better serviced products for them. This strengthens the bond with that customer ensuring it takes a bigger mistake or price difference for them to take their business elsewhere.

The same logic applies to vendors and employees. By discussing issues with people you strengthen the working relationships to the betterment of your company.

Trends can be seen with employees and certain operations. Say an employee is always having problems with MR a certain product. Additional training can be provided. Trends with Vendor materials continually causing problems can be identified and rectified.

4. Documenting Problems Minimizes Damage

If nothing else documenting problems can save money and relationships in the event of disputes. The more documentation you have the more you reinforce your position to the other party in a constructive and articulate way. This can reduce or eliminate your liability and open the possibility to future business.

So next time you make mistake make your company stronger for the experience

CASH IS KING

2010-11-30T08:15:00.000-08:00

By Mark Porter

Controlling your cash is vital in today's economy but you are probably also under staffed and over worked - a perfect combination that can lead to missing items that can greatly effect your cash flow.

Therefore it is vital that you have the check and balances built into your operations that will help avoid bad customers, missed charges, paying too much to vendors and maintaining cash flow.

We are not going to look at this topic from the accounting side. We will assume that everyone has an accounting system such as Quickbooks or Peachtree etc and is watching their aging process (the accounts not themselves). We will deal with the management side in this Blog.

Avoid Bad Customers: Debt from one Bad Customer can wipe out profit from a lot of Good Jobs so it is vital that you stay on top of COD and delinquent customers. These days this information can be continually changing and it is important that everyone is aware of a customer's status. There is nothing worse then shipping a job to a customer on COD before getting the money or calling a customer to tell them you are holding their job back only to find out they sent you a check earlier.

Allowing Management to make credit decisions on customers and to convey that decision immediately to other staff is very important. Management can simply flag a customer as COD or On Hold and immediately order entry people cannot open orders without a security password and shipping people cannot create packing slips without a security password.

Chargeable Changes: Profit margins on jobs are so thin these days that any extra work can turn a job from money maker to money loser. It is vital that you track your chargeable changes and collect them from your customer. Implement a system that will document all changes made to the order from the time you agree to do the job until you ship that job to the customer. The changes should be Date / Time / Employee and Reason stamped. Change Orders should be sent and immediately email notification to the customers of the changes. These changes should be immediately reflected on the invoice but allow for changes at that time.

If you keep record of every change and document the reasons for the changes you will collect your legitimate extra fees.

Start Your Aging As Soon As Possible: We all know that customers are going to take their time paying you whether that is 30, 60, 90, 120 days so the sooner you can start the clock the better. When you generate your physical invoice automatically email a pdf copy of it to your customer at the same time. This avoids any delay in mailing invoices and allows you to collect your money days earlier.

Customers will want your invoice asap so that they can bill their customers and keep their cash flow going. You may not get your money any sooner but you will become a more desirable vendor for them.

Don't Miss Any Jobs: Reduced staffs and hurried work schedules can lead to people doing things they forget about. Maybe a job is shipped and then your plant manager pulls the Job Bag to write something on it and then forgets to but it back in the billing file. Or maybe the job bag fell behind the shippers desk. The end result is a shipped job that isn't billed at all or billed at a much later date when it is found which is uncomfortable and embarrassing.

Run reports each Friday that provide a list of jobs shipped but not invoiced. Don't let any hard earned money slip through your fingers.

Don't Over Pay Purchases: Everyone makes mistakes including suppliers but you shouldn't have to pay for their mistakes. By issuing POs, recording receipts and entering Vendor Invoices you can be instantly flagged when the invoice price varies from the PO and the Quantity billed exceeds the Quantity received. You work hard for your money don't give it away to suppliers.

Other Production Tips There many other production ways to watch your cash but we covered those in our May Blog.

CUSTOMER PROFILING LEADS TO CUSTOMER PROFITS

2010-10-25T09:04:00.000-07:00

By Mark Porter

It has always been important to treat every customer as if they are your best customer. These days it is even more important that all customers are handled with the greatest of care.

There is no room for error because there is always another company down the street willing to pounce on your mistakes.

Great customer service does many good things

1. Avoid embarrassing Mistakes that lose Customers

2. Avoid re-doing work that costs you money

3. Avoid Production Delays that cost money and miss deadlines

4. Fends off competition that is willing to do a job for slightly less than your price.

The problem is that part of great customer service is knowing all the different details on how a customer likes to operate. What we call the Customer Profile.

This is often a knowledge base accumulated in a CSR or owner's head that cannot be easily dispersed to other members of your staff.

Samples of this type of information are:

Must have PO to Start Job

Must provide 2 samples to President

No Deliveries after 5pm, must use their truck

Dies for Bobst Press must use 3pt rule, Birch Board, Red Rhino Rubber

Never more than 35lbs per carton

Always Wrap skids

By making this knowledge base accessible to all staff members it means that Good Customer Service is not dependant on the availability of one person.

When a database of this knowledge or Customer Profile is accumulated it can be accessed by:

Estimating - Ensuring they have all details at the beginning of the estimate avoids embarrassing extra charges or worse additional costs you can't get back when the job is produced.

Order Entry - Access to the Customer Profile when a job is opened ensures production has a solid foundation to produce a profitable job. Changes to jobs once production begins leads to costs, production delays and missed deadlines.

Production - Production Employee access to the Customer Profile allows staff to make educated decisions on situations that occur in non office hours or when the CSR or owner are not available.

Administration - Office Staff can work with clients in terms of samples, deliveries invoices etc exactly as the customer demands.

Sales - Your knowledge base of customers can be a sales tool to gain more customers. When you do your plant tours and show prospects the equipment and employees that will produce their jobs, show a sample of the knowledge base and help support your claims of quality and customer service.

Companies find the Customer Profiling so important that the knowledge base is employee and date stamped whenever a change is made to it. This provides complete accountability to your customer service process.

Accumulating Customer Profile Information and making it accessible throughout your company leads to accumulating Customer Profits.

KNOWING WHATS NOT HAPPENING IS IMPORTANT TOO

2010-09-30T05:59:00.000-07:00

By Mark Porter

Information is obviously very valuable because it identifies what is happening in your business.

For example how many estimates did you do last month. What did it cost you to run that job. How much revenue was generated by different job types. etc.
But Information can also provide tremendous value by telling you what is not happening in your business.

We often call these Exception Reports. They identify things that didn't or aren't happening in your company and this can be invaluable information.

Lets look at some examples.

What if every Friday afternoon you could get a list of all jobs shipped last week but not billed. This information can be determined very quickly and avoids the potential situation of losing revenue or the embarassement of billing a customer much later when the mistake is evetually discovered.

You can also avoid the even more embarrassing situation of Jobs Billed but Not Shipped.

Another example of identifying things that are not happening in your business can be in the area of No Recent Estimates or No Recent jobs.

You can identify when a customer is starting to move his business to another supplier. The sooner your company can identify this trend the greater your chance of correcting the situation and gaining back the customer's confidence and revenue.

It is great to know what jobs were shipped today but it is just as important to know which jobs were scheduled to be shipped to day and weren't.

Won/Loss Estimate Reports not only tell you the customers and job types you are doing well with but also identify customers and job types that are fading and again allowing you to identify that trend as soon as possible so that you can take corrective action.

It is always good to know what goods you received today but it is tremendous value to know as soon as possible which goods didn't show up. Goods that didn't arrive on time threaten delivery times and throw off production schedules.

Knowing which employees on the first shift clocked in can be useful but the real value is identifying how many and which employees didn't clock in so that you can adjust the production schedule accordingly or call in more help.

It is great to know which dies were used but it is also good to know which dies have not been used in the last 2 years so that they can be destroyed or sent back to the customer.

So we can see that Information can bring tremendous benefits by telling you what is happening in your business but it can also bring tremendous benefit by telling you what is not happening in your business

DOING EVEN MORE WITH LESS

2010-08-25T09:52:00.000-07:00

By Mark Porter

Summer is winding down and hopefully we will be starting a busy fall season. My last issue dealt with Doing More With Less and this month we want to continue with the theme of using technology to increase productivity.

Many if not most companies have reduced their staffing and other resources in order to cope with the tough economic times but this has put them in a vulnerable position when sales have spiked. The nature of this downturn has also left companies reluctuant to add more staff and therefore struggling to cope through prolonged periods of increased sales until the recovery is well established.

This obviously results in reduced customer service and strained production resources just as we need them most.

Technology allows consistent levels of service and although requires upgrading the majority of its cost is a one time investment.

Last month we discussed the benefits an Estimating and Management Information System(MIS) can provide in helping you cope with strained customer service.

A MIS system is integrated meaning that data is entered once and transfered throughout the plant. An estimate is quickly turned into an order, an order to a packing slip and an invoice. No double entry - avoids mistakes.

A MIS System puts information at your finger tips. You can save hours each day by providing customers with instant answers rather than having to look up information and calling them back.

A MIS System provides instant communications between you and your employees and your company and your customers. This results in less mistakes and more efficient production. (Please see July Blog for full article)

What other technologies can be used to help companies with their reduced staffing? The internet can provide huge advantages.

1. On Line Inquiries

The internet can be used to increase communications with customers. Allowing customers to answer their own questions regarding their jobs frees up your staff to focus on producing the jobs. Provide a customer password protected access to the data specific to their jobs. Questions such as the following can be answered by customers themselves 24/7:

Has my job been shipped ?
What was I invoiced ?
Is my estimate ready ?
When did I last run this job ?

Carry this further and allow customers to pre open their own jobs, enter information on printed goods they are sending you and pre enter estimate specifications. This maximizes the time you are aware of jobs and allows you to make more productive decisions.

This type of 24/7 convenience and service increases customer loyality and ensures it will take a bigger price difference or bigger mistake for that customer to go elsewhere.

2. Remote Access

The internet also allows you to access your system from anywhere. Software such as gotomypc can allow you to operate your computer from any web browser as if you were in your office. I am sure you are all spending too much time at the office but still we can't afford to lose valuable hours. If you are at a customers, the airport or end up having some spare time you can be in your office immediately with services such as gotomypc. This can work on production computer such as CAD/CAM as well.

Dienamic uses gotomypc to service our clients and requires only 1 connection but in most cases our customers will have several gotomypc connections for their own uses shortly after the installation.

Other products such as gotomymeeting can also be excellent for training and webinars. Putting on webinars for your customers and prospects can be an excellent way to increase your exposure and direct business your way. It could also be used for quick proofing or inquiries without having to wait for customers to come to your plant or for you to take time to visit them.

3. Blackberries and iphones

Any email based phone allows you to access and respond to your messages immediately.

A text based phone results in delays getting your emails and forces you to respond from your computer which accessing can be time consuming.

4. Generate Sales from Websites, Blogs and Email Mail Blasts

There is no business if there is no sales.

Many Finishers, Binderies and Diemakers don't have sales staff so as production increases sales effort decreases. The internet can help provide additional exposure.

The use of websites, blogs and email blasts can help keep your company's name in front of your customers and prospects and provide valuable information that will enhance your prescence in the marketplace. This can often be done with minimal effort.

Technology is an affordable one time cost option that will allow you to maintain a consistent and reliable level of service until business is sufficient to re-evaluate your staffing needs.

DOING MORE WITH LESS

2010-07-30T06:09:00.000-07:00

By Mark Porter

As business picks up many companies, whether in the short term or permanently, need to be able to handle the increased workload with their reduced staffs.

A solid estimating and Management Information Software System can be of tremendous help with this.

There are many ways that each individual software module can bring benefits to your company but lets look at the major benefits of having an integrated system that can help you cope with the increased pressure of servicing your customers needs with reduced staffing.

An Integrated System

A software system is an integrated system. This means that data is entered once. Unlike manual systems where data is constantly re written from document to document. An integrated system transfers information automatically through the job processing routine.

This means that as you do the estimate you are creating the information for order entry, costing, shipping, invoicing and accounting.

Estimates that become jobs are simply retrieved at the Order entry stage and automatically converted into the Job Specifications. Some additions maybe required but the majority of the information is immediately prepared.

Special instructions or needs this customer has can be accessed from the customer profile and are placed on the order. Addresses can be selected directly from the customer file to ready the shipping documents. Estimated costs are transfered to the Invoice.

As the job proceeds through production job changes and additional charges are automatically appended to the invoice.

One time entry from Estimating to Accounting leads to efficiency and less mistakes both necesarry requirements during busy times.

Information at Your Finger Tips

Just think how much of your day is spent looking up information and getting back to customers. Probably several hours a day. An integrated Software system ensures that all the data you need to answer customer's questions has been entered and is easily accessible by you and your staff.

If a Customer calls and wants to know if their job is shipped simply click on the Packing Slip button and get a complete listing of all Packing Slips issued for that job. Was he Invoiced - Click on the Invoice Button and get a list of Invoices. Have you received his printed goods to start working on his job - click on the receipts button and see if his goods have arrived. The customer has a question about the job - click on the Electronic Order and see a copy of the Ticket on the Screen. Don't waste time finding documents, calling customers back and getting voice mail. Answer your customers questions immediately and save many hours each day.

Instant Communications

An integrated Management Information System provides instant communications with automatic email notification when events happen such as openning orders, changing orders, receiving customer goods, creating shipping documents, creating invoices, problems encountered and dies needing sharpening.

Instant communications with both your customers and your own staff decrease mistakes and make operations more efficient.

This can be carried as far as the internet by allowing your customers to check job status and even open their own orders via your web site 24/7. This further frees up your time to focus on job production.

There are many benefits to Management Information Systems but these 3 alone will allow you to service your increased workload with your existing staff.

FOCUS LEADS TO GREATER PROFITABILITY

2010-06-28T08:24:00.000-07:00

By Mark Porter

I was recently reading an article on the history of Estimating Software in the Printing Industry and found a very interesting fact that could benefit the Finishing/Binding and Diemaking Industries.

According to the NAQP (National Association of Quick Printers) in 2007 on average companies using estimating software reported $47,000 more in owner's compensation then those using manual estimating systems.

The estimating software forced the owners to look at their true costs of producing different jobs and this allowed them to identify and focus on the type of work they did most profitably.

I think this lesson can be applied to any job oriented manufacturing business whether it is printing, finishing, binding or diemaking.

The more you can focus your efforts and production resources on specific products the more profitable your business will be.

If you were to make a graph of all jobs you did in a given year and make the verticle bar PROFIT and the horizontal bar JOBS and then place a dot on the graph for each job based on its profitability the graph would propably look like this.

The dots above the horizontal line are profitable the ones below are not. We must minimize the types of jobs that fall below the line and maximize the type of jobs that appear above the line.

By identifying what distinguished the most profitable jobs the companies could try to replicate those conditions to get more and more of their jobs into this category.

Estimating not only helps you identify your true costs but it also allows you to analyze estimates to ensure you maintain your market advantages in the profitable products.

Won/Loss reports based on product type helps you monitor your valued markets against potential competition.

Won/Loss based on customers allow you to ensure that customers are staying happy with your service.

Daily listings of estimates to follow up ensures you don't lose any of your high profit jobs for stupid reasons.

Estimate listings by salesreps ensure that they are chasing the profitable work.

When I look at our customers the most successful ones are allways the ones with specific markets and product niches.

One of the most impressive things I have heard in an estimating department is "NO BID" because the quote did not fall into their desired product mix.

RISKY BUSINESS

2010-05-26T13:46:00.000-07:00

By Mark Porter

I was recently present at a Finisher's plant when a job went wrong and the management team gathered to add up the potential costs that could result from this mistake. It was freightening.

Before starting with the Post Press Industry some 13 years ago I was on the printing side of the business and although mistakes were obviously a concern the risk seemed less because the printer controlled almost all costs - material and labor.

Even to the point that on the rare occassions when the printers were asked to print on customer supplied paper the printer would always add some cost per C.Wt or per M.Sheets to cover his risk.

The post press industry, as you are well aware, is a different story. Last in the production processes, extremely tight deadlines and handling jobs that can already have tens of thousands of dollars of materials and labor invested in them. The post press company could be adding a service worth a minimum amount to a job of tremendous value. If that jobs goes wrong the finisher must replace the entire job.

Obviously post press companies have developed checks and balances that prevent alot of mistakes - plus I have meet several of the most detail oriented people ever in this industry but what else can we do to lessen risk.

1. Cover Risk

Estimating - should account for jobs of extrardinary risk. Should the sell value to drill a simple 8 pp self cover black and white book on 80lb text be the same as an 8 page 6 color book on very expensive paper. Probably not.

2. Increase Communications

The greater the communications between employees and customers the lesser the chance of mistakes. Tools such as:

Customer Profiles - Record all aspects of how customers want there jobs produced and provide 24/7 access to this information to all employees.

Electronic Orders - Information is always instantly distributed to all employees and you don't have to worry about employees working from old information.

Detailed Job Notes - Electronically attached to the Job Bag these allow you to describe every form to ensure proper production.

Problem History - Describe problems and solutions previously experienced with jobs. If a job is rerun then be automatically notified of problems you had last time.

Emails - Constant and instant communication between the customer and your employees will ensure that jobs are produced correctly.

Order Confirmation - Confirms specs of jobs that were entered into Order Entry and emailed to customer to shift responsibility back to customer.

Job Changes - are documented and distributed instantly to your customer and plant employees to increase quality and reduce mistakes.

3. Maximize Production Time with Each Job

Many mistakes happen when things are rushed. The more time we can have with a job in our possesion the less chance of Production mistakes. A super critical job can be run on the day shift rather than the afternoon shift to meet the deadline.

Received Goods Notification - As soon as goods are received at your receiving dock production is notified. There is no loss of time.

Check counts and quality of sheets received. Don't get blamed for short counts or damaged sheets that could result in you having to reprint part of the job.

Die Management - can warn you if dies need sharpening before the job gets to production. No longer does a job have to wait while a die is being re tooled or does a job have to be removed from a press half way through a production run because the die needs retooling.

Post Press companies will always take on risk - it is the nature of the business but are you doing everything possible to limit this risk.

ESTIMATING ONLY HALF THE BATTLE

2010-04-30T08:16:00.000-07:00

By Mark Porter

Print Finishers, Trade Binderies and Diemakers are all Job Oriented Manufacturing Industries. This means that instead of producing goods and then trying to sell them like a car company we must constantly find work to produce. Every job is different and it is the estimate that brings the work into our plants.

Also unlike a car company that knows all its costs before pricing the car to make a profit we must estimate our costs, produce the job and then measure the profit we make.

Therefore simply estimating the job is only half the battle. After the job is complete we should be analyzing the actual costs in comparison to our estimated costs.

The comparisons should be available on an operation level i.e. makeready, run, cleanup, waiting time etc. and should also be evaluated on both an hourly and cost basis.

You will want to account for fixed and variable costs so that you can adjust your estimated values for the actual quantity run. Our industry constantly estimates for one quantity say 10,000 and ends up running 10,500. It is not much value in comparing estimated values for 10,000 and actual values for 10,500. By expanding variable costs to the actual quantities to created adjusted values we can compare apples to apples.

Any significant variations between our estimated and actual values should be investigated and the reasons determined. Was the variance due to some unique features of the job or is the variation due to a more systematic problem that should be corrected.

By constantly monitoring our estimated and actual values we can ensure that are estimates accurately reflect what we achieve on the shop floor.

This is vital because if we are estimating a machine to run at 5000 per hour but the machine is actually running at 4000 per hour this means you are losing money on every job you win. Conversely if we are estimating the machine at 4000 per hour but we are actually running the machine at 5000 per hour we are losing jobs we could produce profitably.

So you can see estimating is only half the battle.

Click here to see Actual vs Estimate Report

INCREASE PROFITABILITY COMING AND GOING

2010-03-25T10:34:00.000-07:00

By Mark Porter

The Shipping/Receiving Department in any Bindery or Finisher is a very busy place. Shipments to customers, receipts of printed materials from customers and dies and foils or binding materials from vendors. Delays in any of these activities can cause us to miss deadlines or incur overtime to make up for late items.The better we can manage our shipments and receipts the more profitable our business will be.

Time is critical to Finishers/Binderies. We are last in the production cycle and any slack in the schedule is usually long gone by the time the job reaches us. Any increase in the time we have with the job provides flexibility to deal with it to our advantage.

We can increase our time with jobs several ways.

1. Have an option to generate Shipping documentation with your customers logos on it so you can ship direct to the end user and have it still look like it is coming from the printer. Simply load Company logo files into your customer database. This can provide extra time for you or also help you save the printer's butt by managing to make their customer's delivery date.

2. Tag COD accounts so that shipments for that customer require a supervisor password to generate paperwork. This may not save time but it will lessen the risk of bad debts.

3. Provide Instant E mail notification to our employees and the employees of the printer as soon as items arrive at the shipping dock. This ensures that we as the Finisher/Bindery don't waste any valuable production time simply because we are unaware that goods have been delivered. It also notifies the printer of the exact time you received the goods so there are no unrealistic expectations of delivery based on their assumption of when the goods were delivered.
This also works well with vendors. If we are waiting for a die or spines to be delivered to begin production we will again be notified via an automatic email as soon as the goods are received at the shipping door.

An electronic Receiving log is automatically updated and can be accessed by anyone to ensure all employees are informed.

4. But the best way to maximize our scheduling time is to know about jobs before they arrive. By providing your best customers with internet capabilities to log in materials they are shipping to you maximizes lead time on orders and gives provides them with priority scheduling. The customer can enter items to be shipped, shipping method, estimated time of arrival and comments. You are instantly made aware of those materials and you and the printer will be automatically notified if they have not arrived by the estimated time. When the goods do arrive they can be quickly matched to the predelivery transaction and any comments such as damage or short quantity can be immediately conveyed back to the printer.

This not only maximizes your time with jobs thus allowing you maximium flexibilty in your production schedule but it makes it much more convenient for printers to deal with your company. You start to become a partner to that printer not just another vendor.

PROFITABILITY BEGINS WITH THE QUOTE

2010-02-28T07:23:00.000-08:00

By Mark Porter

Communications with a customer is vital to the success and profitability of any job and that communications begins before you get the job and even before you get the PO. Communication for the success of a job begins with the estimate.

The communication from the customer regarding the specifications of the job starts the process and is obviously very important but the key interaction between you and your customer, that often determines the success of a job, is your presentation of the quote.

I have seen many methods of presenting prices to customers that range from simply writing the price on the original specifications received from the customer and faxing it back to very detailed letters with bold and underlined references.

The reality is that the more detail the better. Any room for misunderstanding can be interpeted by customers intentially or unintentially in a manner that results in a damaged relationship with your customer and/or you spending more money on the job then you intended.

A good quote will

1. Present a Professional Image

A good quote should present a professional image to your customer. A price scribbled on a fax not only reflects negatively on the quality standards of your company but can also provide second thoughts to your customer on large jobs.
The print/packaging estimator has to consider his accountability should this job go wrong. I price scribbled on paper will not put him in good standing to his boss when he tries to justify his decisions. Nor will it invoke confidence to entrust your company with a valuable project.

2. Clearly define the job you are providing

A good quote will clearly define the components of the job. The number of pages, bind type, fold/glue configuration, color of foil, type of rule etc. There should be no misunderstanding of the exact product you are delivering.

3. Clearly define the services you are providing

A good quote will clearly define the services you are providing for the cost presented. This is very important as it will provide an opportunity to requote if you mis understood the job and included or left out certain processes.

4. Clearly State What is expected from Customer

The quote should also clearly state what is expected from the customer. If you are assuming that the customer is providing certain materials and providing those materials in certain ways by placing this information on the quote the customer can confirm or deny those assumptions before the job begins.

5. Allow for Special Instructions

Your quote should contain any special instructions or requirements you have for certain jobs. Ideally these instructions should be initiated when certain processes are selected from the estimate, allow you to pick from a list of common special instructions and type in specific instructions for unique jobs.

6. Present Pricing as Requested

Don't make your customer work to get the pricing he wants. If he wants certain processes broken out or he wants an each price instead of per M you should provide the quotation in that format.

7. Original Date

Clearly indicate the date this quote was origianlly provided so that your 30/60 day validation period cannot be extended.

8. The Quote should be Generated Automatically

Taking time to rewrite the estimate numbers into a format to present to the customer takes valuable time and represents potential errors from transposition and ommission mistakes. The quote should be automatically generated from the estimate.

9. Deliver Quote in Requested Format

If your customer want their quotes emailed and you fax it you are starting the process in a negative manner. Your quotes should be deliverable quickly and easily in the manner specific to each customer.

10. Track Quotes for Follow up and Analysis

Track desirable quotes to ensure you don't lose them for stupid reasons like " we gave you a big job 2 days ago we didn't think you could handle this as well", " we didn't think you could perform that process" or " I seem to have lost your quote".
Analyze estimates for won/loss, customer activity and much more valuable information

PRODUCTIVITY: SOMETIMES HUGH SAVINGS ARE RIGHT UNDER YOUR NOSE

2010-01-25T10:02:00.000-08:00

By Mark Porter

A new year and companies are continuing to look for ways to increase productivity and decrease costs. There are many ways to increase productivity and decrease waste which we will discuss in various issues this year.

1. Accountability
2. Inter Company Communications
3. Customer Communications
4. Access to Information

One of the best ways to maximize peoples producttivity and minimize waste is to demand accountability from all employees.

It does not matter if you are the President of the company or the floor sweeper - if you have to account for every minute of your day and every material you use you will be more efficient and less wasteful.

If accountability produces even a small 5% increase in productivity and decrease in waste this can add up to some very large savings.

Lets look at your shop floor - by far the greatest costs are incurred here. Depending on the size of your business your plant will expend millions of dollars in labor and material. If we took a plant that processes $2 million of costs per year then even that small 5% productivity gain will result in $100,000 of savings.

How do you achieve accountability ?

First employees must record their activity throughout the day. Whether that is by writing it on a time sheet or bar coding into shop data sharing stations. They must record the start and stop time for each activity they perform from the time they clock in until they clock out for the day. This is not just job based activities but all activities - doing a makeready, running a job, waiting for an ok, maintenace of a machine or no work. They can also record materials used at this time as well.

An employee writing their time on the back of a job bag is not sufficient. You are not making the employees accountable because you can not piece together a time sheet accounting for evey minute from clocking in to clocking out for the day.

Depending on your method of collecting the data - you can analyze it many ways.

It maybe enough for you to review each employees time sheet to ensure that makeready and run times look right.

You may want to calculate % efficiency of each machine and each employee and compare it to standards you expect to achieve or compare on an employee by employee basis to evaluate which employees need more training.

You may want to compare your estimate vs actual costs on each job to identify problems.

You may want to evaluate your % Chargable time to Non Chargable time on an employee by employee basis. If an employee has less than say 75% chargable time we have to take action.

You may want to note that your makeready or repair time is increasing on certain machines and those machines are becoming less efficient.

Accountability can be a powerful tool but Management must be 100% behind it. Like punching in and punching out - if employees don't do it they don't get paid. Management must take the same approach with time collection, with ALL employees, or it will not work.

But getting it to work can provide tremendous savings.

MORE ACCURATE STANDARDS LEAD TO GREATER PROFITS

2009-12-14T09:53:00.000-08:00

By Mark Porter

Often standards that are used in post press industry estimating are developed for the sake of expediency. It is vital that customers get their quotes quickly and therefore in order to meet that need owners and estimators have taken their knowledge and condensed it into simplier factors.

This is seen in many processes when standards such as $3 per M are applied or if the cost for running the process includes material. An example is laminating where say the cost of $125 per M includes the laminate.

This may get the price to your customer quickly but does it maximize your chances of making money on the job or minimize your risk of losing the job because your price is too high.
If your method of estimating does not allow you to take into account different conditions and materials then you maybe getting the pricing to your customer quickly but you are greatly reducing your chances of maximizing your profits.

Let's look at a couple of examples to see how changes in conditions or materials can dramatically change the price of a quote.

Last issue we talked about estimating cutting and we used the example of cutting sheets of 60lb and 100lb paper. (Please see the November issue of our Blog)

Lets say that we had settled on a price of $12 per M sheets cut because we didn't have time to look up calipers, calculates sheets per lift, number of cuts etc. On our 5000 sheets cut 2 out we would have gotten 5 x $12 per M or $60. As per our example though the 60lb stock would have cacluated to $50 and the 100lb stock would have been $75. This is a $10 to $15 dollar swing on 5000 or a $100 to $150 swing on 50000. The variances get greater with thicker and thinner stocks and based on the number of peces cut out.

Lets look at a laminating example where material is included in the running price. On a 10000 sheet run of a 19x25 sheet at $125 per M we would calculate $1250.

But the laminate material could vary from 1.2mil Gloss Polyproplene at $.065 per MSI to 1.2mil Matte Polyester at $.300 per MSI. The cost difference is significant.

If we say the labor cost is 10000 shts / 2000 speed = 5 hours x $100 / hr that is $500 in labor plus our material cost for 1.2mil gloss polyproplene is $309 (19x25x10000/1000x$.065) and the 1.2mil matte polyester is $1425 (19x25x10000/1000x$.300).

This now gives us a swing of $1250 - $ 809(500+309) = $441 limiting our chance to get the job or $1250 - $1925(500+1425) = $675 in loss on the job.

The more accurate your standards the better your chances are of maximizing profitability. If your estimating method compromises profits for the sake of speed you should examine your estimating metods.

ESTIMATING: CUTTING TO THE TRUTH ABOUT - CUTTING

2009-11-28T07:52:00.000-08:00

By Mark Porter

Over the years I have talked to hundreds of Finishers and Binderies about estimating and they all have some method of calculating the time and materials for the various processes found in our industry. Diecutting, Folding/Gluing, Saddle Stitching - they all have theories and logic on the calculations of these processes. But Cutting seems to mystify the majority of companies in the Post Press Industry.

It is an important calculation as you as an industry do a great deal of cutting. You cut sheets that are supplied by the printer larger then you want deal with. For example the printer supplies the sheet 25x38 2up but the first thing you do is cut the sheet to 19x25 1 up. You have to cut board and liner if you perform mounting (Laminating to companies on the West Coast). You cut products in the middle of production runs and if you are a casebinding operations you can cut endleaves and cloth for hard cover books. The materials you cut range in size, thickness, weight and coating. These different factors require more then a $3/M or 4000 sheets per hour type calculations that most post press companies apply.

What calculations can take into account all these factors. I have always looked at cutting as it is done out in the plant. First the operatior takes a lift of paper. The size of that lift will start to determine many of the cutting calculations. The typical lift of paper is 3 to 5 inches for the sake of this example lets assume a 3 inch lift. Next I need the thickness of the sheet I am lifting. This thickness would be based on the sheet of paper I am working with. I must also be aware that if I am cutting a mounted sheet (laminate for our West Coast readers) I would combine the thickness of the paper and the board and maybe the liner if there is any.

For the example lets keep it simple and say we are cutting a 60lb 25x38 Gloss Coated Book which has a caliper of .003. This means that with a 3 inch lift I can get 1000 sheets per lift. But I may want to consider the weight of that lift. A 1000 sheets of 35x38 60lb Gloss Coated paper is 120lbs. Can your cutter operator handle that. If not we may want to consider a maximium weight that can be lifted say 60lbs.

Therefore to date we know we have

5,000 supplied sheets / 1000 sheets/lift * 120lbs (lift wt)/60lbs (max wt) = 10 lifts

We are getting 2 out of the supplied sheet - we may determine that we need 5 cuts (1 each side and 1 to split the sheet ) so we have 50 cuts total. You may want to consider a helper if you have more then say 6 out.

If you have a programmable cutter you may want a certain makeready to setup the program lets say 5 minutes setup + 2 minutes programming per cut. (15 mins)

Plus you will need time for each lift of paper lets say 1 minute to grap, jog and place in cutter (10 min) and time for each cut lets say 30 secs (25 min).

Our calcuation is

Makeready 5 minutes + 5 cuts * 2min = 15min

Lifts are 10 lifts * 1 minute = 10min

Cuts 10 lifts * 5 cuts = 50cuts * .5min = 25mins

Total Time 50mins

Hourly Rate @ $60/Hr =$49.99

If we quoted a 100lb Coated Book Gloss (.005) our calculations would have changed to

5000 shts / (3in lift / .005 = 600 sheets per lift) * each lift would be 120lbs / 60lb limit = 2 is 17 lifts * 5 cuts per lift is 85 cuts so our cost for the 100lb stock is

Makeready 5 minutes + 5 cuts * 2min = 15min

Lifts are 17 lifts * 1 minute =17min

Cuts 17 lifts * 5 cuts = 85cuts * .5min = 42.5mins

Total Time 74.5mins

Hourly Rate @ $60/Hr =$74.49

By placing information like paper calipers, maximum handling weights, pile heights based on sheet sizes, cutter programming times, times per lift and times per cut in a program you can get an accurate cutting time every quote instead of questimates that may end up costing you money.

CHARGABLE EXTRAS - A SIGNIFICANT REVENUE STREAM

2009-10-30T08:14:00.000-07:00

By Mark Porter
When was the last time you produced a job without any changes ? Are you capturing the revenues for these legitimate extra charges or are they falling through the cracks ?. If not more revenue then at least avoid costs. If a job is changed during production and you did not collect the extra revenue for it then you propably incurred more cost.

Finishers/Binderies provide quotes for customers and customers submit orders. The normal process is to ensure that the job submited and the quote provided are significantly similar that you can approve the production of the job. Once that approval has been given any customer driven changes to the order should be chargable. But how do you track these changes and bill your customer so that they feel compelled to pay but more importantly allow you to collect the charges without damaging your relationship with that customer.

You must follow a procedure to record all changes to jobs, chargable and non chargable, to ensure that that nothing falls between the cracks and is forgotten. But just recording changes will not allow you to collect your legitimate extra charges. The changes must be documented as to date, time, employee and reason the changes were made to provide the maximum support for your claims.

Documentation is not enough. The changes must be communicated to the customer at the time they are requested. The changes must be recorded as having been submited in writing to the customer, warned that they were chargable and that a price was quoted.
When the job is completed a full listing of all changes should be supplied to your employee in charge of invoicing. They can then decide which charges should be accepted, changed or deleted . The invoicing decisions are determined and the invoice is submited to your customer. If the customer questions these extra charges you can support your claims by providing the customer with the who, what where, why and costs details.

Hopefully your customer will start to provide you with better information when the jobs are first submited. Either way your company is in a better position because you are either collecting legitimate extra charges or avoiding the additional costs of providing those changes without charging for them.

Brief Job Changes Mgmt On-line Demo

ESTIMATING:VALUABLE NUMBERS TO YOUR CUSTOMERS ... AND YOU!

2009-09-23T10:32:00.000-07:00

By Mark Porter

When your customers require a quote you take the time to calculate an estimate that they can use to make decisions regarding their company but you are also generating numbers that can be valuable to your company.

Everytime you generate an estimate you can be tracking numbers that can provide your own company with valuable information that can predict future work and predict future trends.

By reviewing and analyzing your estimates you can find desirable jobs, future business, changes in market conditions and monitor your customer base.

Every week you should review the estimates that you generated. Look for desirable jobs that you can follow-up. Whether it is a quantity level or a price level - flag these jobs and follow up these estimates to ensure you don't lose the order for a bad reason.

All companies have a won\loss ratio for the estimates they do. If you monitor the number of estimates you do each week it can be a predictor of how busy you will be in the future.

All companies specialize in and perform different types of work at different levels of success. Tracking estimates each week by job type can further strengthen your predictions of production levels in the future. If 80% of your estimates last week were for work you typically don't get - you may have a production slow down in the near future if you don't increase your sales effort now.

Won / Loss ratios should be monitored for Customers, Job Types and Sales people. Tracking your won / loss statistics can provide important information such as who are your best customers. Tracking won/loss by Job Type can indicate where your company excels. A shrinking won / loss ratio for a product you typically do well on could indicate a competitor is reducing their pricing.

Won / Loss ratios by Salesperson can indicate if the salerep is targeting their efforts on the type of work your company does well.

Tracking estimate activity can not only tell you who is giving you estimates but also who is not. This is especially true for your good customers. Monitoring information such as no recent estimates can indicate if a customer is starting to shift work to another finisher / binder and provide you time to try to correct the situation. This is especially true of your good customers. 80% of revenue comes from 20% of customers - you must stay on top of these good customers.

Finally ask questions like when will this job be awarded and then track estimates each day. Find the desirable estimates each day and stay on top of these quotes. Don't lose highly valuable jobs because the printer didn't think you had the capabilities or capacity or simply lost your quote behind his desk.

80% OF REVENUES COME FROM 20% OF CUSTOMERS

2009-08-24T08:01:00.000-07:00

By Mark Porter

In most businesses the majority of sales come from a minority of customers. It is vital that businesses service these good accounts to the best of their ability and tracks these customers so they can know immediately if the customer is becoming dissatisfied with the company or its products and services.

We often use the 80/20 rule - that 80% of revenue comes from 20% of customers but I was talking to one owner recently that stated 90% of his business came from 10% of his customers.

The loss of one of these customers can be a big blow to a company so it is vital that you do everything possible to manage these accounts.

First you must identify these accounts - which most people can do through their sales records. Once you identify these customers you must make the process of working with your company so easy that it will take a major price difference or a major mistake for them to take their business elsewhere.

This can begin with convenience. Providing information such as Was my job shipped ?, What quantity did we order last time ?, Are my samples ready ? 24/7 allows the customer to work on his timetable and saves him and you a great deal of time. The internet is excellent for this.

Building customer profiles of the exact needs of each customer ensures work is done correctly every job and saves time looking for information. Problem Histories can be pulled and discussed with the customer on a monthly, quarterly basis to build relationships and ensure future jobs are run smoothly.

Provide email updates when events happen in your plant that effects these customers, Keeping customers fully informed builds relationships and reduces problems.

Monitoring customers requests for estimates and orders can ensure that you are notified of a customers growing dissatisafaction before it is too late to salavage the relationship. If you normally get 20 estimates a month from a customer and you only received 5 last month -get on the phone and find out why.

And we always want to add more good accounts so monitor Won/Loss estimate records or Jobs per month. There may be a customer whose sales volume is not sufficient to get your attention yet but maybe their won/loss record is high, their jobs are large run and we get a decent markup on their jobs. - cultivate that account and they may become part of your 80/20 group.

BRIEF ONLINE CUSTOMER INQUIRY DEMO

IF YOU DON'T KNOW YOUR COSTS HOW DO YOU KNOW YOUR PROFIT

2009-07-19T05:33:00.000-07:00

By Mark Porter

In our last issue we discussed the concept that Selling and Estimating are two different functions. We outlined the idea that it is vital that all Print Finishers know their true costs so they can make more educated selling decisions. True costs have two components - the machine speeds and makeready times and the true costs of the production assets to produce the work. Most Post Press Companies have a very good idea of the speeds and Makeready times that their production assets can obtain. Where most post press companies are weak is in determing the true cost of those assests on an hourly basis.

Direct Material and Direct Labor costs are easy to identify but how much of your monthly rent and telephone bill should be applied to each job. Because the post press industry is a job oriented manufacturing business, meaning every job is different, we must have a predetermined Budgeted Hourly Rate(BHR) with the proper allocation of factory and administrative overheads that can be applied to all jobs.

You should have all the information readily available that is required to determine your BHRs. Employees wages and benefits, which equipment they operate, what you paid for equipment, the square footage the machine occupies on the factory floor your factory overheads and administrative overheads. Once you have this data your accountant or software can apply proper accounting principles and graphic arts ratios to calculate accurate hourly cost rates.

Having accurate and current BHR's is the first step to generating higher profits. These rates reflect the all-inclusive or fully absorbed costs of doing business, and should be adjusted as events unfold which may change the costs of operating the business. Buying or selling equipment, working different productivity levels, giving raises or changing shifts are afew examples of events that can affect the true cost per hour of your production assets.

Providing your clients with prices that are guaranteed to generate profits is only possible when all of your full operational costs are reflected in your pricing.

Dienamic can offer budgeted hourly rate software specifically for the post press marketplace. If you would like a basic demo please click on the link below.

BRIEF BHR DEMO

ESTIMATING AND SELLING ARE TWO DIFFERENT FUNCTIONS

2009-06-16T06:22:00.001-07:00

By Mark Porter

This is probably the most misunderstood concept I have experienced in the Finishing/Binding Industry. Too many companies do an estimate by calculating each operation and then simply adding up the numbers. There is no addition of markup at the bottom. This signifies that they do not practice the concepts of cost accounting that are vital to any job oriented manufacturing business of which the post press industry belongs.

When I first bring up the concept that Estimating & Selling are two different functions most companies respond that the market dictates the selling price. This is 100% true but the market does not dictate your cost to produce the job and it certainly does not stop you from evaluating if this job, at the market price, covers your costs and generates a desirable return.

The estimating process should use the production standards that you have determined through time studies and experience. The times should then be multiplied by hourly cost rates that accurately reflect the cost of running the machine per hour. These rates are called Budgeted Hourly Rates (BHR) and they encompass financing charges, labor costs, miscellaneous materials and an allocation of overheads. Assumptions are made on the number of shifts and productivity levels that will be obtained and now you have an accurate cost per hour to operate each piece of equipment.

When these hourly rates are applied to the production standards determined you now have an accurate representation of how much the proposed job will cost. You can now evaluate the risk and desired return and markup the estimate accordingly to determine the selling price.

If the market will not bear your desired price you now have all the data required to evaluate at what market price you are unwilling or unable to bid on this job. There may even be times when you will bid on work that is below cost - BUT YOU WILL KNOW YOU ARE BELOW COST.

Once the time standards and Budgeted Hourly Rates are in place it is vital that all companies monitor their production processes to ensure they are staying at the production standards that estimating is using. This is done through the constant monitoring of production factors such as labor and machine time and the constant comparison of estimate and actual calculations.

The results will provide valuable data for you to manage your business in a more profitable manner.

NEWS FROM THE SHOW

2009-05-18T05:15:00.000-07:00

NEWS FROM THE SHOW

May 4th - 8th was a busy week as we were involved in 2 shows that were directed specifically at the 3 markets of Print Finishing, Trade Binderies and Diemakers that we serve. This would normally be a great opportunity for us as both the BIA Mid Management and the IADD/FSEA Odyssey shows have been tremendous in the past but this year the attendance and activity for our booth were both down.

I suspect these events are planned well ahead of time but in the future it would be great if they could be spaced out a little more as we missed the last day of the BIA conference to get to the Odyssey show. I do not think that we are the only vendor that has customers in both the Binding and Finishing industries. My understanding is that the BIA and the FSEA will be working more closely together in the future.

These two shows are different formats but both can be a tremendous benefit to members of these three industries. Both shows offer networking, education sessions and opportunities to see products and services directed at your needs.

We started at Ceaser's Palace in Las Vegas for the BIA Mid Management Conference where we had a table top display during selected portions of the conference. This allows many opportunities for people attending the show to get information about our company and learn what products and services we can offer. It also allows us to meet current customers and discuss any matters they have. The conference is done in conjunction with the PIA and in the past there was much more separation of the Printers and Binders. This year many of the functions were combined and that seemed to have a negative effect on the display area. We did meet several customers and discussed several items.

It was then off to the IADD/FSEA Odyssey show in Atlanta. This is a true trade show with educational sessions and a Tech Shop area as well as networking events available. Again attendance at our booth was down but we did meet several customers and discussed several issues.

The main topic that came out of both shows was that customers get the Dienamic Software working to perform the functions they need but they soon forget the many other benefits the software can bring. Too many customers asked if the software had features they did not realize were already available. Especially these days - people are looking for any advantage they can get in monitoring costs, increasing productivity, identifying trends or providing customer service advantages over the competition.

We took these customers through the software reminding them of the features available. We also discussed the importance of an implementation plan to get their staff using the additional features. People in general don't like change or extra work so it is vital that management be committed to getting the benefits from the software so they will ensure that staff members use it.

If you would like to setup a review of the benefits you should be receiving from your Dienamic software please call and we would be happy to set up an on-line session.

Dienamic was also demonstrating its on-line customer inquiry module. This is a new module that would allow you to offer your customers the ultimate in convenience. Based on the 80/20 rule that 80% of revenue comes from 20% of clients - the more you can do to lock those good clients into your company the better. The best way to do this is to make it tremendously more convenient to deal with your company then any other. In this way it takes a bigger price difference or a bigger mistake for them to go elsewhwere. If you would like a demo of this new module please call. We are offering price breaks to the first few users as an introductory offer. See video below.