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

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 determining the true cost of those assets 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 a few 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 to the right.

ONLY GOOD DELIVERY IS AN ON TIME DELIVERY

Post Press companies and Die Making companies work under tremendous time restraints and deadlines. Post Press companies are the last in the Production Processes and are ususally the final stages before delivery to the customer. Diemakers provide dies to very expensive presses that when sitting idle waiting for a die are costing the company a great deal of money and leading to potential production delays. We are all constantly racing against the clock to meet the next deadline.

Software and Systems provide many ways in keeping delivery dates on time and ensuring customers are happy.

 

 

1. Customer Profiles

 

 

Mistakes result in additional costs and missed deadlines.

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.

 

 

2. Customer Logos

 

 

Anything that can save time can help you meet a deadline. If you can ship direct to the end user by-passing the shipping back to the printer you can save time. To ensure that the delivery looks like it is coming from the printer you can place the Printer's logo on your packing documents. This can save on time deliveries resulting from your mistake or the printers mistake.

 

 

3. Communications

 

 

As with most problems or situations - communications is key to keeping the situation under control. Systems can provide key employees with information updates that ensure nothing is missed or falls behind. Systems automatically generating emails when

 

A. Jobs are opened - this ensures that the customer is made aware of your understanding of the specifications and requirements of the job so we base our delivery on correct information.

 

B. Jobs are changed - Any change from the original specifications can cause possible missed deadlines. Ensure all key employees within your own organization and your customers are made aware of changes and their effect on the delivery date.

 

C. Goods are Received - To meet tight deadlines there can be no wasted time. The delivery of printed sheets or punches that are simply taken off the truck and placed on the shop floor represents the loss of valuable production time. Systems that notify key employees as soon as goods enter your company can keep jobs on track.

 

D. Goods are Shipped or are Ready to be Shipped. Notify your staff and the customers the minute a job is ready for shipment.

 

E. Display Expectations on documents. For example on your job ticket display the hours you have allowed for each process. If you estimated a 1.00 hr makeready and 4.50 hours in running time let the production employees know this so they can be aware if they are exceeding the requirements

 

 

4. 24/7 Customer Service

 

 

Using the internet you can provide customers with 24/7 access to your company. This allows customers to do many things themselves to ensure on time deliveries.

 

A. Check Job Statuses - At any time the customer can see the status of their job so that they can make decisions for themselves 24/7.

 

B. Pre Open jobs themselves. If it is 9pm and the printer is finalizing a job they coulr pre open that job so that you are made aware of that job and receiving specs to begin work immediately and this can provide valuable extra hours to meet a tight deadline.

 

C. Customers can pre enter materials bein sent to you. Even saving the 1-2 hours of time between the time the customer loads the materials on his truck and they are delivered to your door can allow you to make better production decisions to meet a customers delivery.

 

 

5. On Going Customer and Employee Educaton

 

 

Constantly educating your customers and employees as to the ways to best produce work in the fastest most economical way can help you meet more deadlines. By monitoring problems by job, customer, employee, process, vendor etc you can identify constant or potential road blocks to an on time delivery. By recording these issues you can sit down with the customer, employee, vendor or plant manager and discuss issues and how to rectify them

 

 

6. Monitoring Actual vs Estimate

 

 

It is vital that you are aware of the actual production standards that you are achieving on the shop floor and applying them to your estimating process. If you are estimating a process at 5000 per hour but are only achieving 4000 per hour on the shop floor then your schedule is off as soon as you win the job.

 

 

7. Accountability on the Shop Floor

 

 

By tracking employees time, both chargable and non chargable, and the materials they use you are demanding accountability on the shop floor. The minute a person as to be accountable whether it is the President or the Floor Sweeper they will be more productive. More productive employees will get jobs done quicker and with higher quality.

 

 

8. Monitor Success

 

 

Track on time deliveries and analyze the results daily, weekly, monthly. Use the other tools listed above to find out why deadlines were missed and take the appropriate actions.

 

 

Following these steps will help keep your company on track for a reputation of on-time deliveries.

QUALITY - YOU ARE ONLY AS GOOD AS YOUR LAST JOB

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.

CASH IS KING

Controlling your cash is vital in todays 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

Chargeable Changes

Start Your Aging As Soon As Possible

Don't Miss Any Jobs (Shipped Not Invoiced)

Don't Over Pay Suppliers

Other Production Tips

 

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.

SCANNING YOUR COMPANY FOR SAVINGS

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 and other Material 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.


Append Images in one PDF


You can add many images into 1 PDF file so that you do not have to search through many files. This is very convenient and saves a great deal of time.


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.

Advantages of Estimating Systems - Add Up the Numbers

By Mark Porter
 

If you were questioning the speed of the quoting process in our industry, satisfying customers quoting needs and dealing with competitors that provide pricing that cannibalizes the industry.

In this blog we will deal with the time aspect of quoting.

We will save the concept that estimating and selling are 2 different functions for another issue.
 

Unless you are the guy that just gives prices off the top of his/her head we will all spend time quoting but how much time and how much benefit you provide your customers and yourself from that process can vary tremendously

 

Part of this problem is that 7 or 8 out of every 10 estimates we do we don't get. I am sure nobody would be complaining if every estimate turned into an order. So if we have to do this necessary evil why not minimize the time and maximize the benefit you receive while providing a solid, educated quote that maximizes your chance of getting the job and allows you to analyze your business.

 

The act of doing an estimate involves much more then just getting a number to the customer and should provide more benefit to your company then just getting a 20% job conversion.

 

You can maximize your estimating process by:

 

Having information at your fingertips speeds the estimating process by finding old quotes, past history etc. Software with built in logic and calculations allows you more time to find the best way to run the job rather than crunching numbers, therefore giving you a greater chance to win the job. Information from the estimate saves time when you win the job because the estimate can be turned into an order, packing slip, invoice and hours can be used for scheduling. Analyzing estimates allows you to track valuable quotes and to prioritize your estimating time by customer, job types etc.

 

The following our some suggestions:

 

 

Estimate Searching

 

- Finding Previous Estimates is much quicker using an Estimate History feature with many search capabilities
- You can attach the original diagram sent to you that you based the estimate on in the history and you can attach the letter sent to the customer into the estimate history so all documentation is at your finger tips
- dramatically reduces searching and telephone tag time
- Simply pick the customer it brings in contacts, address, telephone, fax information immediately no need to look up
- requoting a previous job - quickly access problem history to see if you need to adjust estimate from last time it ran or if you using job costing quickly access costs last time you ran the job

 

Estimate Options

 

- Estimating Software allows you to estimate the customers Options very quickly because you can be doing them all at once
If customer wants to compare 5,000 / 10,000 / 15,000 you can do this all at the same time or if he wants to compare 5,0000 / 10,000 on 8pt stock and 5,000 / 10,000 on 12 pt stock they call all be done in one estimate with the software doing it automatically


Eliminate Crunching Numbers Aspect

 

- Spend time looking at best ways to run the job to increase chances of getting the job rather than pounding on a calculator
- Build in common material so automatic calculations of things such as foil, laminate, uv, dies, mounting board and glue etc. are done as soon as you put in the specs 

 

Not Just Crunching Numbers but also building in logic

 

- Software doesn't just crunch numbers it allows you to build your knowledge into the system. This not only saves time but also provides more consistency in your pricing which is beneficial to you and your customer
-This can allow you to download some of the simpler quotes to other people and frees time up for the serious and desirable quotes

Estimate Variations

- Finding Previous Estimates is much quicker using the Estimate History feature with many search capabilities
- Doing requotes is much quicker as the estimate is simply retrieved, changes made to existing estimate and resaved with an A,B,C variation
- Also be used for contract pricing
- Also if estimate comes from ABC Printer we know we will see it from DEF Printer and GHI Printer. Use original ABC Printer quote to quickly adjust for other printers doing the same job

Generate Additional Paperwork Automatically

- Automatically converts numbers of Estimate into a professional letter than can be printed/Faxed/Emailed directly to customer stating services and materials you are providing for the price quoted with your company terms and letterhead
- If Estimate becomes a job the software will convert the estimate into the format of the job ticket saving time there as well

Prioritize Customers

- Estimate History allows you to analyze customers as to won/loss ratios don't waste time doing a quote for a customer that uses you as a third price or at least do his quote after the good customers

Follow Up Estimates

- You spend so much time doing estimates make sure you follow up desirable estimates - Estimate History can track estimates of large quantities or high sales values so you don't lose them for a stupid reason like (customer doesn't think you provide a service in house or maybe your quote fell off his desk and your not even being considered)

Analyze Estimates with Estimate History
 

- Get benefit from the time you spend doing estimates by analyzing the data For example

- Won/Loss Ratios by Customer, Types of Work, Estimators ie track the customers and type of work you do best at or find out why your not getting certain work, identify potential new and desirable customers
- 80/20 Rule - 80% of revenue comes from 20% of customers track that their estimate level stays consistent or grows if there is a dip in their activity find out why and solve problem before it is too late

- Measure the number of estimates and type of estimates you do each day We all have a won/loss ratio if we are not doing the numbers and types of quotes that will keep business in the shop we have to adjust
- No recent estimates - that best source of new business is people you have dealt with in the past. Generate a report of any customer that has not done business with you in the last say 3 months

- Track and follow up desirable quotes as mentioned above

I hope this provides some help in saving time quoting and/or maximizing the benefit you can receive for the time you do spend quoting. 

 

Die Mgmt - Lock up Big Savings

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.