Just wishing everyone a safe and Happy Holiday and a prosporous New Year
Friday, December 21, 2012
Friday, November 30, 2012
CUSTOMER PROFILING LEADS TO CUSTOMER PROFITS
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.
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.
Tuesday, October 30, 2012
KNOWING WHATS NOT HAPPENING IS IMPORTANT TOO
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
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
Monday, October 1, 2012
FOCUS LEADS TO GREATER PROFITABILITY
By Mark Porter
I was reading an old 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.
I was reading an old 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.
Thursday, August 30, 2012
PROFITABILITY BEGINS WITH THE QUOTE
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
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
Wednesday, August 1, 2012
MORE ACCURATE STANDARDS LEAD TO GREATER PROFITS
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 methods.
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 methods.
Tuesday, June 26, 2012
CHARGABLE EXTRAS: A SIGNIFICANT REVENUE STREAM
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 the change 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
Video of Changes Management
Video of Changes Management
Wednesday, May 30, 2012
ESTIMATING:VALUABLE NUMBERS TO YOUR CUSTOMERS ... AND YOU!
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
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
Monday, April 30, 2012
80% OF REVENUES COME FROM 20% OF CUSTOMERS
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
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
Friday, March 30, 2012
IF YOU DON'T KNOW YOUR COSTS HOW DO YOU KNOW YOUR PROFITS
By Mark Porter
In a previous 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 to right.
Tuesday, February 28, 2012
ONLY GOOD DELIVERY IS AN ON TIME DELIVERY
By Mark Porter
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.
Thursday, January 26, 2012
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.
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