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

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.

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.

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.

ARE SAMPLES DRAINING YOUR COMPANY?

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

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

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.