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Outsourcing – What’s in
it for you
PPI Nuts N Bolts
July 18, 2001
Skip Corbitt, Ikon Office Solutions,
206-901-2500 wcorbitt@ikon.com
Milt Vine, Seattle Bindery, 425-656-8210 miltvine@seattlebindery.com
Opening
thoughts:
·
Internet search turns up 623,930
hits on “outsourcing” – a hot topic
·
Outline will be on PPI and
Seattle Bindery web sites
·
Watch out for reviews that focus
on features
·
Watch out for “siren song” of
“look what this equipment will do”
·
Vendors can be very helpful, but
make your own evaluation
Advantages of outsourcing for printers –
long-term / strategic:
·
Reduces printers financial
breakeven point
·
Frees capital to allow for
printing abilities to improve
·
Trade shops have the experience
(if you choose the right one for the job)
·
And the expertise
·
Operators get to specialize in
what they are good at and like
·
Gives ability to use highest and
best use of capital (opportunity cost)
·
Can “fund” growth with payable
to trade shop, get $ before payable due
·
Trade shops have much more
diverse equipment
·
Job specific knowledge (did that
job for two other printers in the past)
·
Controls square footage
requirement
·
Prevent need to expand plant
size
·
Many other industries are moving
this direction
·
Employee retention – if I have
to run that folder one more time, I quit
·
“Expert” consulting advice to
visit with printers customer
·
Use “value added” accounting and
avoid miscommunicating results
·
“Insurance” – if they mess it
up, they pay for it
·
Let’s the printer keep her “eye
on the ball” or the core business
·
Allows staffing for less than
100% of capacity
·
Allows printer to add services
that customer may need, more attractive as vendor
Advantages of outsourcing for printers –
short-term / crisis management:
·
Fill in for temporary labor
shortage (vacation, illness, training new person)
·
In-house equipment is down or
double scheduled or running slow
·
Customer has crisis with second
vendor
Editorial interlude:
·
Thoughts on how to price outside
buys
·
Monthly result comparison with
and without outside buys
·
Reasons print buyers have to use
printers with the wrong equipment
Advantages of in-plant production for
printers:
·
Control of job process
·
Increases value added
·
Reduce turn time for job
(usually)
·
Market perception of “full
service”
·
Equipment sales person will like
me
·
Ego
Observations:
·
How many new in-plants can you
name?
·
Dick Goerlich said in May “value
added is overblown”
·
Choose the right trade shop,
they aren’t all the same
Non-factors:
·
Will I be less important to the
trade shop after I bring _____ in-house.
·
New machines are more efficient
(from “article” in Graphic Arts Monthly)
·
They have my dies (whose dies
are they?)
Tips:
·
Know the true cost of new
equipment: (training, waste/rework, learning curve, “tricks” to learn,
space, power, site prep, ventilation, compressed air volume, noise control,
supplies inventory, spare parts, parts availability, blade sharpening,
repairs), “life cycle cost”
·
Technical compatibility (29”
press and 20” folder)
·
Don’t buy for one job
·
Choose a vendor carefully (tour,
equipment evaluation, financial viability, scope of services, ask around)
·
Don’t forget Trade Printers too
Questions, comments and war stories from the
floor
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