Reevaluate production standards and pricing policies or you too will be singing the blues
By Jack J. Epstein

For many years, the only people entitled to sing the blues were those who knew the true meaning of pain and suffering. They worked on farms or in honkytonks; certainly not printing companies.

As we all know, that began to change at the end of the 1990s. Now some printing managers and sales reps share these same lovesick feelings of despair that built the blues. Instead of lost loves, we wail away about lost customers, how competitive the marketplace has become, and a constantly shrinking bottom line.

Although nobody sang songs about how easy things were in the summer of 1998, perhaps we have fallen victim to our technological successes. With that said, what measures have you taken — besides deeper across the board discounting — to adjust for the changes in our industry since the good times of 1998?

The truth is, printing shouldn’t cost as much as it used to and neither should computers, telephones, and televisions that don’t require a building permit. We have all learned how to crank out orders in the time it used to take to send a letter across town. The equipment and methods at our disposal are more than equal to any challenge and some only require a minimal investment in software updates.

Remember that cost justification you did for a computer to plate upgrade that was based partly on lowering paper consumption and faster press make-readies? Did you change productivity standards immediately after things settled down to better reflect your improved workflow?

With all this new technology, a single prepress worker easily can handle multiple jobs simultaneously. The prep department has 25 percent fewer employees than it had three ago and takes up less floor space as well.

Yet, some printers think they are giving customers a break by not raising the price per page the last few years.

You’re now using plates that can get 250,000 impressions on offset or coated stock. The estimating system still applies 100,000 to everything. You got all excited about winning a big job on newsprint that the customer will supply. The enthusiasm faded after you learned you could only get 75,000 impressions before having to change plates for the cheap stuff. A handling fee for the six truckloads of stock was never calculated to recoup the lost mark-up if you had bought the stock. Here come those blues again as you start reviewing your latest profit and loss and statement.

Here’s another area for review: exact reprints. They have always been aggressively marked-up since this was an area for printers to increase margin. After all, you did have a captive audience. Things are different today.

B.B. King’s famous song “The Thrill Is Gone” comes to mind here. Print buyers have to impress their bosses and shop everything knowing that with PDF’s, they now have the upper hand when it comes to reprints. Loyalty falters as you plead for them not to walk out the door. It’s enough to make anyone want to overdose on a George Jones tune.

What’s a printer to do?
At least once each year, every company needs to take a hard look at their productivity standards, and study how their work might have changed over the past 12 months. If not, will anyone within the organization take demands for incremental improvements seriously if they aren’t involved in establishing goals and figuring out where adjustments are warranted?

The lament that “t’aint nobody’s business but my own” may have worked for Mississippi blues master Taj Mahal when he sang about romance, but it can’t be applied when you want a self-motivated work force. It is demoralizing when a worker puts everything they had into a job only to find out the next day they were 40 percent efficient.

Standards are typically developed from what the manufacturers originally said was possible. Often, however, these standards aren’t practical because they never include variables such as humidity, static, curl, grain and the present state of the machine that may need a massive overhaul. There are other situations that when the origin of a particular standard was questioned, the answer was simply that a long-gone employee set it up that way years ago. Obviously, that is not enough reason to keep using such a standard.

Areas to review
Here are some areas that typically need some self-administered chiropractic manipulations. Most printing companies used to expense prep supplies like, Rubylith, Mylar and tape. You probably have people who have never seen any of that stuff. Yet the obsolete supplies are still carried over in the budget.

Most pressrooms run a wide variety of stock. Most computer systems are capable of applying slowdowns based on caliper. Has your mix of papers changed and do they all really run at the same speed? How can you tell if you have a variance if you don’t have the means to measure the results?

Do you do anything differently when printing on a top quality sheet verse a sheet of lesser quality? The experts will tell you how important it is to make-ready on the same stock you are printing when it comes to controlling ink/water balances on premium stock.

By very definition, when a job is specified on a top quality sheet, the buyer has higher quality expectations. Think about adding more sheets for these jobs or you may end up being short and having to go back to press.

How should estimating, prep and press handle PMS (Pantone Matching System) jobs verse a four-color job? Which ones are more demanding? Are tight register jobs with builds and blends treated the same as spot color? How many units really have to be washed-up?

You may have raised the standard for plate make-readies, but did you remember the built-in time for work and turn forms? Let’s not forget the ink codes called four-color and PMS. Ink prices have risen over the years. Are the expected costs verse actual costs the same as they once were? Or is the only exercise your bean counter getting when he or she jumps to the conclusion that the pressroom is more wasteful then they used to be and the inventory counts must be all wrong? Have you analyzed the automatic slow-downs based on ink coverage?

Study how run lengths have affected productivity on certain machines during these days of “just in the nick of time purchasing.” If long runs have been moved to different equipment, and now only very small quantities are produced on a particular machine, the opportunity to make up lost time may not be there. The automatic slow-downs that get applied to an estimate may be in line, but it can make the person on the floor look very unproductive if new accommodations have not been made. This can be especially true in the bindery that now has to cut, fold, and pack personalized material that must be kept in order and can’t have any waste.

Do your hand operations fit the work you now do? Get the people involved who actually do the work. We all seem to be doing complex kit building that involve everything from CD’s put in jewel cases to fugitive gluing pieces. Your mailing lists could be foreign in more ways than one.

The time may also be right to take a look at how shipping gets charged, especially if you have your own fleet. Every sales manager is making an effort to expand their market, but what impact will it have on a delivery department as diesel fuel approaches $2.50 per gallon? Setting up a zone system like UPS might make sense.

How many surplus pieces are being produced that can’t be sold to the customers who won’t pay for overs? Perhaps term limits should be imposed on your finishing waste table.

Aren’t we all getting a bit tired of listening to the clichés about “staying the course”? I can hear more now, “We can’t raise prices, it is too competitive out there.” Then out of the other side of a mouth comes, “We can’t cut our prices; we’ve been getting away with that for years. Why should we go through all that work?” Because very few of us are pleased with how things are going.

Without accurately applying costs where they belong, you run the risk of constantly being overpriced on simple jobs and overloading the shop with non-profitable ones that have been under estimated. Your prices did not come down from Mt. Sinai never to be edited. Believing in the blues ballad you were “Born Under A Bad Sign” might result in being at the airport when your ship finally does some in. Don’t dig your heals so deeply into the sand that you find yourself up to your neck before taking corrective actions.

Haven’t we all learned to do more with less? Should that in itself be reflected somewhere in the hourly rates? You develop a new method and make a huge profit on a job. That’s a wonderful success story, but don’t let the play turn into a Greek tragedy by not letting everyone in estimating know what happened so they can apply it to another job that just might end up turning into a major contract.

There are plenty of times when the company that makes the biggest estimating mistake wins the job. Let it be your decision about how badly you want the work based on sound accounting principles.

The competitor who doesn’t know what their costs are has been around forever. Some people say, “They are destroying the marketplace.” Either the cheap guy is given way too much credit for being among the most influential forces in the universe or just maybe they have a better handle on their entire operation.

The net effect of a system overhaul may not be that dramatic. Some things will go up and others down, which is how the marketplace has always been. Don’t be afraid to get outside help to moderate new initiatives. Keep in mind that calculating hourly rates is not an exact science. They are based on budgeted utilization that is about as scientific as predicting what sales will be.

Logic must get applied and old prices compared to new ones. If you just can’t stop the discount habit, you can still apply a good one for customers who supply certified PDF’s and pay their bills on time including all AA charges and overs.

About the author: Jack Epstein is a third generation printer and native New Englander. He is currently director of operations at a Maryland printing company and enjoys a wide range of music including the blues. He has written extensively for numerous industry publications over the years. He can be reached by e-mail at .