The procurement of print is much more complex than one might think. It requires expertise across several fronts. In its report titled ‘Category Expenditure Management: Print and Print Services’, the Aberdeen Group summed it up succinctly. A South African company, POINT claims proven savings in excess of 30% in this area..
“Print involves both the complexity of printing services and the logistics of finished goods, therefore, print procurement poses unique supply management challenges.”
This scenario is as relevant in the US as it is right here in South Africa. “In the first place the value-add is not just price,” Christian Bell, recently appointed Sales and Marketing Manager at local Print Management Company POINT told SmartProcurement during a February interview.
Bell says that the usual three quote system, the widely accepted pricing tool for this spend category, will not necessarily achieve the desired result in the case of print.
“Maybe all you’re getting is the third highest price available in the market?”
Print is typically an ‘unloved’ grudge purchase and is frequently unmanaged, not only from the point of maverick spending: who owns the commodity? Marketing, brand, procurement or the agency?
“What’s even more surprising is that despite the huge amounts spent on print (Aberdeen estimates 3% to 5% of total operating expenses), the category has to date largely avoided optimisation. An amount of 80% is typically sourced manually, whilst 27% is sourced by maverick users. On average over 40% of an organisation’s print is sourced off-contract. The opportunity is simply huge,” he explained.
Through exposure to POINT, the South African operation of fast-moving consumer goods supplier Unilever began to realise considerable benefits from its introduction of a print management system for point of sale material (POSM), promotional packaging and other print categories, noted Bell.
It was already moving towards the outsourcing of non‐core functions, and the benefits it required included process and cost improvements:
• Reduce cost from improved sourcing practices and leveraging regional synergies.
• Introduction and integration of Procurement workflow technology.
• Reduce lead time to match competitors.
• Improve quality and achieve better brand compliance.
• Increase transparency and improve reporting.
• Increase control and centralisation.
Significant cost savings (Unilever has saved over 35% on its print spend) are only a part of benefit that corporates should enjoy from huge improvements to the whole process and the entire supply chain. Most importantly, they need to include the technology and the know-how, said Bell.
To fully realise the benefits of print management, organisations must look for a provider with the ability to provide six key deliverables, namely:
1. People and Technology. Web-based, secure software with a proven track record.
2. Consistent high quality. The ability to rate suppliers according to a client driven scorecard.
3. Wider base of suppliers. Look for 5 to 7 quotes and source directly.
4. Do not favour any suppliers, its an open bidding system. Work with a provider who is not in fact a printing firm. Some competitors who are printers may just be trying to get print management to fill their presses/machines.
5. Compliance. Ensure usage of the process by keycoding items.
6. Transparency. Have the ability to audit spend patterns and view complex reports.
Contact Christian for a copy of the Aberdeen Report or the Unilever Case Study christian@pointsa.co.za
Next month – environmental management – greener print procurement.
