Printing and Purchasing

Posts tagged ‘print procurement’

Video

Pastry Magnets printing on a Vutek Wide Format Press

Roll to roll inkjet printing on magnet material, solvent to UV, wide format. Printing six images [individual magnets] across the roll of substrate.

Now that you have seen how the magnet is printed, come in and try Cumberland Farms fall special Pumpkin Yogurt Muffin. Click the following link to find a store near you.  http://cumberlandfarms.com/FindaStore/default.aspx?zip=Zip

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A White Washed Print Shop

Have you been somewhere and the print shop was neat but something was missing? I have. I need to take you back to a previous visit of that print shop. During this visit the shop floor was a mess and un-kept. Rags were lying around instead of put away neatly. The folder was used as a shelf instead of folding printing. A glue brush, still with glue, lay on a bunched up rag on a table. A mobile rack had rags in numerous areas, as well as an inked plate, and a kinked plate lying on another shelf.

Would you give printing to a print shop like that? You would be probably thinking, “will they be able to produce my job correctly, or will it be a mess like their shop?” I mentioned to key individuals associated with the print shop, how messy the shop floor was, along with other matters of concern. Fast forward in time to a meeting which a senior manager, from the messy shop, and I attended. We talked for a few minutes and the shops appearance came up in the discussion. The senior manager enthusiastically mentioned how the shop had been transformed and offered a tour.

I took the manager’s offer to tour the print shop. During the tour I could see that the shop looked much neater, however it was more of a white wash. A white wash per TheFreeDictionary is:” Concealment or palliation of flaws or failures.” The following are the reasons for my statement:
1. Warehouse
o No list of materials
o No location identifiers such as isles, shelving etc.

2. Press Room
o Crinkled plate was lying on a shelf
o Stacks of a previously completed job not thrown out
o Used ink knife was lying around, un-cleaned
o Rags were laying around

Do you believe I am being too harsh? Please tell me what your opinion is. Would you send your work there? Hopefully the manager has taken my comments and is the process of improving their facility. I look forward to seeing the improved transformation.

Printing: Paying the Right Price

When a customer’s order is complete, will they have paid the correct price?

In traditional printing, there are numerous variables that affect costs – these variables are driven by customer requirements, such as: quantity, number of colors, coating types, and finishing operations, to name a few.  In digital printing, however, there are fewer variables that affect cost.  It can be said that each variable produces waste and the printer estimates the price based on historical averaging of these known variables.

Conventionally[i], the delivered quantity of an order has been +/- 10 % of the quantity ordered, – for either traditional or digital printing.  Furthermore, the delivered quantity will most likely be different than what was ordered.

How will the customer evaluate the invoice during the auditing phase so to determine the proper price from the ordered quantity versus the delivered and the estimated price versus the invoice? The answer to this query lies in the billing technique used by the sales representative.  The easiest technique to use and comprehend is the “Thousand-Rate Price” [TRP]; however, it is generally inaccurate, because the customer has already paid for the fixed cost, as the following example demonstrates.

                          Quote                          Quote

Item                  Quantity A                    Quantity B

Quantity            90,000                         100,000

Pricing              $29,000                        $30,000

TRP                  $322.22                        $300.00

The “thousand-rate” price [TRP] is defined as: the estimated price [$30,000] divided by the order quantity [100,000].

Another technique is Additional-Thousand Pricing [ATP], which should be lower than the Thousand-Rate Price [TRP], because all the Fixed Costs [FC] have been covered in the base quantity [100,000] estimated price.

Fixed Costs [FC] are defined as: costs that remain constant, regardless of any change in a company’s activity[ii]. They include such items as: pre-press, plates, equipment and material make-readies, dies, etc.

Pre-Press                    $15,000

Plates                              1,000

MR Press & Bindery        2,500

Dies                                    500

MR Materials                   1,000

FC                                $20,000

The “Additional-Thousand” Price [ATP] is defined as: the estimated price less fixed costs divided by the order quantity or the variable cost to produce one-thousand pieces. The additional-thousand pricing can be sub-divided into two categories: arbitrary discount [ADATP] and variable cost pricing [VCATP].

Variable Costs [VC] are defined as: costs that change in proportion to a change in a company’s activity [quantity] or business[iii] and include such items as: non-make-ready materials; paper, ink, and non-make-ready equipment or production run costs.

The Arbitrary Discount Additional-Thousand Price [ADATP] is defined as: a discount percentage the sales representative has developed based on their intuition over the years such as discounting the Thousand-Rate Price by 30%. This discounted rate may or may not be a fair price, i.e. $300 x 70% = $210

                          Quote               Quote

Item                   Quantity A        Quantity B

Quantity             90,000             100,000  

Pricing             $29,000             $30,000

TRP                 $322.22             $300.00

ADATP             $225.55             $210.00

The Variable Cost Additional-Thousand Pricing [VCATP] is defined as: the Thousand-Rate Price with all Fixed Costs subtracted: TRP – FC = ADATP.

For illustration purposes, assume that Quote Quantity B is the ordered quantity, and the printer delivered a quantity of 102,000 giving the customer a 2% over run. Two percent over run is well within printing guidelines.

When evaluating the invoice the customer may use extrapolation or interpolation when there is a minimum of two different quantities per illustration.  For reliability when using interpolation or extrapolation, the estimated quantities should be within a reasonable quantity range of the billing quantity. When quantities are drastically different from the estimated quantities however, other factors within print production or estimating may influence the accuracy such as: plate ware, additional make-readies, price discounts on materials, arbitrary printer charges, etc.

Extrapolation would be used to audit the invoice pricing for the illustration above. The illustration below provides how the VCATP is determined.

                         Quote               Quote

Item                  Quantity A        Quantity B      VCATP

Quantity            90,000     –       100,000   =     10,000 quantity difference

Pricing             $29,000    –       $30,000   =      $1,000 pricing difference

TRP                 $322.22            $300.00           $1000/10,000=$0.10 each or $100/M

ADATP             $225.55            $210.00

Extrapolation is defined as:  the process of constructing new data points outside a discreet set of known data points.[iv]

Interpolation is defined as: constructing new data points between known data points.[v]

The following are three pricing examples based on the illustration:

TTP: 2 x $300=600 + 30,000 [Order Price] = $30,600

ADATP:  2 x $210=420 + 30,000 [Order Price] = $30,420

VCATP:  2 x $100=200 + 30,000 [Order Price] = $30,200

Alternatively the example showed a delivered quantity of 98,000, then $200 would be deducted from the 100,000 price of $30,000 = $29,800.

To sum up the arguments, VCARP is clearly the fair price for both parties, and additionally for the customer it is the best price, for most occasions.

The following are important keys to insure the printing is priced fairly:

  • When requesting pricing, always request a minimum of two quantities.
  • Use extrapolation or interpolation to verify pricing.

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Your comments and your print-procurement questions are appreciated concerning this article and other related matters.


[i] “11. OVER-RUNS AND UNDER-RUNS. Over-runs or under-runs not to exceed 10% on quantities ordered, or the percentage agreed upon, shall constitute acceptable delivery. Printer will bill for actual quantity delivered within this tolerance. If customer requires guaranteed exact quantities, the percentage tolerance must be doubled.”[http://www.multiad.com/print/Virtual_Center_PDFs/White_Paper_PDFs/PRINTING%20CUSTOMS-rev.6-25.pdf ]

[ii] http://www.investopedia.com/terms/f/fixedcost.asp

[iv] [http://en.wikipedia.org/wiki/Extrapolation]

[v]  Ibid.

Why Companies should update their Client Addresses after Mailings.

Last week at the Post Office, a customer was picking up a package.  The customer’s comments to the Post Office Representative, illustrated bewilderment as to why the vendor had delivered their order/package to the wrong address since the vendor’s monthly mailings were delivered to their home.

Assuming the vendor is using the same address file to ship the product as to send monthly mailings, there are several possible reasons the product went to the wrong address. 1] The buyer has not requested the updated NCOA information from the mailer, 2] the buyer isn’t forwarding the updated NCOA information, or 3] the updated information isn’t being applied to their client database.

When preparing an address list for mailing, mailers compare the address file to the National Change of Address [NCOA][i]. The NCOA file is updated when people or businesses notify the Post Office they are moving by completing a change of address form[ii]. The results of the NCOA comparison is two lists; A] updated addresses and B] addresses with issues, also called bad addresses. The mailer should provide the customer a list of bad addresses along with the code description[iii] explaining why the addresses are bad. It is up to the customer to decide to mail, delete or update the bad addresses. The client can pay the mailer to research the bad address or they can use verification websites like “Search Bug” and “Melissa Data”[iv].

When ordering a mailing, buyers should request the mailer provide them the NOCA corrected addresses file. The corrected and bad address lists should be forwarded to the department responsible for managing client addresses. The customer, in my example, filed a change of address with the Post Office but neglected to provide the same information to the vendor. If customers would request the updated addresses from mailers, and update their client’s addresses, the package would have been delivered to the client current address.

Please e-mail your questions, comments, or send PDF’s of printing and mailing issues to printer1@charter.net.

Thank you for your time.

Why Information Stickers are Important

On a recent Linked In poll, 23.8% of participants voted they did not receive or place information stickers on proofs. In an age of ISO and process improvement, printers providing proofs without information stickers 1 out of 4 times is unsettling. Information stickers assist the production process by minimizing rework caused by incorrect job specifications.

Information stickers, called proof stickers, contain important job information to the client/customer and printing plant. Information stickers are attached to physical proof. The stickers contain the printers name, job number, quantity, substrate [brand name, weight, finish, paper, styrene, etc], ink [PMS, Process, etc.], banding, wrapping, packing and delivery information. Information stickers also provide an area for the client/customer’s signature, confirming the proofs and information are correct or need to be changed.

With physical proofs, finishing is represented by actually performing the function on the proof. For example, if the job is 3-hole punched, the proof is 3-hole punched. This allows the customer to verify no copy will be compromised from the finishing.  The size of the punch should be noted too.  The same should be done with folding, [key folds], stitching, spiral wire, wire-o, GBC comb, etc.

When proofs are digital, such as PDF, finishing descriptions are needed.

Printers create a job bag, physical or electronic, for each new job which includes all pertinent information. A proof, either electronic or physical, is sent to the client/customer for copy/content approval. The information sticker provides job identification for the proof and a means for the printer to confirm the job specifications are correct.

During the press make-ready, the press operator should have the job bag and the proof/information sticker. When the press operator observes the job bag and proof information don’t match, the job is stopped until the conflict of information is rectified.

Many jobs during the production process have specifications which change. These changes can be quantity, substrate [weight, name, finish, etc], delivery, packing, etc. When press operator reviews the job bag along with proofs, insures the printed job will match the clients specifications.

Please e-mail your questions, PDF’s of printing issues or comments to printer1@charter.net.

Thank you for your time.

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