December 16, 2013 •Brian Watson
Amid the worst global recession since World War II, businesses of all sizes and specialties have responded to slower sales and lower profitability by taking careful aim at expenses.
But indiscriminate belt-tightening only goes so far. Facing five years of tough economic conditions, many businesses have already trimmed once-bloated balanced sheets of obviously low hanging fruit. Yet plenty still find themselves in cost-cutting mode – without clear line items to target.
Although it might not top your list, business printing is an ideal place for businesses looking to reduce costs to start – for two simple reasons.
One, businesses tend to spend a lot on print resources.
On average, printing costs represent between 3-5% of a business’ operating expenses. That’s a considerable amount spent applying ink to paper. And while external print purchases only make up a portion of those costs – office printing is also factored in – recouping even a fraction of that lost revenue can have a big impact on bottom line profitability.
And two, there’s a significant opportunity to reduce spend by paying careful attention to how collateral is purchased and used.
Print supply chains tend to be complex and disjointed. Businesses often juggle multiple suppliers or leave it up to each location to set its own procurement strategy – restricting the amount of visibility into, and control over, how orders are sourced, bid for, and used.
It also limits leverage. When companies – especially large ones – order in bulk, they receive better terms. A go-it-alone strategy prevents both bulk ordering and the kind of management oversight purchasing managers need to ensure print assets are being ordered in the right quantities, and used most efficiently.
For those reasons, print management outsourcing is becoming an increasingly attractive option for many businesses – both large and small. Companies participating in a well-planned and –managed outsource print management program can expect average savings of between 15-30% in its overall print spend.
In this excerpt from Elite's latest whitepaper – The Case for Outsource Print Management – we'll examine what outsource print management is and how it helps businesses reduce print procurement costs.
What Is Outsource Print Management?
Outsource print management blends consulting with production – helping organizations spend less and earn more with smarter, more efficient item sourcing, procurement, and use.
Businesses can have a hard time viewing print as anything but a commodity – ink applied to paper.
But while production costs certainly factor heavily in determining the total size of your investment, there’s a big difference – in cost, in speed-to-market, in the ability to respond quickly and efficiently to changing market conditions – between a company that solicits quotes on a job-by-job basis and one that embraces a holistic, enterprise approach to purchasing print.
The later can’t leverage the size of its entire organization-wide print buy to affect key production terms, like pricing or order speed.
It lacks the visibility into print supply chain operations – how locations or departments order, store, and use assets – to consistently avoid costly item management pitfalls like stock-outs, hording, or spoilage. It doesn’t have the tools to identify printers with excess capacity – production equipment that’s running at less than peak levels – and secure deep project discounts.
The point is that print efficiency goes much deeper than just the price of ink and paper alone.
Outsource print management leverages that truism to provide a strategic framework that reduces costs and enables fast, efficient item management.
How Does Outsourcing Reduce Print Costs?
Outsource print management is all about strength in numbers. And the efficiency that comes from knowing exactly who’s ordering what items and how they’re being used.
Sure, you might have a sound sourcing strategy – soliciting bids from multiple printers before making a purchase decision. Or purchase in quantities large enough to qualify for production discounts.
But even businesses with multi-million dollar print budgets sophisticated internal procurement controls lack the scale, relationships, and resources to receive the best terms possible on print purchases. Not to mention the visibility into print supply chain operations that drives lean, effective management of print assets organization-wide.
Outsource providers specialize in print management and understand the complexities of running a large, geographically diverse print supply chain.
They have access to technology, relationships, and scale that remove production bottlenecks and reduce print spend. They allow businesses to direct employee attention and productivity back to tasks that are a more profitable and efficient use of their time.
All of which provide a major competitive advantage – especially in today’s tough economy.
Ready to learn more about the nuts-and-bolts of outsource print managment? Find out how outsourcing helps reduce spend and increase productivity – plus the key tools you should look for in an outsource partner – by downloading our free whitepaper, The Case for Outsource Print Management today.