In the three and a half years I’ve been at Gelato, I’ve personally met with over 300 companies. Most are unfamiliar with ‘Total Cost of Printing’ and instead focus on price-per-unit. This can be misleading and presents a number of potential pitfalls.
To determine the true cost, the complete value chain needs to be considered; from design, creation, translation, file management, storage, shipping, customs and so on. Printing typically costs just 20 percent of the total print process.
Many companies have also told me “we don’t print that much anyway” but when we dig just a little deeper, we find they print far more than they realise. In fact, print and shipping costs are 0.22-0.27% of the top line for many companies.
Whereas the majority of internal business processes have evolved with the help of disruptive software solutions (just think of HR and finance), printing has largely remained the same.
Here are the top 5 pitfalls of using an outdated approach.
Pitfall 1 - Shipping
Most companies use a combination of centralised and decentralised printing, which comes with hidden direct and indirect costs.
For example, when producing prints in one place and shipping them across the world, customs can be a key challenge. We’ve seen instances where custom fee payments have had to be paid in cash upon delivery. We’ve also seen prints held up at customs for weeks and denied entry altogether.
Shipping can add 50-60 percent on printing costs and import tax is often between 15-20 percent (although in some cases it can be as high as 100 percent). This also contributes to indirect consequences such as long lead times and needing to over-order materials ‘just in case’ they’re needed.
Shipping such large distances is bad for the environment. Transport is the second worst polluter across all industries and accounts for approximately 26 percent of all carbon emissions.
When there is an alternative way, as there is today, there is simply no need for such inefficient practices.
Pitfall 2 - Excess printing
Printers can upsell products and services, which include additional prints, storage, handling and waste management.
Of all the companies I’ve met with, I’m yet to find one that knows how much they throw away. After a bit of investigation, we believe that wastage is normally around 30-50 percent of everything. A staggering nine percent of carbon emission in the manufacturing sector comes from paper and pulp production alone. Waste is big business.
The answer is to print on-demand.
We always question our customers; does a catalogue need 500 pages? Can it be broken down into smaller, more targeted products?
One of Gelato’s clients is a global car manufacturer. It wanted a huge amount of catalogues to support a product launch and intended to distribute them to its resellers. We convinced the company to flip its approach and let the dealers order the catalogues themselves. This resulted in a 74 percent decrease in print volume.
Although digital printing can cost more per unit, the total cost is normally greatly reduced.
Pitfall 3 - Repetition
A lack of digitization and decentralized design often leads to a lack of collaboration. Many large companies use local designers and have local print partners across the world.
The issue is one of unnecessary repetition. The same company typically produces the same thing over and over again. File creation should instead be as centralized as much as possible.
By using a Digital Asset Management (DAM) solution for sharing files, or by keeping files in one library, everyone can be given access to shared resources. This should include editable templates, so that brand consistency can be retained while local teams are empowered to modify content for their audiences.
Pitfall 4 - Inconsistency
One company, which believed it had full control of its printing, was shocked when we presented materials that showed otherwise.
We had collected items from ten of its offices across Europe and revealed big discrepancies in design, paper type and color. There were items in circulation that HQ wasn’t even aware existed.
The best approach is to centralize brand management and decentralize operational tasks such as the ordering of prints.
Pitfall 5 - Supplier standards
Corporate Social Responsibility is an important part of most big businesses. Yet ensuring high partner standards can be problematic. While building a network of over 70 print partners across the world, we’ve seen conditions in print houses that mean we’d never accept them into our network. We have seen very old machines, bad conditions and even child labor.
Making sure acceptable standards extends to print partners is vitally important. When working with Gelato you know the highest standards are adhered to.
Focusing on ‘The Total Cost of Printing’ can really impact a company’s market value. In order to get everyone on one platform, top level support is needed and a target must be set.
Here is what we advise....
- Move from global to local printing in a managed way
- Force collaboration through technology (DAM just one example)
- Move from macro to micro (on-demand)
- Increase brand control by centralizing the brand
- Secure global cost control by using technology
- Make shareholders happy by increasing your company value
If you’d like to discuss further please contact me via: firstname.lastname@example.org