Printers are like Dell Computer?

I've been looking for a model for at least some parts of our industry. Couldn't think of a good one, then came across something in today's (9/6/08) NYT about Dell Computer.

The title is Dell May Shrink Its Network of Factories It's written by Steve Lohr.

Dell’s manufacturing formula was for customers to place orders on the Web or by phone for a made-to-order machine.

ABC Printing's manufacturing formula was for customers to define their specifications, then send in the input for a made-to-order printed piece.

But with the growth in the PC market increasingly coming from the consumer market and notebook PCs, Dell’s worldwide array of factories seem a cost burden.

But with the growth in the Print market increasingly coming from the consumer market and well defined brochures, books and posters, ABC's array of production functions seem a cost burden.

. . . Dell had approached contract computer manufacturers with a plan to sell most — and possibly all — its factories” within the next 18 months.

ABC had approached trusted printers in their area with a plan to sell most - and possibly all - of it's manufacturing capabilities within the next 18 months.

Shifting more work to contract manufacturers, analysts say, is inevitable for Dell. Consumer notebooks, for example, are made mainly by contract manufacturers in Taiwan, in a few configurations — not made-to-order machines configured individually for corporate customers, which Dell has managed very efficiently.

Shifting more work to contract manufacturers or focusing on just one or two manufacturing capabilities is inevitable for ABC. 3 7/8 by 8"-3-panel-color-brochures-on-coated stock, for example, are made mainly by a contract manufacturer located near ABC's customers, not requiring the complex made-to-order business systems configured individually for corporate customers, which ABC has managed very efficiently.

“Dell’s traditional manufacturing model was optimized for flexibility, configurability and proximity to customers, especially business customers,” said A. M. Sacconaghi, an analyst at Sanford C. Bernstein. “But if you’re selling 500,000 notebooks to Best Buy, it is far more efficient to have them made by one contract manufacturer in Taiwan, and shipped in bulk.”

ABC Printing's traditional manufacturing model was optimized for flexibility, configurability and proximity to customers, especially business customers. But when the market changed to allow easy access to specialists, it is far more efficient to focus on core strengths in manufacturing and the value of our customer base.

In a research report this week, Mr. Sacconaghi wrote, “Dell’s opportunities for cost reduction and profit improvement are rife.”

Mr. and Mrs. ABC, their sons and daughter said," ABC Printing's opportunities for cost reduction and profit improvement are rife.”

Mr. ABC,Jr and Ms. ABC are going to focus on the customer facing piece. While Mr. and Mrs ABC and Mr. ABC, III are going to focus on their narrow width web in the service of the pharma market where they have long standing relationships.

They are selling off the rest of their equipment and retraining their loyal staff to relentlessly focus on getting better, faster, cheaper. Luckily, since there is a rich network of trade printers, most of them doing very well, the customs are already in place to make the transition.