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.

"Give a little, get a lot - Start to understand the lifetime value of your customer"

For a while (column at WhatThey Think.com written in 2005) I've been on a soapbox for focusing on education, health and government as the real opportunities for printers in a shrinking print market. Advertising is in too much turmoil. Google, et al. continue to undermine the advertising and privileged content model in industry after industry.

So if very highly paid and talented CMO's are having a hard time figuring it out, it just doesn't make sense that printers should waste alot of time and money trying to. They would be much better off doing what they do, and keep doing it better, faster, cheaper. Then they should invest their limited time and resources in finding the customers who need what they can do.

At any rate, I found some good stuff about building the business case for education, health and government. My obligatory acronym is the EHG market.

The following comes from TransPromo Live. It is maintained by Lee Gallagher who is 'an industry researcher and consultant. He has extensive experience in the hospitality, retail, and distribution industries. Starting his career in 1992 with IBM, he continues to take on new challenges. He has held many positions at IBM over the past 16 years from project management, executive, and sales.. . ." - from the "about" at the site.

Selections from what he has to say:

From Transpromo Live:

How Transpromo Can Solve Social Issues
Some businesses might want to know why they should use valuable advertising space for public service messages. Some answers for the bottom-liners:

When the customer starts noticing their bills now include promotions and upgrades, (bold face not in original) they will expect each statement to try to sell them something. the whole point of transpromo is delivering targeted and timely promotions to the customer (bold face not in original) to show an understanding of their needs. How better to deliver that message than by offering useful and educational information? As we say, give a little get a lot – start to understand that lifetime value of your customers." more at the Click:

From another post at the same site.

Transpromo Assisting the Health Care Industry

How can Transpromo help?

The heart of TransPromo technology and services combine personalized marketing or (bold face not in original) education messages with must-read statements. For the purposes of this article, I am going to assume the must read communications are insurance coverage and benefits, medical conditions and treatments, and prescription drug documentation. The selection of messages placed on these statements could be based on past medical conditions, unused insurance benefits, and prescriptions. Remember, the ill elderly patient has an average of 20 different doctors. Now that’s a lot for the patient or care taker to coordinate. more at the click

Less is More or Just Say No!

Sometimes the view is more realistic when you look from far away.

By following the links at PrintCeoBlog, I got to Beyond Print. Based on the url it is based in Germany. The good news for me is that they have at least some of the site in English. George Alexander shares a really interesting take on the list of 36 printing companies that got on to Inc's list of 5000 fastest growing companies. The full article is worth the click here.

Meanwhile, here's some of what caught my eye.

One striking feature of the companies on the list is that they are specialized. Some are extremely specialized. For example, one specializes in printing on apparel (Underground Printing). Another prints primarily wedding items—invitations, placecards, napkins, even books of matches (The Artcraft Company). A third prints only labels, and only for six specific types of customers—those in the industrial, electronics, auto, outdoor power, medical and biomedical industries (Tailored Label Products).
. . .
What can printers learn from this? It is simple, really: if you want to grow in today’s shrinking market, you need to focus on a very specific customer group or set of value-added services, and you need to become outstanding at your chosen specialty. Although this concept is simple to state, it requires discipline, because you will have to say “no” to work that takes you in other directions.

So what does this mean for all the blah. blah about becoming a "solution provider" or a "communication partner" or "full service one stop shop?" It makes a salesperson question whether the best way to spend their time is to "learn new stuff" or "educate yourself" or whether it makes more sense to relearn what your outfit is already good at.

Maybe the best approach is to "provide the solution" of being better, faster and cheaper at whatever your firm is already doing best.

"Customers are the path to freedom".

This post is from Garth's World. At the click you can find a list of the cons of being a salesperson. But that's something most of us already know about. If you substitute "salesteam" for "salesperson" it's about right for 21st century Print sales. If your outfit doesn't have you as part of a team then either create one, continue as a loner, or find a new outfit.

Pros of being a salesperson

The number: Hitting that number frees you from all the chains of corporate life. Executive management LOVES you. HR shreds your file. PTO days don’t apply to you- and you work your own hours. It is the way that salespeople become the best paid people in the organization. Nobody can look elsewhere for who is number one because it is right there in black and white- I’m the best, so suck it. It is the closest you can get to being a celebrity or athlete.

Your boss: When you crush your numbers, you don’t have a boss. Your manager needs to just stay out of your way. There is no comparison in any other department. The top sales guy trumps the VP. He gets to slap the CEO’s bald head and call him “Woody” to his face. True story--I once laid down on the stage and fell asleep while a new president was grilling the rest of the company. I was closing deals--so he wasn’t talking to me.

The customer: I’m all about new people. Go ahead, jump in the cliché Conga line and say I’m a people person. Success in sales is directly attributable to how many people you can meet and move toward your goal. You are not allowed to sit at your desk and only deal with the same set of tired people (all former and present co-workers of mine obviously not included). The salesperson is constantly learning -and being entertained- and can make his own schedule. Customers are the path to freedom.

What do designers care about?

There's really only one sensible answer for most interesting questions.
"It depends".

In this case it depends on who is talking. Which designer? Talking to whom? When? Why? Given how much talking is always happening on the net, it just takes a little hunting to find the interesting conversations.

This morning, as usual, I poured myself a cup of coffee, opened the browser, and scanned my Google Reader RSS feed. My go to category is printing. I found the latest post from WhatTheyThink Environment, an interesting column written by Gail Nickel-Kailing. Today's column is called Walking the Walk. In her story there was a link to the Green Printer Blog.

As usual, the first place I go is to the About Us link. In the comments section I found a link to Design Fest. If you want to see/hear what some designers are saying, it's most definitely worth the click.

Here's a very small sample of what designers in the room say about design.

Design is a response to social change.
George Nelson

Design is art optimized to meet objectives.
Shimon Shmueli, Founder of Touch360

Design is a form of competitive advantage. People tend to think of design as good art, good visual language, which it absolutely has to be. But it’s also about the ability to do systems thinking.
James P. Hackett, President and CEO, Steelase

Design is not a plan for decoration.
Brian Collins, Executive Creative Director, Brand Integration Group, Ogilvy & Mather

Design, in the end, is about creating better things for people. Along the way, it can generate better profits as well.
Bruce Nussbaum, Editorial Page Editor, Business Week

Design is everything. Everything!
Paul Rand, Graphic Design Pioneer and Educator

Design is an integrative process that seeks resolution (not compromise) through cross-disciplinary teamwork. Design is intentional. Success by design simply means prospering on purpose.
Michael Smythe, Partner, Creationz Consultants

'There's a lot more at their site.

The Money Train - Canvas August 2008

Some excerpts from an interesting article by Graham Garrison. I agree with alot that is said. And disagree with alot.

Here are some quotes:

Cone says that prints sales reps should look at estimating as a science and pricing as an art. Estimating is a repeatble process, a scientific process,"he said. Pricing is an art. Different customers may warrant different pricing in different situations p.22-23

My take is that what he says was spot on in the 20th century. But in the 21st, the sooner pricing gets to a science the better for everyone. I agree that different customers should get different pricing. But just as the craft of production is being replaced by standard processes, so the craft of pricing is moving in the same direction. As usual, the best way to get to a scientific process is to listen carefully what the best craftspeople have to say.

Here's what Donald LaClair of Intelligencer Printing has to say in Canvas.

"With knowledge of cost, pricing will be based on plant load (schedule), amount of value added (maufacturing less materials and outside purchases), history with client and the competition" . . . p.24 According to Cone. . . ."Different ways of pricing for different customers in different situation... p.24

Donald is undoubtedly an artist and a very effective pricer/salesperson. The problem is that artists are very hard to find. Plus it takes alot of time to get the attention of the artist in your company. As we all know, in sales/pricing timing is everything.

Rule one is that a price that is delivered later than expected is worse than not pricing at all. It can destroy your personal/company brand faster than almost anything you can do. Meanwhile, the number of estimates that turn into jobs is usually somewhere south of 50%. That's lots of time and effort for no return.

Then on page 26:

Sell the customer before you quote the price, not after.

In the hands of anyone but an artist, this one is really dangerous. Consider you've finally gotten a suspect to try out your firm and asks for an estimate. The cost of getting the customer to engage - by asking for a price - can be high. Actually the best case - as in the lowest cost - would be for someone you don't know at all to ask for a price.

They don't want to be "sold", they don't want to build a relationship. They don't want a solutions provider or a communications consultant. They don't want to know about what good person you are or what your company can do for them. They want a price.

They want it now or at some very specific time very close to now. Rule number one is: A price that is delivered later than expected is worse than not pricing at all.

Sometimes an artist can have the gut feeling of the highest price you can charge and still get the job. But, as I said above: artists are expensive, few and far between. A price is either too low - leaving money on the table, or too high which not only means that the job disappears, but that the suspect gets the idea in their head that your firm is too expensive to keep on their bid list.

Plus I've see many estimates sitting on either the boss's or the sales manager's desk for the "great discussion." Salesperson wants the lowest price to get the commission and the contact. The house wants the highest price to make a reasonable profit." Then you often get into "We'll make it up in the long run." 'We'll get them on the AA's." etc. etc. Or... "that guy just wants to give everything away" or "that sales person needs a killer instinct."
Lots of time consuming drama.

So what are some ways out. The easiest is the price list.; That seems to be the solution that PrintingForLess.com and lulu.com have decided on. It seems to be working pretty well for them. But they have a national audience, and production systems that are under control and make this work. They can make it up on volume because they have eliminated the estimating process and have a predictable, under control production system.

But that can't work for everyone. Especially if you are going after large projects. But I will leave that for another day.

Meanwhile, if you can't get the customer a good price in time without having to go through the drama of the pricing dance, you're better off passing. You can say something like, 'The plant is so busy that it will take a week or two weeks for that number. If you are ok with that, I will be happy to help. If that's too slow, make sure you cover yourself for now. if you have the time, I would be glad to stop by this afternoon to go over the details and get a real clear idea of the project and then see what I can do".

Tis better to have loved and lost, then to disappoint or drive yourself and your estimator nuts getting it done.