We live in an age whereby Printers do not survive unless they invest in technology, employees juggle many duties and there is an emphasis on being a low cost producer. If a printing company has high prices – guess what? They go out of business. If their presses are 30 years old – guess what ? They go out of business. You get the idea – it’s really not rocket science.

But when we move from the private to the public sector, the dynamics change. “Government efficiency” is considered an oxymoronic concept. We are shocked when someone in the public sector seems to care about our problem, is competent and has a sense of urgency in their duties. That is very, very sad – but even more so, very destructive. The U.S. Postal Service is the poster child this year for a government agency no longer able to survive in the modern age.

Attempts are being made at restructuring, but what is the long term outlook? Yes, they have labor unions to contend with. But they also have other major problems with far superior competition (UPS, FedEx), and a huge volume decline; not to mention a computer infrastructure that is a joke.

For example, have you ever used the USPS tracking system? I have many times – and 90% of the time, the package is delivered while their system still
says “A label has been generated. No further information is available.” That is a workflow process that does not scan often enough (hardware issue?) or a database that never syncs with field data. Either scenario is from a flawed, and broken system. Compare the tracking to their competitor, UPS, whereby they can tell me on my Droid (with their own app) each and every step in the shipment. AND when it is delivered, I can see the signature in an email within 5 minutes after delivery. Now – is it any wonder that UPS Ground is a better choice than Priority Mail?

Have you ever visited a Post Office, and there is a like-new credit card reader sitting on the counter, but you cannot use it? It even has a sign on it that says “Do not Use” . The Postal worker has to take your card and scan it themselves – once again a broken system. AND taxpayer dollars were wasted on a project that did not deliver on its’ promises. Was anyone held accountable for the waste or cost? Why not? In the private sector, people lose their jobs when
millions are spent on failed projects. They actually have to have an acceptable ROI.

Why is the USPS broken ? I think it’s simple – no U.S. government agency can compete in the private sector, where efficiency and competency is required for survival. Capitalism is Darwinian, eliminating waste and rewarding smart capital decisions. Government agencies tolerate waste, bad decisions and Capital project cronyism. It’s not rocket science…

There seem to be two schools of thought among printers regarding “New vs. Traditional” Media. On the one hand, some printers fight anything that has to do with digital media, viewing it as a threat to their business that they have to treat with utter disdain. And then there are printers that are trying to determine how to add digital to their product and service offerings in order to build more effective and ingrained customer relationships. I submit that the latter school of thought will work and the former will be an utter and bitter failure.

One has to, first of all, believe that print media will always serve a purpose in our society, which I believe it will. And yet, digital media will not be defeated considering the cost of getting a digital message to the marketplace. Second, there is the learning curve for the printer. New software and hardware is needed, new applications have to be learned, and salespeople have to understand how to use a digital product to their advantage. Third, there is the fear factor to overcome. Fear in the customers’ mind is usually based upon the unknown of what a digital product is and how to create and use it. If ad sales reach the point whereby a printed product is unsustainable, clients sometimes look to a digital replacement, in order to keep the title alive. But clients, like printers, have to learn how to launch a digital product, the types of e-media/books available and most of all, how to sell their advertisers and make it profitable for them. They many times fail to do the simple things, like buying an iPad to learn what the craze is all about, and how it can be used for their title.

Printers and their clients have to learn to embrace digital media and determine how they can use it to make their clients more effective in their product sales and/or advertising. The alternative is to keep “kicking and screaming” until the sheriff shows up and lots of people are out of work…

As I write, I have been on hold with Adobe for 29 minutes…I had a very simple, simple question which I needed answered. In order to get that answer I had to provide my name, software serial number, email address, version of Acrobat X, version of the problem software (Firefox 5). I also had to previously wade through a menu that did everything it possibly could to discourage me from talking to a live human being. When I finally did reach a “warm body”, the usual occurred: first, the impression that I am in a boiler room in Calcutta; then interrogate me for 5 minutes to verify my identity; ask me to define the problem; rifle through papers so they can find a canned script to fire back at me; put me on hold to discuss the problem with their “service team” (code for they are clueless how to fix the problem). Then, after returning to my call, ask me a few of the same questions I already answered. Bottom line: there is no fix for the problem yet. (Firefox 5 does not allow you to create a pdf from within the browser, as it did before with Acrobat X….). He could have simply told me that in the first 60 seconds after I identified the problem, if he was knowledgeable.

In commercial printing, if you “jerk people around” like that, you are out of business eventually. Why? Because I can hang up the phone and call another printer for a price or schedule or design help. Customer Service is very important for survival in this age of printing. In some cases, it is the only thing that separates you from your competition.
What about quality? Everyone prints well these days…
What about service? Deliver jobs in 3-10 days or your shop will quickly be empty.
Price? This industry is so cheap already I am amazed at pricing levels. With technology, prices have plummeted. A job that would have cost $10,000 in 1980 will now cost $3,000. Name me another industry where you charge 70% less for your product and you still survive (maybe electronics?).

Treat your customers well, and they will come back…and your customer service can be the difference maker, and possibly the only thing that separates you from your competitors.

Tuesday, January 18, 2011

The owners of North America’s two largest makers of coated paper are discussing a deal that could result in one of them having a significant ownership stake in both manufacturers, according to a published report. NewPage’s owner, Cerberus, and Apollo Management, which has a controlling interest in #2 maker Verso Paper, are discussing what to do about NewPage’s high levels of debt, PPI Pulp & Paper Week reported recently. Apollo is also the largest holder of #1 NewPage’s $800 million second-lien bonds, the publication said. “One mutually beneficial scenario could see Cerberus retaining a diluted equity stake by sharing ownership… with Apollo through debt equitization,” the publication said. “Debt equitization” means debt held by Apollo would be converted to an ownership stake.
Apollo’s apparent “loan to own” intentions for NewPage came to light early last year when it and two other hedge funds snapped up more than 50% of the second-lien bonds, apparently under the assumption that NewPage’s inability to make debt payments would eventually give them control of the company.
Magazine publishers, printers, catalog companies, and other major buyers of coated paper would certainly cry foul if two companies controlling more than half of the continent’s coated paper capacity tried to merge. But it’s not clear whether Apollo would trigger any antitrust alarms if it obtained a sizable equity stake in NewPage by swapping debt for equity.
Analysts and industry executives have touted consolidation as the path to reasonable profitability for paper manufacturers. The tactic has worked well in the North American uncoated freesheet market but not so well in the newsprint market. UPM is trying it in the European coated and supercalendered markets with its proposed purchase of Myllykoski.
Source: http://deadtreeedition.blogspot.com/2011/01/newpage-verso-owners-reportedly.html

After reading this article below, I was not sure I wanted to scream or laugh…or pick up the phone and ask Rep. Corrine Brown if I could have the job of adding Constitutional citations to bills, and I would ONLY charge her $285,000! I would save the taxpayers 50% ! Seriously, this is just another example of our beloved leaders being clueless and downright ignorant of what things cost. In the printing industry, no customer in their right mind would pay $570,000 for 3 or 5 lines of copy per job. In this economic climate, I would do it for free to get the job. And then to claim that there are extra delivery fees ? What ?? Politics and printing have been mixing for centuries….but ask Ben Franklin how much he would pay to set 4 or 5 lines of copy – I bet you he could tell you, which is the difference between the elitist politicians of today and one of our beloved Pennsylvanians: a firm grip on reality, unabashed honesty and the love of country.

Democratic Rep. Corrine Brown said a GOP requirement that lawmakers cite the Constitution in each bill they introduce will cost $570,000 in additional printing costs.The Florida Democrat, who is in her ninth term in Congress, said the extra costs are attributed to “supplies, labor and delivery.”
Democrats have complained about the new House GOP rule, which requires all legislation to include a citation to language in the Constitution that authorizes any bill they introduce. Democrats see the new requirement as an unveiled accusation that the last Congress exceeded its constitutional authority. Brown’s argument seems designed to appeal to Republicans. She argues the new rule will cost hundreds of thousands of dollars in Congressional Record printing costs to be paid for by taxpayers. In her extension of remarks attached to the January 7 Congressional Record, Brown said the Republican rule only requires a “perfunctory statement without explanation,” which lessens the value of including the statement in each bill. “Committees need not consider the statement, no Member will ever vote on it, and Senate bills can be considered without one,” she said. Brown reiterated other Democratic arguments against the new rule, including that it is the job of the courts to decide when Congress has overstepped its bounds.
Democrat: Citing Constitution will cost taxpayers $570K By Pete Kasperowicz – 01/10/11 12:07 PM ET

IN THIS DAY and age, most of us take it for granted that technology can make a process easier and more efficient. But sometimes it is necessary to take a step back and review if a device is delivering what it was originally designed to do. Take reverse auctions, for instance. These types of transactions were created with the intention of leveling the playing field among printers. Every print supplier is provided with the same print specifications, turnaround time and distribution details for a particular job. In theory, this levels the playing field between printers and generates the best price.

Sounds sensible, right? Then why are they becoming less popular? What is wrong with the system?
Reverse auctions—once believed to either revolutionize buyer/supplier relationships (if you were in favor of it) or be the demise of the industry (if you were opposed to it)—seem to be quietly slipping away.

In a Print Buyers Online.com Quick Poll survey conducted in May with 70 respondents, 85 percent of print buyers indicated that their companies are not using reverse auctions to award bids to their print suppliers. When compared to the results of earlier polls (conducted in 2005 and 2006) asking the same question, it is clear that reverse auctions are being used by fewer and fewer buying companies.

Our research with print suppliers generated a similar response. In a Quick Poll distributed in May, 48 percent of print supplier respondents said none of their customers were using reverse auctions. As one survey respondent volunteered, “Who has time for this ridiculous process? Where is a printer’s integrity if it keeps backpedaling every half hour until it wins a bid? If I were a print buyer, I would wonder how much I had been taken for in the past.”
With such negative responses, we thought we would share some of our members’ experiences with reverse auctions.
Not an Equal Opportunity
It’s a win-lose proposition. When it comes to reverse auctions, printers have always been more pessimistic than buyers because they typically have more to lose. The CEO of one printing company summed up his frustrations by sharing, “A few of our clients have experimented with reverse auctions and found they reduced what was once mutually beneficial business relationships down to a commodity level. Our clients either stopped using the auctions because they didn’t work, or we stopped participating in them and resigned the account.”

Another printer agreed: “We will not participate in reverse auctions. What the buyers gain in savings, the suppliers lose in profit. If your only requirement is to get the lowest price, then we are not your printer.”
Bids are not always honored. Although auction rules mandate steep penalties when a bidder backs out, it still happens. Sometimes the prices end up so low that they aren’t realistic. This forces the printer to either cut corners on their print project or lose money on the job.

Pricing is suspicious. Both buyers and suppliers are skeptical about the prices generated through reverse auctions. One print buyer said, “Some printers will simply find a way around the promised quote and look for ways to increase their margins. The final price is often much higher than the original quote.” A printer concurred: “I personally have found the customer really does not get the best pricing. In fact, it usually is about 20 percent higher than if they just had several people bid on the project without seeing what each vendor estimated.”