Celebrating Printing Industry Midwest Day!
May 17th was Printing Industry Midwest Day at Printing Industries of America! To celebrate, the staff sported shirts with designs printed by our midwest members. We are proud of the variety and quality of shirts we received and are thankful to have such talented printers as members of the Printing Industries of America. To see more photos visit our Facebook...
read moreBe Involved with the Integrated Print Forum!
Yesterday we announced our newest conference–the Integrated Print Forum. It’s a new type of conference that focuses on integrating interactive, dynamic media to print. In the vein of this conference, we’ll be employing dynamic media to communicate with our audience. To make this a success we want you to particpate and there are a number of ways for that to happen. Visit Formspringand leave us a question about the conference. It’s a simple way for you ask questions and for us to answer them. We’ll be answering those questions on our Integrated Print Forum blog. Speaking of which… Visit the Integrated Print Forum blog for updates that include audio, video and news on the conference as it develops. There are also discussions forum you can be a part of! You can like the Facebook page, where we’ll be having a Q&A and we’ll upload photos/videos that will pop up in your Facebook feed. Talk about convenience! Reserve your seat on our Eventbrite page. we’ll hold a seat for you for a brief amount of time and you’ll also be able to see who else is coming to the Integrated Print Forum! And, of course, you can tweet to us on Twitter – @printind. We look forward to interacting with...
read moreJDF Product Certification Reaches 50th
Avanti’s Graphic Arts Management System v12.2 passed stringent testing by the Printing Industries of America to become the 50th product to be certified by the CIP4 organization. The Avanti Print MIS software was specifically certified for its ability to facilitate automation by electronically communicating with prepress equipment using Job Messaging Format (JMF) communications while transferring the appropriate JDF requirements for prepress workflow completion. There are 17 additional companies who have shown JDF/JMF integration specialties in multiple ICS documents and JDF versions. A complete list of certified products is online at http://www.printing.org/jdfcertified. More information on the certification process can be obtained by contacting Automation at 800-910-4283 ex 787 or...
read moreHow Can I Stay Profitable Even When Sales Decline?
The Following is a special guest post from Stuart Margolis CPA, MT. The answer: Well-managed companies can react to dips in sales appropriately and ultimately sustain profitability. Whether we have historically managed our companies well or not, all of us are looking for creative ways to stay in the black for 2011. We watch our ratios since solutions might be found in our own strategic tactics. Understanding the value and use of ratios enables managers to gain a better understanding of the behavior of costs. They can be good indicators of possible manufacturing strategies that can lead to a competitive advantage and help maximize profits. An example can be seen in the relationship between sales and profits. Here is a scenario to demonstrate the effect of a decrease in sales, its impact on variable costs, and its impact on contributions to cover fixed overhead costs. Let’s take a look and see why watching ratios is a common practice among well-managed companies. A printing company’s sales went from $1,000,000 sales in year A to $800,000 in year B (a decrease of 20%). Materials decreased proportionately so value-added decreased by the same percentage of 20% or $134,000. The variable overhead cost also decreased by the same ratio, with fixed costs remaining the same as in the previous year. Income decreased but did not disappear completely. Year A Year B % of Sales Sales $1,000,000 $800,000 100% Materials 330,000 264,000 33% Value Added 670,000 536,000 67% Less: Variable Expenses 200,000 160,000 20% Marginal Contribution 470,000 376,000 47% Less: Fixed Expenses 370,000 370,000 FIXED Income Before Taxes $ 100,000 $ 6,000 Here’s the danger. Had the printer taken his eye off the ratios, results could have been disastrous. If the decrease in cost of materials and other variable expenses were not proportionate to the decrease in sales (only decreasing 15% instead of 20%), income before taxes could have resulted in a loss of $20,500. The mere 5% difference could have pushed the company into the red. Fortunately, there’s nothing mysterious about watching ratios. Tracking variable costs as a percentage of sales has helped some of the most successful printing companies extract more and more profits from their sales. By keeping an eye on ratios, we can make sure variable costs are reacting appropriately. We can then look at fixed overhead costs and either: 1. Reduce fixed costs to a lower level or 2. Get creative and find ways to convert fixed cost into a variable cost (even if only temporarily). Want to see what ratios and margins other printers are achieving? Look no further than the Annual Printing Industries of America Ratios. The deadline to participate is quickly approaching, May 31, 2011. Printers can download the form, fill it out, and get a copy of a resulting report for free. Go to www.printing.org/ratios. If you’ve never filled it out before, do it this year. During times of drastic economic swings and fluctuations, it is critical to understand your industry and your competitors. Actually, make it a priority to fill the survey out and get a free copy of the results for the next five years. Knowledge is power. ...
read moreBlog Interview and More
Hear an interview with Adam Ostrow of Mashable Blog, where he talks about how the Mashable blog operates behind the scene. Since we have a blog that needs to find its balance, I am looking at how to make the SMFG blog more successful. I was fascinated with the fact that Mashable publishes 30 articles daily and they have 20 people working on the blog and that does not include the other contributors. It was discouraging since it is easy to see why it is difficult to keep a blog going but we (Julie and I) are planning to re-launch the SMFG blog to be more relevant and gain more people interested in the contents. If you are interested in blogs, check out the short video with Ostrow. You probably will find it very informative and worth the few minutes. Let me know what you think. http://prnt.in/Z3P Mashable is a very good example of a blog to emulate. I checked out Technorati for other blogs to review. http://technorati.com/blogs/top100 Sure enough, Mashable was #3. Huffington Post continues to rack up #1 positioning on blog ratings; www.huffingtonpost.com According to Technorati, blogs are now the new arm of the fourth estate. The 2010 State of the Technorati Blogosphere is an excellent source of information about blogs. http://prnt.in/Z3W Any blogs that you like? What topics attract you? ...
read moreJostens and Hoechstetter Share their Premier Print Awards Experience
We created a few Premier Print Awards videos to better showcase the effect that the competition can have on business. In the video below, we have past winners from Jostens and Hoechstetter discussing what winning a Benny Award means to them and how it has impacted their business. Enjoy the video and if you have any questions about the Premier Print Awards ask them in the comments and we’ll be more than happy to answer...
read moreTotal Factory Cost of Product
As promised in the previous blog, today we take an in depth look at Total Factory Cost of Product. In this entry we use two example printers, a profit leader and an average printer with $1.7 million in annual sales. In future entries we will cover mid-sized and larger printers. How much does it cost an average printer and a profit leading printer with $1.7 million in sales to produce their finished product? Total Factory Cost of Product is 8.28% less for the profit leading printer than the average printer, resulting in $140,760 in savings for our $1.7 million printer. Gross profits for the average $1.7 million printer were 19.85% compared to 28.13% for the profit leader. This significant savings provides the profit leaders with additional funds to cover SG&A, interest expenses, and other expenses and achieve a profit before income taxes of 5.93% compared to a loss of 4.23% for the average $1.7 million printer. Profit leaders with sales less than $3 million averaged profits of $87,779 while the average printer had a loss of $79,778. The significant efficiencies that the profit leaders achieved in producing their product added to their bottom line and helped them remain profitable in 2009 despite the recession and declining sales. How much more efficiently does the profit leader work, and where are most of the efficiencies realized? As mentioned above the example profit-leading printer’s Total Factory Cost of Product is 8.28% or $140,760 less than the average printer of similar size. The next question is how they achieve these efficiencies. In the first line item, “Paper,” profit leaders on average spend 1.87% or $31,790 less. Some reasons for this variance include the average printers: Purchasing polices need adjustment. Improper control of waste and spoilage. Proper handling of paper is extremely important in all phases of production—shipment, storage, pressroom, bindery, etc. The type and quality of paper required by the jobs that this group of average printers produces could have an adverse effect on paper costs, as could product mix. Selling price could be too low. The effective manager will investigate these areas to find out where the problem or problems are occurring. If the manager can take corrective action, the amount of money being spent on paper will decrease. If the problem is beyond his control and cannot be corrected, he will at least understand the reasons for this high paper cost. Under “Total Other Chargeable Materials,” the profit leader printer spends $13,000 less on outside printing and $10,000 less on outside binding, which reduced their total factory cost of product by 1.37%. This may be because they have more in-house capabilities or are getting better rates from outside providers. About 30% of profit leaders’ efficiencies in driving down costs comes from the above mentioned material costs. Next we take a look at Factory Payroll and Factory Expenses. Labor costs are always a large percentage of graphic arts sales. Because labor is so costly, management has to watch it closely and control costs tightly. Total Factory Payroll as a percent of sales is 2.40% or $40,800 less for the profit leader in this example. To lower total factory payroll, as a percent of sales, review the following checklist to identify possible causes for increased costs. Is there a good, working system in...
read moreA Look At the Japanese Printing Industry
Last week Printing Industries of America was honored to once again host a delegation of Japanese printing executives to our headquarters building. During our visit, we exchanged information on our respective economies, outlooks for our industries and hopes for the future. We naturally began our visit by expressing our deepest sympathies and concerns over the recent tragedy inJapan, extending our best wishes for a return to normalcy and health for all citizens of the country. Our Japanese friends painted a bleak picture of their industry which in many ways mirrored the conditions we have experienced during the recent recession. They note that their industry peaked in 1997 due to a larger population, rapid economic growth and an increase in information circulation whereas it is now faltering because of an aging society and diversified media. In 2008 there noted a paradigm shift in their industry that they attribute to three things: the fall of Lehman Brothers; an initiative by their Prime Minister, Yukio Hatoyama, which aims to cut down 25% of CO2 emissions; and the revolution of electronic devices like the iPad. Ink, paper, and printing industry shipments reached their lowest point in 2009, but they are bouncing back despite the low demand for print. By 2020 the Japanese hope to emerge a leaner industry. This will mean fewer overall printers doing more printing. While commercial and publication printing is wavering, packaging, specialized, and label printing will maintain a viable option for businesses going forward while software service will see growth. The parallels to the American industry in this regard are startling. Like many printers in America are becoming “marketing service providers,” Japanese printers have taken notice and are shifting to becoming “solution providers” themselves although it is important to note that culturally the way goods are marketed in Japan are somewhat different than here in the U.S. The view solution providers are printers who solve the problems clients and society have by using technology and knowledge. Printers that adapt to new technology, offer a wide array of services, and diversify themselves will be the ones leading the industry in the future. The same of course can be said here in theUnited States. Needless to say it was a fascinating exchange and we are grateful and honored to have hosted Kenichi Soma, Atsuyoshi Kimura, Masato Usuda, Hiroyuki Shimamura, and Chie Ohlsson to Pittsburgh. Our thoughts and prayers go out with them as they continue to deal with the tsunami aftermath. If you have any questions for our visitors, please leave a comment on this post. Once we have a few we’ll post another blog with a Q&A with a member of the All Japan Federation of Printing Industry Associations....
read moreContinuous Improvement Videos
The 2011 Continuous Improvement Conference recently came to a close (we’ll have a wrap-up of the conference coming soon!), and if you weren’t able to attend, don’t worry, we have you covered. We recorded a series of videos focusing on the fundamentals of continuous improvement and operational excellence. Embedded below, you’ll find videos that answer some of the basic questions like: How to budget for Lean transformation, why Lean, and what metrics need to be measured. Let us know what you think of the videos in the comments below. ...
read moreContinuous Improvement Videos
The 2011 Continuous Improvement Conference is happening right now in Kansas City, Missouri and if you couldn’t make it there year, fear not, there’s still learning to be had. We have a series of videos entitled “Ask Ken: Operational Excellence for Printers” that answer some of the fundamental questions about lean and operational excellence such as why use Lean and how to budget for Lean manufacturing. While it’s not the same as attending the conference, we hope you find them full of information. We’ve embeded the videos in this post so you can watch them at your leisure. Let us know what you think in the...
read more