The recent ‘bloodbath of a budget’ containing painful tax hikes and drastic public spending cuts is a testimony to the severity of the current economic situation. Whilst early signs of an exit from recession are welcome, the threat of a ‘double dip’ return to a downturn is never far away. The intense pressure on companies to manage their costs much more aggressively is leading to the emergence of new ways of operating across multiple business areas. One such discipline is intelligent print sourcing and when managed strategically it can offer some significant benefits.
As the print market has matured and the sophistication of clients’ requirements has increased the traditional print broking model has become unsustainable. Organizations that use procurement partners who go to market tactically and simply seek the best quotes on a project by project basis are losing competitive edge both in terms of high costs, weak management information, inconsistent supplier management and poor decision-making. The trend now is one of entering into long-term strategic relationships with vendors who can implement much more comprehensive sourcing models that leverage economies of scale and also utilize technology to ensure that timely and well informed purchasing decisions are made.
The three critical success drivers to achieving intelligent print sourcing are scale, market intelligence and technology.
SCALE
It is a well-established economic principle that the more a business procures of a particular product then the lower the unit cost will be. This is due to the value derived from economies of scale and from the leverage that can be extracted through competitive traction. Scale on its own, however, is a somewhat crude tool as it is not possible to extract full commercial advantage without a detailed analysis of the constituent components which represent the whole.
Historically, organizations operating in the print management business space have struggled to deliver full value from their clients’ print spend as volumes have remained largely disaggregated, and managed and procured using an account based transaction methodology. By capturing all print spend across the business and aggregating common spend down to the lowest granular level possible within each print profile it is possible to begin to extract the real value inherent in leveraging scale.
MARKET INTELLIGENCE
The second key driver to deliver world class sourcing is market intelligence. The application of relevant experience and knowledge ultimately delivers best value through the identification and management of a supply chain that will provide the best fit at a job, client or contract level. By leveraging this knowledge network, emerging technologies can be identified and accessed, investment programmes across the third party supply network can be tapped into and best of breed supply chains can be established.
TECHNOLOGY
E-procurement technology can effectively manage specifications, estimating and orders within a sourcing workflow enabling on-site teams to connect with the company’s third party supplier network for all procurement services. An e-procurement solution enables buyers to input specifications and volume data easily and quickly to determine the most cost effective production method, using centrally pre-negotiated negotiated framework cost rates. This matrix approach leverages capacity amongst accredited print and paper suppliers.
SUMMARY
Today’s tough economic climate is focusing organizations’ attention on new ways of operating to deliver significant cost reductions. Only by implementing aggregation methodologies, applying the best market intelligence, utilizing leading edge technology, and adopting a more sophisticated approach to procurement can organizations truly benefit from an intelligent print sourcing strategy.
RR Donnelley Global Document Solutions
