Print buyers speak

The fourth annual Print Oasis conference for the print buying and specifying professionals had more than 700 in attendance May 22-25 at the Hyatt Regency in Chicago, Sponsored by Print Buyers Online.

Suzanne Morgan, President of the PBO e-community, spoke on the Trends in Print Buying as reported from a recent survey involving 265 print buyers. With a five to one leverage (increase versus decrease) half the respondents expect print purchases to increase in the next six months. Fourteen percent of the firms have bought less than 5% of their total print requirements from overseas. Most of these were experimenting with the global sourcing opportunity. When asked to describe the most effective buying practice for their companies, 77% reported “establishing partnerships with a core group of print suppliers.” Morgan remarked that the most significant trend indicated from this survey was that 47% of print buyers reported consolidating their print procurement among fewer print suppliers.

Print Oasis 2005 also had its largest number of exhibitors at 64 with more than 40% of them first timers. Two of these print vendor exhibitors had unusual offerings that serve the global print buying market.

The Johnson Group, headquartered in Illinois and having five midwestern general commercial plants, discussed a strategic alliance they have had for over a year with a printer near Shanghai, China. They have two Johnson Chinese national employees on site and another two Americans who make frequent trips to China to coordinate major projects. A typical Chinese printed project is the collateral materials that would be inserted in the packaging for goods manufactured in China for export to the USA. The owner and designer of the goods is an American corporation for whom the Johnson Group provides much of their stateside printing and fulfillment needs.

The largest printer in Latin America, Posigraf Printing & Publishing Company from Brazil was an exhibitor. An ISO 9001/2000/14000 certified supplier, this high quality printer touted PDF workflow via worldwide FTP transmission. While they offer general commercial printing capability, their niche is signature products produced primarily via a battery of 8 web presses. Their primary client is their sister division, the Positivo Educational System, which is a network of 2,200 affiliated schools throughout Brazil. When asked what benefit he offered USA publishers, sales representative Ricardo Salini Abrahao responded, “Quicker delivery (than the far east) at China prices.”

Consultant Dick Gorlick offered tips and guidelines on structuring supplier relationships. He gave a series of reasons why printers lose accounts as reported by a recent survey. Here are five in the list: (1) general buyer frustration at something the printer thinks is small, (2) not being dependable, (3) pricing inconsistency, (4) slow and incomplete estimates versus the current 24 hour standard and (5) slowness of billing. He reminded the audience that the billing practice of advertising agencies of not paying their bills until their clients pay them is called “sequential liability” and it is not legal.

While Gorlick advised against reverse auctions, he asked the audience if they could report any successful print reverse auctions. A number of hands went up but here are the experiences of two. John Coudriet, Print Procurement Manager of Nationwide Insurance in Columbus Ohio, responded that his firm currently spends $50 million annually and has successfully used reversed auctions on 1,300 reprint projects valued at $50 million over the last 18 months typically realizing 40% savings in their first effort.

Mike Kontek, Allstate’s Procurement Governance Sourcing Manager, also reported unqualified success buying repeat print via reverse auctions. Because of the overall 40% savings realized, their firm has decided not to rebid many of those same projects for several years or until the designated supplier cannot hold his prices due to inflationary pressures. In other words awarding substantial volumes in exchange for the windfall cost savings to proven solid vendors. Another Allstate procurement consultant Ron Mitiu stated that Allstate’s early overwhelming success with print reverse auctions has led to more complex, multi-color, variable data projects involving higher value transaction printing documents.

Joe Duncan, Vice President for Print Innovation & Technology for Chicago’s Leo Burnett USA, gave a keynote presentation based upon his firm’s strategic transition in realigning their print resources.

Leo Burnett became the first and remains (for the third year) the only advertising agency print department in the world to be ISO 9001/2000 certified. This has led to a credible effort at continuous improvement. This has been the cornerstone for standardized digital workflows to assure timely and great execution across the potpourri of pre-qualified vendors.

Embracing color management and profiling, Leo Burnett works with the fingerprinted presses of its approved vendors in establishing a Burnett Color Curve. They buy $25 million of paper directly from mills and realize volume-buying rebates eliminating the 10-15% paper distributor mark-up.

Duncan says that they are targeting a 10% reduction in print costs each year by providing digital asset management (DAM) services and pursuing virtual proofing.

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