The first part of our services on “Instruments of strategic future planning” addressed market analysis and reports that from experience, companies in general and particularly printers are better informed about their own organisation than about their market setting.
Unfortunately this only rarely means that these companies have adequate or even optimal knowledge about their own organisation.
Yet this knowledge is also vital for the competitiveness, thus the future viability, of all printers, regardless of whether they make their money with web offset, sheetfed offset, digital printing or any combination of the three.
There usually are many understandable reasons for the often less than optimal information situation. Primarily the time a thorough analysis requires. Yet it is the experience of Apenberg & Partner there is a very clear connection between the scale of the time and other things this type of analysis requires and how often this type of analysis is conducted: the less the subject is addressed, the more complex the next (or even the first) round of the analysis will be – and vice versa.
The same applies to how the analysis is performed: the more time is invested in automating the analysis to the greatest extent possible, the less time recurring rounds will later require.
And yet investing the necessary time and other resources once often results in handling day-to-day business remaining or becoming the focus, with this priority in the worst case resulting in a company continuing along a path without future potential in their daily grind instead of recognising and utilising potential opportunities early.
In their project work, Apenberg & Partner again and again sees companies more or less without direction taking the road they have “always taken”. Yet the initial obstacle of the implementation effort would be comparably easy to manage. Typically, clearly committing to the goal and establishing the respective project will suffice.
It has further been our experience the respective employees rarely pose a problem, after all they also have an increased interest working for a future-proof company. Communicating their intentions well, however, is key in this respect. The fact this communication will be clearly easier in good times than in bad is another reason not to keep putting off reviewing the information situation at your company.
The fact this initial obstacle can be overcome pragmatically by defining a project does not change the fact the devil is then in the proverbial detail:
• What type of information should ideally be collected?
• How and how often should this be done?
• Who should be responsible?
• Who should the information be shared with and how?
• How often should you put your reporting to the test?
• What conclusions can (and should) be drawn from the information obtained?
These brief questions are in contrast to the complexity of the answers. These depend on a variety of factors, primarily the size of your company and its teams. And yet, it is our experience there are some constants which we would like to pass along as some food for thought.
Apenberg & Partner is convinced that every businessman, ideally at all times, should be able to determine more than just their turnover, material and labour costs as well as the revenue they bring during any past period. Key figures such as the gross profit ratio, the personnel costs rate (based on the gross profit) and the company’s capacity level are key factors which are unfortunately all too often lost sight of. Furthermore, today it’s easy to set up detailed, yet concise and automated sales reporting. The same applies to generating a cost distribution sheet – using realistic performance data.
As already implied earlier, we believe it is imperative to automate individual reports to the maximum, which typically requires a set-up project. After this you then have the option to regularly send the reports to various distribution lists. So the entire sales staff can receive a monthly sales report and production management a cost distribution sheet as the benchmark. The executive board receives both, along with the business assessment. The respective recipients are then able at all times to generate the respective analysis for any period from the system.
With respect to revising the reporting you should review at least once a year whether the performance data in the system still matches the current production (for example: whether you still have two shifts or now have three shifts). At this time you should also review whether all company cost centres are included in the cost distribution sheet or e.g. new machines have been added.
This data can then be used to answer a number of questions. For example, whether every machine is actually performing to capacity or as needed? Or, whether your “best customers” in fact make the biggest contributions to the result? (You wouldn’t believe how often Apenberg & Partner has seen that supposed best customers may have the biggest turnover yet unfortunately bring zero or even negative results.) Who among your sales staff is most successful with respect to business from new customers and has lost the least existing customers – you can then also systematically get to the bottom of the respective causes.
Although the list of questions you are asking yourself and can answer yourself is much bigger, for starters you are already in a good position if you regularly address these topics. Apenberg & Partner estimates that currently only about 20 percent of all companies in our industry do so. Interestingly, packaging printers comparably have an easier time doing so than job printers, although online printers are a remarkable exception in this respect based on their business model.
Regardless of how you approach the internal analysis of your print shop, be sure to regularly review your position. Although it’s common knowledge that for most people it’s extremely difficult to ask themselves unpleasant and challenging questions, doing so is well worth it.
Expect resistance initially, for example defence mechanisms such as the TINA syndrome coined by Margaret Thatcher, meaning “There is no alternative”. In Germany this is often seen in the dreaded “that’s how we’ve always done it”. Don’t let these attitudes within your company knock you off course to put your organisation to the test – after all, it’s about the future viability of your print company.