Publishing Cost Management

Comment by Bert N. Langford on November 27, 2011 at 3:12pm

Example of topics I (and others) can contribute to in future postings:

 

1) How to perform a break-even analysis at what quantity a press form (or other other pricing component) becomes less expensive.

 

2) How to optimize to the least print manufacturing, material and distribution costs through time-and-event closed loop budget-planning.

 

3) Buying tips in a supplier market.

 

4) How to budget newsstand vs. postal expenses in the least time yet most accurate manner.

 

5) How to master Excel workbook design including VBA to create and monitor budgets, estimates, invoice reconciliation, Production Schedules and other Production-related functions.

 

6) The advantages of using magazine-specific mapping and other production planning software (globally, also referred to as "flatplan" software).

 

Etc.

 

Bert Langford

Comment by Bert N. Langford on December 3, 2011 at 1:29pm

Into the 2nd week of this forum now without any other followers. That's okay, it is just freebies from an 40 year veteran on print cost management to help production folks deal better with their printers as well as formulating and maintaining best practices in their print manufacturing planning.

Topic of interest today is using the original posting (above) in terms of creating a compelling Request for Proposal (RFP) when bidding out your magazines to the printing marketplace. This part: preparing the comparative analysis between printers in Excel.

(We will cover other parts of the RFP in later posts including the all important covering letter that sets forth the objectives for each printer  of what your company wants/expects of its printers: pricing and format, its manufacturing (including electronic) capabilities, and many more requirements/benefits that will both challenge and attract the printer to your account

The above when laid out into a comparative printing model loaded with formulas in Excel is likely your first step after you define what you want in the RFP covering letter draft of what you want, need and expect, AS WELL AS what your work can positively mean to the printers. (The RFP is a selling tool as well.)

The model can be repeated left to right so that every printer has its own columns of comparative set pro forma billing makeup itemization according the normal approach printers use to invoice your work: To far left, itemized description, then sub-columns by printers of Units, Quantity, and Rates (M/R and P/M) then Line Item Total: Then next set of printer columns (I usually recommend going out to six to eight printers (due to the contracting printing marketplace), so you need enough columns for printers to fill in the rates under their set of columns, as you will provide them the (partially locked) M/R and P/M rates.

Try to model at least three issues per monthly (or greater frequency) magazine (large, small and average, usually on page count), but also to cover unusual yet repetitive print complexities, e.g., slow-down penalties if any.

Also break out in line item rows first items for pre-press (including any ad portal charges), presswork/plates, ink, and finishing: Excluding ink, these form the "Value-Added" portion that the printer (can include paper markup: see how printers define their value-added work, as usually their estimated cost of ink and paper are NOT included))

So columns across for printers and itemization down for each pro formaed model. Start with printer's rates as presented, total that, then apply % escalation/de-escalation per impacted item (usually printer's Value-added, then ink, paper stock and finally distribution (newsstand shipping, subscriber postage, and a miscellaneous shipping/postage amount that averages the expenses not otherwise covered for distribution.)

There can be other bottom line adjustments: for over/under print order allowances, any payment discount you plan on taking, outside buyouts, etc.

The main point is you must understand the work you are receiving in return for the price you are paying to each printer. Usually for this and in comparatively assessing each printer's capabilities I create as a RFP exhibit a Capabilities Comparator for a capability-by-capability comparison of printers, including all business transactions (like payment terms and overs/unders).

If you would like an example of the comparative pricing analysis or the capabilities comparator, email me: bert@pubresource.com.

More on the above subject, later.

Bert Langford

Comment by Bert N. Langford on December 18, 2011 at 4:22pm

I should let any readers know that ProAct, the total cost management system (it is more than a software product) is available for qualified publishers looking for more proactive and hands-on planning and management of their print manufacturing and distribution direct cost centers.

Email me: bert@pubresource.com, for more information

Bert Langford

Pioneer User of PCs in 1981 for the magazine publishing marketplace. Also published the first article in Folio: for using PCs in publishing operations in August, 1984. Foremost expert of optimizing direct profits for magazines.

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