The traditional printing industry in South Africa is under strain. Digital is taking more and more market share of what was traditionally print media, and South Africa is seeing one printing company close after another in the printing industry, as well as leading newspapers and magazines closing over the past decade. People are turning to the internet for news and information.
A recent Global Media Report by McKinsey & Company shows that “spending on media continues to shift from traditional to digital products and services at a rapid pace. By 2019, we believe digital spending will account for more than 50 percent of overall media spend…. As it continues, it will not only expand the digital share of the media wallet, but have a structural effect on almost all media sub-sectors, redefining business models.”
Digital is not the only challenge facing the printing industry in South Africa. Finding skilled resources that are affordable and available is a challenge, as well as general wastage costs and poor business information management. If we don’t plug the holes of this leaky ship, your printing company could end up on the endangered list.
Thankfully, the printing industry is here to stay. Digital media cannot replace the labels on your food in the grocery store, or the latest printed garment in retail, or the magazines at the hairdresser, or the packaging the awesome things are housed in.
The challenge then is not to replace your printing company with something else, but to run your printing business optimally in order to survive the shift, and to outlast your competitors.
Four Opportunities for Innovative Thinking for the Printing Industry in South Africa
Skilled people are an asset you want to invest in. They are the most important product you actually have to offer your clients. Nothing can compare to years of experience or to a great attitude and solid work ethic.
If we are going to avoid the ‘continental shift’ to digital media, we need to update our thinking and the way we do things. Yes, it was fine to have expensive skilled people do all the quoting because they’ve done it for years and have invaluable industry savvy. But there has to be a smarter, leaner way:
- Expensive Estimator Salaries:
Most printing companies pay a considerable amount to estimators, just to do quotes. To lean up:
- Consider training two or three younger people as ‘interns’ under your expensive resource so that you have a renewable, more affordable plan for the years ahead.
- It’s time to update your software. If you are still using spread sheets to manage your quoting, you need to move your business out of the 80’s in order to gain competitive advantage. We use the QuickEasy Business Operating System (BOS)– integrated business software customised especially for the printing industry, which allows for a more junior (more affordable) person to handle quotes, because the system provides functionality that prevents estimators from making mistakes.
- Unreliable Sales Reps:
Sales people’s basic salaries are quite pricey. Printing companies usually hire them on a three-month trial basis after which either party can decide to stay or move on. However, when a sales rep leaves, they usually take all their contacts and leads with them. This is a challenge.
- Log Book: Ensure sales reps complete a log book with contacts, visits, follow ups, etc. Either this needs to be a daily email, or written in a ledger. However, this method can be rather inelegant as it is manual and uses un-integrated systems like spread sheets or a book. It also depends entirely on people’s honesty, and will probably not be easy to track.
- Systems: Updating the business’s operating systems with software that includes a sales rep activity tracker, contact sheet and time log will help show the effectiveness of the sales teams, as well as keep the lead sheet under the ownership of the company, whether the sales rep stays or leaves. Plus, with the follow-ups being logged in the system, follow ups will never be missed again.
A substantial percentage of printing companies’ turnover is spent on purchasing material – paper especially. Printing companies need to compare supplier prices constantly in order to purchase the best price and run at optimal levels, otherwise, you stand the risk of under-quoting or over-paying.
- Compare Constantly: Assign a resource to constantly compare prices in order to have the latest price lists available. However, this could be a poor utilisation of resources if the team is short-staffed and under pressure.
- Work Smarter: We love QuickEasy Software for this: They update the price lists whenever they change and printers can upload them into their system, so that – no matter what the job – they have the latest paper prices from all the major suppliers instantly available to make informed decisions on. If printers can save only 2% on purchasing, the outlay on a QuickEasy subscription is justified, and owners find they can run their businesses better.
3. Overtime Vs Downtime:
If anything stands idle in a printing company, it is costing the owner money. Whether it is the printer waiting for a delayed job, and not producing value (downtime) or whether a job is delayed and people are standing around waiting, causing overtime to kick in when the job does become active idleness is the enemy of printing companies.
- Improve Communication: Ensure communication with your client and your suppliers are streamlined in order to reduce downtime and overtime.
- Improve Contracts: Ensure that your agreement with your client covers whatever delays that might be caused from oversight on their part.
- Improve Systems: A single-view planner will help you allocate queued jobs and idle resources with ease.
4. Reporting and Costing:
Many printing companies in South Africa are running this part of their businesses blind. When you have estimated material costs and the time cost needed to complete the job, have you measured the actual costs against what you have estimated?
- Estimate Accurately – If you are not sure what your material, hourly and capital costs are, you are probably either under or over-quoting. If you come in too low, you stand the risk of losing money. If you quote to high, you stand the risk of losing the client.