http://www.rhrosen.com/randomrosenisms/ Quick ideas on improving your business from RHRosen.com. en Copyright 2008 Sun, 17 Feb 2008 12:23:57 -0500 http://www.sixapart.com/movabletype/ http://blogs.law.harvard.edu/tech/rss Let’s look at an example: A printer selling a six-color press for $375 per hour cut his average make-ready time by fifteen minutes, cut his average wash-up time by ten minutes, and increased net running speed from 8,500 to 9,000 sheets per hour. In a two-sided 7500 sheet work-and-turn form, this reduced average production time by almost exactly one half hour (twenty five minutes in set-up and wash-up, plus about five minutes in running time). When the shorter production time was used for estimating, the half-hour time saving was passed along to the customer – until the estimating hourly rate was increased to reflect the higher productivity. At the old hourly rate of $375, the customers were accidentally saving $188 on the cost of presswork, because the time for producing the two-sided sheet was reduced from 3.5 hours to 3.0 hours. Only when the estimating hourly rate was raised to $440 did the price for the presswork stay the same – $1318. We know that everyone is facing relentless pricing pressure, so if you have to lower your prices, go right ahead. And if your productivity has improved, you have plenty of room to lower prices. But be sure you’re doing it on purpose, not by accident! After all, customers don’t need any additional help in forcing printers to lower prices, and printers need all the help they can get in building profitability. If you’d like to have a tool for evaluating the effect of productivity changes on pricing, just e-mail us and we’ll send you a small easy-to-use EXCEL file that shows you how much you can (and should) charge for press time if you change your productivity standards. There’s no charge. ]]> http://www.rhrosen.com/randomrosenisms/2008/02/dont_give_away_your_productivi.html http://www.rhrosen.com/randomrosenisms/2008/02/dont_give_away_your_productivi.html Sun, 17 Feb 2008 12:23:57 -0500 can influence their behavior. That’s why it’s so important to manage the process of customer press approvals from beginning to end – from scheduling to choreographing every step of the process until the customer has signed off and left happy. Okays go much more quickly if you manage the process properly, so your press schedules won’t get blown away (as frequently) by long customer approvals. Schedules are improved and customers are happy -- two nice payoffs. But there’s an even bigger payoff if you get it just right. When printers show their customers how well they manage the process of matching proofs, many of those customers stop coming for okays because they’re no longer worried about the way the printer produces color. Yes, it’s true that designers and agencies are paid to sign off on jobs, and they rarely miss an opportunity to see a job on press. But a surprising number of corporate clients quickly find other things to do and stop visiting the printer for press okays. In fact, we’ve seen a number of printers cut their number of customer press approvals in half. Yes, in half! Profit leading printers are using press okays to build customer confidence in their processes, while improving their productivity and helping their scheduling. It sounds too good to be true, but you should give it a try! If you’d like to have our Six Rules for Managing On-Press Approvals, just e-mail us and we’ll send you a WORD file. There’s no charge. ]]> http://www.rhrosen.com/randomrosenisms/2008/02/managing_customer_press_approv.html http://www.rhrosen.com/randomrosenisms/2008/02/managing_customer_press_approv.html Sun, 03 Feb 2008 12:45:02 -0500 X dollars of sales and Y dollars of expenses. It doesn’t care how you got there. It just wants more sales than expenses. One printer had terrific pricing discipline and was generating almost 70% in average value-added content. But they were very fussy about the work they took, and when sales dropped unexpectedly, they didn’t replace the higher-priced sales with any other sales. Their inside costs remained highly fixed (except for saving a few dollars in sales commissions) and the lower sales fell directly out of their profits. Yes, they still had beautiful cost sheets, but their income statement grew a few big scars. The single thing that sets the profit leaders apart is how busy they keep their plants. They know that you can never make up for having too little work, no matter how good your pricing may be (and no matter how good your productivity is). So they sell everything they can at high prices, and if they have any capacity left, they sell it at the highest prices they can get. But they make sure to sell it. They may wind up with some homely cost sheets, but they also have much better-looking financial statements. PS: You can match your income statement and cost sheets, but why bother? Hourly rates reflect a guess as to how many hours will be sold in a given time period, and printers use those projected hourly rates to absorb the fixed costs for that period. In a quiet month where fewer hours have been sold, the actual hourly rate would be higher, since there are fewer sold hours to absorb the same costs. Of course no one figures their hourly rates every month, but if a slow month’s cost sheets were adjusted to reflect that month’s real hourly rate, they wouldn’t look good at all. They would look just like the income statement. So you can match your income statement and cost sheets, but why bother? In fact, any printer who goes to the trouble of doing so probably isn’t spending enough time selling jobs and figuring out how to produce the work quickly and profitably. ]]> http://www.rhrosen.com/randomrosenisms/2008/01/how_come_we_made_money_on_all.html http://www.rhrosen.com/randomrosenisms/2008/01/how_come_we_made_money_on_all.html Sun, 20 Jan 2008 08:02:45 -0500 GET YOUR ESTIMATORS TO STOP PROTECTING THEMSELVES! We can almost guarantee that many of your quotes are too high. Why? It's not because you've decided to raise prices. It's because your estimators think they're protecting themselves (and the plant) by building a cost cushion on the jobs they’re quoting – especially large or complicated jobs. Why are they doing it? One reason is that most estimators are risk-averse, and some jobs make them nervous. Another reason is that estimators only hear about their estimates when there's a cost overrun on a tricky job. So if they always get whacked on the left side of the head, isn’t it normal for them to begin leaning just a little bit to the right? The cushion may not hurt you on some jobs, but we can promise that you're accidentally losing some really competitive jobs that you should be winning. When your estimators play it safe to protect themselves, they're not protecting the company. Quite the opposite, they're costing you the opportunity to win some jobs that you should be getting. Yes, your cost sheets might look pretty good, because it's hard to lose money on jobs you don't get. But more to the point, it's impossible to make money on a job you don't get. Yes, the estimators won't get beaten up over cost overruns on those jobs you haven't gotten, but your plant won’t be as busy as it should be, and your income statement will show a big hole... The cure is simple: convince your estimators not to play it safe. Set a clear standard for them to follow:

• Figure out the most likely costs to produce the job. Play it right down the middle: no cushions and no playing it safe.

• You figure the costs, we’ll figure the price.

Then you have to act as if you believe what you said, and stop beating up your estimators over cost variations on individual jobs. Twenty years of experience has shown us that if you continue to beat them up, they’ll go right back to protecting themselves and hurting you. ]]> http://www.rhrosen.com/randomrosenisms/2008/01/two_estimating_secrets_1.html http://www.rhrosen.com/randomrosenisms/2008/01/two_estimating_secrets_1.html Sun, 06 Jan 2008 14:22:47 -0500

What’s going on in sales? How’s quoting activity? How about orders booked, and sales projections for this month (and beyond)?

• How’s the plant doing? How busy are we? Do we have enough work for the plant? Are we productive, or just looking busy?

• What’s going on with our finances? How’s our billing? How about collections? What about borrowings against the line of credit? What do this month’s financial statements show?

We’ve developed four discussion outlines that CEO’s can use in structuring weekly and monthly discussions with their top executives in sales, manufacturing, production / customer service and finance. Dozens of our clients have put these discussion guides to use. The outlines are built around a few key pieces of information that virtually every company has lying around in some form or another. We’ve also developed a series of discussion outlines specifically for the managers of your various plant departments. If you’d like to get the outlines, just e-mail us a request. There’s no charge.]]> http://www.rhrosen.com/randomrosenisms/2007/12/meaningful.html http://www.rhrosen.com/randomrosenisms/2007/12/meaningful.html Sun, 09 Dec 2007 12:49:06 -0500

• When did a job come in exactly when expected? Or earlier?

• When did proofs come back exactly when expected? Or earlier?

That’s why your production manager has to have a simple rule: Just say YES to that extra job Here's why: a hole will almost always open up in the schedule. It’s not random. It happens every day. After all, customers don't have complete control of their own jobs. And if a hole doesn't open up, it's still pretty easy to fit in one more small job. What if that extra job is somewhat larger? Then it’s even more worthwhile figuring out how to staff some more hours or juggle schedules! Of course, we’re not suggesting that you make irresponsible promises, or just pile problems on to the production manager. But you should have a bias for saying yes and working hard to figure out a way to do it without breaking other promises. Even if you find yourself truly overloaded, when did anyone die from putting in some extra overtime to keep up with the workload? In Texas, that’s what they call a high-class problem! Having worked with more than 550 companies, we’ve never seen a printer die from trying to fit in too much work. But we’ve seen lots of them shrivel from too little work. So just say YES to that extra job. We promise you’ll figure it out.]]> http://www.rhrosen.com/randomrosenisms/2007/11/want_more_business_just_say_ye_1.html http://www.rhrosen.com/randomrosenisms/2007/11/want_more_business_just_say_ye_1.html Sun, 25 Nov 2007 13:43:04 -0500