IPMA Preview: New Strategies to Increase Your In-plant’s Performance
As I write this, I'm finishing up a presentation for the upcoming IPMA conference, taking place in Denver from June 20-24. My presentation will focus on strategies to improve your in-plant’s financial performance.
Of course, no presentation about financial performance should start without talking about the importance of understanding your costs. Why? Because, costs impact prices, and in my experience less than half of all companies have up-to-date costs.
Still to this day, I am surprised to walk into a company that has not updated its costs for years. The irony is that these same companies complain that they cannot compete with pricing from local commercial printers. Of course, it goes without saying that accurate manufacturing costs are a critical to calculating pricing. Ask yourself these questions:
- "Are we using the same equipment we did five years ago?"
- "Do we have the same number of staff we had five years ago?”
Most companies have changed their equipment and have fewer employees, which means that you most likely reduced your costs and don't know it.
During my presentation at IPMA, we will discuss the two strategies to determine if your BHRs (budgeted for hourly rates) and time standards are accurate. This will be followed by conversations to determine if your costs are too high, and strategies to reduce your costs. Then we will enter into a conversation about the controversial subject of pricing.
Pricing is often considered a taboo subject within the in-plant community because no one wants their customers to feel "ripped off" and complain about pricing. The standard operating procedure for pricing is to mark up the costs somewhere between 10%-40%, which is known as the cost-plus model of pricing. The problem, however, with this model is that it does not take into account the perceived value.
According to Investopedia, perceived value is, "The worth that a product or service has in the mind of the consumer. The consumer's perceived value of a good or service affects the price that he or she is willing to pay for it." We are seeing some in-plants shift from cost-plus pricing to competitive pricing and others to value-based pricing.
Lastly, we will look at three case histories from IPMA leaders, and discuss how to create a battle plan to help defend the value the in-plant. I look forward to seeing you in the Mile High City, my hometown.
Howie's presentation will take place Wednesday, June 22, at 11:30. See the full agenda here.
Howie Fenton is an independent consultant who focuses on analyzing/benchmarking the performance of printing operations. Fenton helps companies use metrics, best practices and workflow strategies to streamline operations. Call (720) 872-6339 or email firstname.lastname@example.org