Article prepared by C. Clint Bolte, C. Clint Bolte & Associates, Chambersburg, Pennsylvania. For additional information please call 717-263-5768, fax 717-263-8945, or e-mail to clint@clintbolte.com.

High Volume Print Buyers at Print 2009

Print buyers have been an integral part of Print and Graph Expo trade shows for years. Special interest seminars have been set up for them as a logical tie in with the leading print technology trade show in North America. At Print ’09 for the first time there was a panel presentation organized by Graphic Arts Monthly magazine comprised of high volume print buyers. These three executives represent entities that buy nearly a billion dollars of printing annually in North America alone. The proprietary systems, procedures, and policies they follow might well be “downsized” to fit other large corporations. And therefore should be of serious interest to print suppliers throughout the world.

GAM Editor-in-Chief Bill Esler organized and moderated the panel comprised of the United States Public Printer Bob Tupela, InnerWorkings President & CEO Eric Belcher, and the Director of Manufacturing & Distribution Manager for Reed Elsevier North America Mike Cohen. Each panelist gave an historical perspective on their firm’s print procurement evolution and the current state of their art.

The US Public Printer runs the Government Printing Office headquartered in Washington DC but with regional offices throughout the nation. They support the 250 Executive Branch agencies in preparing contracts for fulfillment of their printing needs. GPO print procurement responsibility began in 1929 and grew to volumes in the mid 1990s of over $700 million. The Internet and alternative electronic media have steadily eroded that peak volume to $532 million last year. Of the 10,000 printers listed on the GPO’s roles of qualified vendors 2,000 of them won and produced all of the procured work last fiscal year.v

Two very innovative, but quite frankly not new policies, are the GPO’s (1) levels of quality and (2) their statistical quality assurance inspection program. There are five quality levels; # 1-the best (which also has very limited and select listing of qualified printers), # 2-prestige, library, better quality (some of the generally acknowledged print quality leaders on the continent listed here), # 3 – good annual report quality (entry level process color, for example), # 4 –basic utility with no process color, and # 5 – lowest, usable (has evolved into work done by Agencies on their MFDs). Levels 3 & 4 represent 80% of the total volume.

Disagreements over meeting the print quality expectations of each level are settled by statistical sampling of various physical attributes of the delivered job. The number of identified flaws exceeding a stated threshold could get the job rejected. This long-standing GPO quality assurance inspection program has been effective at resolving disputes. The “mediator” has been an Inspector General Judge assigned to the GPO for such purposes.

Founded in 2001 by a couple of technology geeks, InnerWorkings has grown to become the largest independent buyer of print in North America. Eric Belcher, former COO of MAN Roland, joined InnerWorkings a year before the company went public in 2005. With its proprietary software and systems, InnerWorkings’ 650 professionals (350 print buyers) serve 150 enterprise clients – fifty of which are Fortune 500 firms. They bought $419 million in 2008 across 62 different printing and promotional product categories.

Mr. Belcher was emphatic in stating that their browser accessible PPM4 (Print Procurement Manager v4) software is “not just an order management or e-store” facilitation. For example their 8,000 print suppliers (4,000 of which received purchase orders last year) can each log onto the system and update their own equipment and capabilities profile. From these profiles along with the client ratings of each of the vendors (for each of the job’s produced!), InnerWorkings can generate from the job specifications (1) the ideal equipment configuration to produce the job, (2) a listing of the most qualified potential printers in that region, and (3) the expected award price based upon recent historical data. The listing of recommended qualified printers also takes into account factors such as potential vendors’ seasonality and open capacity. And the listing includes the incumbent printer on any reprints or roll over annual contracts. Print vendors can also log on and find specifications for available job offerings for which they were not designated by the system to be among the “ideal” candidates.

Mr. Belcher emphasized, “InnerWorkings is the proven low cost procurement provider and typically saves corporate clients 10-15% off their previous procurement experience.” This savings is after InnerWorkings’ mark up for their services, which results in profits of 4-8%.

Presentations to prospective enterprise clients are relatively simply as specifications are entered in the InnerWorkings database in front of the client. Historical award prices are shown so that the prospect can compare with their own procured results. They often do not share their actual experience with the InnerWorkings’ representative until after the fact if at all.

In response to an audience query about how a new printer can be added to their qualified list, Mr. Belcher diplomatically remarked, “for every new enterprise client that joins InnerWorkings all of their qualified print vendors are automatically added to the InnerWorkings vendor database.” So the answer is simple. Convince your biggest client to let InnerWorkings buy their printing and you will automatically be in the club to bid on work for the other 150 big boys. Otherwise InnerWorkings does not need more qualified print vendors and provides no “application process.”

Mike Cohen described Reed Elsevier’s North American procurement operation as being less than $12 million annual in producing their 80 publications, one of which is Graphic Arts Monthly, along with their marketing support materials. They also maintain a proprietary “spend information database.” They have developed and express a good deal of confidence in their eAuction approach to print procurement which includes the following features: eRFP, question and answer forum for prospective vendors, well defined bid lots, on-line events lasting 30 minutes to an hour, and a proficient review/validate/proceed phase. They use a third party auditor is inspect worksites for critical jobs.

So it is clear that IT has taken the print procurement process to the same sophisticated levels that automated digital workflows have aided the print production process.

Article prepared by C. Clint Bolte, C. Clint Bolte & Associates, Chambersburg, Pennsylvania. For additional information please call 717-263-5768, fax 717-263-8945, or e-mail to clint@clintbolte.com.