Amazon ships 400 items per second when it’s busy
The vast majority of these orders are low value and low profit. The average online order value is just $82 (Q2-4 2017, source Statista.com) and Amazon’s current profit margin is just 3.07%. Amazon has created its dominant position in the marketplace by competitive pricing and efficient fulfilment, no matter how small your order.
However, it could not achieve these aims and still create the profits that it does without one important focus. That focus is on systems and workflow.
The print industry faces similar challenges to Amazon
The average order value is constantly decreasing, especially for commercial printing companies. In addition, pricing is always under pressure and many printing companies are being forced to accept lower prices for the majority of their products.
The only way for printing companies to stay profitable is to become as lean and efficient as Amazon. And the only way to achieve this is through utilising the right software.
Remember the traditional costs of print
Most printing companies produce print efficiently. They have fast presses with low make ready times. File handling and imposition are usually fully automated. Short run finishing has become a lot quicker and cheaper over the years.
However, it is much harder to find the same levels of efficiency when it comes to job management. This is where the best opportunities for cost reduction in jobs often exist today.
For printing companies that still manage jobs manually, there are many time consuming tasks. These include: quoting the job, recording the job details, creating the job bag, managing the despatch and creating delivery notes and invoices. Not only are these time-consuming, they are also prone to suffering from input errors and, often, wasteful repetition of information entry.
This is why workflow automation is so important
Today’s workflow automation systems are all about linking the front end to the back end. They create a seamless flow of information right from the start of the job until delivery. Their real value is in managing job administration efficiently.
Most printing companies already have a workflow that manages production efficiently. For digital printing, there should be no need for manual intervention until a job has been printed. The only job an operator has to do is to load the paper. A good workflow will take the right files from the prepress queue and make the right press settings automatically.
Today’s workflow automation is not about production
Instead, it is about order management. It creates the right Amazon type environment where printing companies can manage low cost and low margin orders efficiently. It is their key to making a profit in today’s price competitive environment.
A modern workflow management system should be able to achieve the following:
- allow the customer to enter job details and create their own prices where appropriate. This might be through an online public web portal or through a specific portal for an individual customer
- allow the customer to upload their files
- pre-flight the job files automatically
- create an online job bag
- schedule and batch jobs on press as efficiently as possible to allow for more efficient finishing
- schedule and batch automated finishing jobs as efficiently as possible
- create all despatch documentation
- link with despatch tracking systems
- create invoice details and link seamlessly with the accounting system
- create appropriate customer management information to ensure follow up at the right time
It creates a highly automated job management system. And it reduces human intervention as much as possible.
Some people may regret the automation of traditional customer-facing roles
The traditional way of looking at things is that a customer service team creates the service difference. Their interaction with the customer is what drives the next orders. In reality, the average customer service team is so over-stretched that they no longer have time for meaningful customer interaction. They find it difficult to fulfil this part of their role. They are also an expensive resource for production administration.
If printing companies want to stay competitive they will have to reduce this element of their staffing overhead. If you have a customer service representative handling a business card order at today’s prices then you have a major problem. It means that you are certainly losing money on this job. The only way for printing companies to make money on the average commercial printing job is to automate relentlessly. That is how Amazon has become so successful.
Automation can grow your business in other ways as well
Amazon is very good at using automation to monitor what the customer is buying and offer other relevant products. A good workflow should be able to achieve the same result for printing companies. The upselling process should also be automated.
Suddenly, your software can help you drive sales as well as reducing costs. Then your business model becomes a lot more like Amazon. You can stay profitable and grow in a low job value and low margin environment. However, it may be wise to limit your ambitions. Your production team may find they have a few headaches if you start trying to ship 400 items per second!