Seeking workflow savings

As the publishing and print industry matures and print volumes are threatened by alternative media, publishers and their supply chain partners must re-examine and re-engineer their basic business models and operations to adapt to the changing business climate. Managing a supply chain within a declining market presents challenges never previously experienced on such a scale. Survival will largely depend on cost reductions through workflow initiatives and greater collaboration between the publisher and the supply chain.

The last twenty years has seen unprecedented advances in technology: increased press speeds, larger format presses, digital printers, and pre- and post-printing devices. These have all played a significant role in advancing the objective of cost reduction. However, with advertising margins being eroded at the publisher and the need for cheaper prices within the value chain, it is becoming increasingly difficult for businesses to sustain the levels of investment needed to continue traditional routes for savings and efficiencies.

This fundamental change in the industry clearly presents an opportunity for both publisher and supplier to investigate new innovative and sustainable solutions with lower capital investment.

MIS Integration

MIS integration using file formats such as Adobe’s JDF (Job Definition Format) is one of the leading methods of exchanging information between companies and systems. JDF is an industry standard designed to simplify information exchange between different applications and systems in and around the publishing / print arena. The most prominent benefits of JDF are:

1. Ability to carry a print job from conception through completion. This includes a detailed description of the creative, prepress, press, post-press and delivery processes.

2. Ability to bridge the communication gap between production and Management Information Services (MIS). This ability enables instantaneous job and device tracking as well as detailed pre- and post-calculation of jobs in the graphic arts.

3. Ability to bridge the gap between the customer's view of product and the manufacturing process by defining a process-independent product view as well as a process-dependent production view of a print job.

4. Ability to define and track any user-defined workflow without constraints on the supported workflow models. This includes serial, parallel, overlapping, and iterative processing in arbitrary combinations and over distributed locations.

Colour Management

Continual technology advances in other areas such as colour management at desktop and manufacturing levels have also presented opportunities for collaboration. There can be a misconception that technology should make things easier. However with colour management, this can be a complex project to navigate through. If used correctly, it does mean that it should make things more efficient with greatly improved quality and predictability. Within the publishing supply chain workflow, the term ‘correctly’ means using clearly defined and communicated processes. It is essential that editorial and advertising have a clear understanding of the part they have to play.

Furthermore, the print supply chain must fully embrace the change. It helps to use existing industry standards as they have been created by experts. Therefore all of the really time consuming press profiling activities on different paper grades will have recommended profiles assigned.

Despite the tight tolerances that exist within a colour managed workflow, it is important to remember that there will always be variations that just cannot be controlled. Variations in ink and paper, the blankets, water supply, ambient temperature and humidity of the press hall will naturally have a bearing on the finished result. A printing press is effectively an organic life form that will fluctuate in performance during the course of a shift. With all this said, there are still far more benefits to be gained from implementing such a process.

Outsourcing

Business Process Outsourcing is nothing new to the corporate banking, telecoms and public service sectors and there is also a history within consumer publishing of certain non-core tasks such as prepress / retouching being carried out by third party partners. However the concept of offshore outsourcing is relatively new. So what does BPO mean and does it have a role to play in the publishing arena? Offshoring is the utilisation of a third party that is ‘offshore’ (ie. not domestic), normally to a region where labour costs are lower. As domestic costs rise (especially labour costs), it becomes necessary to find parts of the world where you can buy services at a lower cost and sometimes better quality with reduced lead times. Add to this an appetite within the media industry to focus on core strengths whilst investing in new media opportunities, and outsourcing becomes a serious opportunity.

Criteria for outsourcing:

1. Cost comparison
This analysis would show whether it is saving costs to outsource the function. To understand the costs of outsourcing, it is important to appoint a number of external providers and request financial proposals. Detailed costs for the internal department are obtained from the business stakeholders and the costs for outsourcing then compared against these.

2. Contribution to competitive advantage
Organisations attain competitive advantage by building superior performance positions in activities that are valued by customers. Building a superior performance position that is difficult to replicate, will lead to sustainable competitive advantage. Therefore, organisations should perform internally, and build capabilities in areas that deliver competitive advantage. Activities that do not deliver competitive advantage are potential candidates for outsourcing.

3. Relative capability in the function
Determining the relative capability position in an activity involves identifying the performance disparity between the sourcing organisation and competitors and suppliers. For outsourcing purposes, the sourcing organisation can possess either a distinctive capability position or a non-distinctive capability position in the activity. Understanding both the type and source of advantage in the activity can assist with determining whether an organisation has a distinctive capability position. Activities in which an organization has a distinctive capability position should be performed internally, whilst activities with a non-distinctive capability position are potential candidates for outsourcing.

Non-distinctive capability position activities include those in which an organisation has a lower or par performance position. These activities are potential outsourcing candidates, as they do not create competitive advantage and competitors or suppliers can achieve similar levels of performance.

When determining the relative capability position, it is important to understand both the type and source of advantage in the activity. The type of advantage can be based on attributes such as lower costs, superior quality, higher service levels, etc. Determining the source of the advantage involves understanding how superior performance is achieved, and ease of replication. Potential sources of advantage include scale economies or experience in the activity.

4. Opportunism associated with outsourcing
Consideration should be given to the transaction costs associated with dealing with an external supplier when outsourcing an activity. There are a number of variables that influence transactions costs. The presence of investments in physical or human assets dedicated to a particular relationship will create switching costs for the sourcing organisation. This problem is further exacerbated if there are a small number of capable suppliers in the supply market. Uncertainty both in the business environment and in the requirements of the sourcing organisation may mean that it is not possible to write complete contracts. Therefore, renegotiation and frequent amendments are required as circumstances change. Complex interdependencies between business processes can also increase transaction costs leading to opportunistic behaviour by the external provider.

For a business to make a success of outsourcing, it is essential to incorporate the following precautions:

* Clear statement of requirements. Since the function has been in sourced for a long time, there are a lot of operational measures, which are taken for granted. For example, quality measures. If the activity is outsourced, these need to be clearly defined.

* Availability of competent resources. A thorough evaluation of the service providers is required, especially if the outsourcing company is operating offshore.

* User involvement. The success of outsourcing will depend on the extent to which the current in-house resource is involved in making the transition. Since they have an in-depth knowledge of the workflow and the processes, it is essential that a few of the current team members are part of the initial stage of outsourcing.

* Executive support. Any outsourcing activity cannot be a success without the support of senior management members. It is crucial for them to participate and facilitate the change management process.

* Proper planning and benchmarking. Taking an activity out requires detailed planning as well as defining clear goals and benchmarks. This will help measure the success of outsourcing.

* Effective change management. Research will more often than not highlight the internal resistance to outsourcing from a very early stage of the evaluation. During the research process, the negative association with outsourcing can be very prominent. The business evaluation will generate feelings of loss of control and job losses which if ineffectively managed has the potential of negating the benefits of outsourcing. The ‘people’ related issues are integral to successful outsourcing. There is a negative ‘feeling’ associated with outsourcing especially in industries like media which have only started outsourcing recently and therefore needs to be managed well.

* Mitigating and evaluating risks. It is essential that any organisation evaluate the risks involved in outsourcing internal activities. In case the outsourcing does not work, a back-up plan needs to prepared to mitigate any risks.