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  • Buy Paper?

    Good afternoon.

    I work for a large educational services firm that provides online, self-study and classroom products for students and professionals. My Supply Chain Management team consists of three buyers and three inventory specialists. Our tangible product buy include books, exams, CDs, flashcards, etc. The majority of our annual spend falls in the print portion of our portfolio, which consists primarily of saddle-stitch, perfect bound and wiro-bound products.

    Without delving too deeply into the details of our business, spend and purchasing practices I pose this simple question: What are the key factors to consider when deciding whether or not to procure paper for our printer's to use for our products?

    I don't want to give the impression that my mind is made up, but here's what I'm dealing with: We buy paper for about 50% of our volume of this category and every year we end up with a huge paper cost allocation mess to work through with our Accounting group. Our buyers are adamant that they are saving the company money by buying paper and managing the trends in the marketplace. I think that any savings that we might obtain from this practice are eaten alive by the accounting mess and associated write-offs at year end. Since I believe (and proclaim) myself to be a pragmatic leader, I'm looking for feedback and benchmarking perspectives from other publishers and print buyers.

    Thanks, in advance.

  • #2
    Re: Buy Paper?

    Firstly I suppose asking printers to supply prices with or without paper may show you whether you are making any savings. we see alot of print managemnet compabies negotiating deals with paper merchants and paper mills and then they sprecify where we are to buy the paper - it goes on our account but at their special agreed price. We have to quote their order number so there is tracability. From the clients viewpoint they always get their jobs printed on the correct paper.
    We still have to quote the jobs against other printers and include the paper cost in our price
    Peter
    Built in the paper price is usually a rebate which the clients gets directly from the paper merchant so we don't get upset whyen we see how much cheaper they can buy the paper than us :-)
    And also Supply chain management still get all the "jollies"

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    • #3
      Re: Buy Paper?

      We bought our own paper for the magazines that we printed and almost all of the other print we generated. We worked with a paper company (Pam Mantor) to get the best pricing around. We sourced from multiple vendors and did a "first in, first out" purchasing plan where we only kept enough stock in our inventory for two magazine issues. This way we avoided paper storage fees, minimized handling fees and avoided having extra paper floating around. For general sheetfed or and other projects we ordered specifically for the job. Because we were buying so much (for us it was a lot) paper we always got great rates. I remember buying #5 ground wood for $32 per hundred weight. Our printers were usually about $5.00 per hundred weight more plus we still had the paper handling/storage fees. It was a really bad situation when we had to buy paper from a vendor... I had a small budget, about $2MM, and we spent almost half on buying our own paper and the rest on print itself. I shutter to think of what it might have been had we purchased paper from the printers. One thing we made a condition of doing business was itemized invoices. If you couldn't itemize every invoice, we didn't print with you. Kept it simple, kept everyone honest.

      It was a tough thing sometimes, some printers didn't like the fact that we supplied paper. We even had a printer say our paper was bad on a run. That's where having a paper broker like Pam came in handy. She could "smell the bull" better than anyone and helped to keep some printers honest. She was worth every penny of her fees, no doubt about it.

      Never pay retail, especially with printers buying paper.
      Matt Beals
      The views expressed here are my own personal views and are not those of my employer.

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      • #4
        Re: Buy Paper?

        I would suggest 3 options:
        #1 locate a "trade printer" and "paper mill retailer" so that you can break the cost control into 2 parts -- paper & printing; but you need someone inhouse familiar enough to collaborate this.

        #2 hire a brokerage consultants (i'm on the list too), and have them make the supplier cost structure open and transparent to you, and pay a reasonable commission for the broker, make sure they justify their commission through value add like efficient and smart procurement or ISO printing quality compliant....

        #3

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        • #5
          We are a Paper Mill and may be able to accommodate, without having any undue pressures of the "resellers" out there. Less people getting their hands on your goods, means a better price. However, price doesn't indicate true cost. To that end, for the best costs savings and ease of use, storage, shipping,etc. feel free to give me a call.

          Tom Parbs
          "The Marine"
          888-932-7273 x2172
          Last edited by TheMarine; 06-12-2009, 01:47 PM.

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          • #6
            Volume equates to better pricing. If the printer orders a higher volume than you it will get preferred pricing. Most printers deal with at least two different paper vendors many with three or four. The printer will probably then mark it up the cost of the paper. I'd guesstimate most printers markup is between 0-20%. Not all printers markup paper costs and you may be hurting yourself more than you are helping. You must supply enough paper for make-ready and conversion waste. When you bid the job to the printer ask what amount of paper they estimate to need for the entire process and what size sheet they are running. I strongly do not suggest trying to dictate to the printer what press sheet size they are to run (this would possibly be the dumbest thing you could ever do). Not all papers are created equal and not all printers are versatile in running unfamiliar paper. The burden is on you to know that a #3 sheet isnt going to look as good as a #1. The burden is on you to know for example that Dull, Silk, and Satin are pretty much the same thing and is mainly paper company marketing-speak. You may be met with resistance for the logistical pain you are causing the printer and the loss in a potential profit center. Remember that printer probably has a person to pay to synchronize, schedule and order the paper on daily basis and you are making it harder to support that person if you are a big enough customer. If I had a customer who was insistent about providing their own paper that caused problems whether they be in printing or only in logistic I would add the cost of customization to their jobs. I would not want a customer providing paper for their own jobs unless they were tiny runs on a tiny press or massive jobs that come in rolls or pallet sized quantities.

            Comment


            • #7
              Are you able to supply any cut size sheet of Accent Opaque?

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              • #8
                Accent Opaque

                If you are asking me, Accent is not a line we carry or manufacture. Sorry. We specialize in Carbonless NCR paper, Boise products, and Inks (Van Son, Spinks, Handschy, Hurst, etc.) and Press supplies (chemicals, washes, etc.). You can see our full catalog at Guy's E.Paper, LLC 847-669-0222. We offer NO MINIMUMS, NO SMALL ORDER CHARGES, FREE FREIGHT on complete cases of paper (you can mix different sizes and products of same family to make complete), and since we are a direct source (we are the manufacturer)- our pricing tends to be 15-30% lower than paper suppliers who are "brokers" or non-manufacturers who charge mark-ups and commissions.

                Ask for Tom "The Marine"

                Regards,

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