Controlling the Purse Strings

noelward

Well-known member
Controlling the Purse Strings

By Noel Ward, Editor@Large

What did you buy for your business last week? How about last month? How much of that was needed immediately and what went into the warehouse because you’re going to need it soon? How did you track what went where and how much it cost? And did you acquire anything that actually belongs to your customer—because it’s part of an SLA and for which you’ve already billed the customer? And how are you making sure everything you purchase is properly managed and accounted for?

These are questions I often wished I had fast answers when I was running a big customer satisfaction program that spread our inventories across three printers’ shops and a couple of mail houses. I had a great team but we had nothing more than Excel spreadsheets to keep track of a few million dollars of labor, postage, printing, shipping, storage, and mailing. It occupied more of the team’s time than I would have liked. Nowadays there are better options.

A few weeks back we talked in this space about Inventory Management. Purchasing feeds into that topic but is also a standalone process, which is why it is part of the broad functionality of Avanti Slingshot software, a Print MIS system I’ve been evaluating that provides a big picture while also drilling down into all the moving parts of a print production workflow. One of those is purchasing, because you can’t work without buying stuff.

What you Know and When you Know It
So how do you know when to buy something? Sure, people on your team send you an email or spreadsheet or brief you on what needs to be bought. Or maybe a supplier tells you it’s time to place a new order. But when you have a couple hundred customers it can be difficult for to keep track of all the pieces that come together to create the final products that meet the requirements of the SLA for any one client, much less tie them together in a way that provides an advantage for your business. Sure, that’s partly the job of CSRs and other managers but there’s nothing wrong with making their jobs a bit easier. And that can be a big deal.

Just a few days ago I heard from a CSR who suddenly learned about some parts of an SLA when a salesperson asked her whether an obscure element of a project had been purchased. She’s a fast dancer and covered it well but told me in a call that she wondered how many other “minor” items were being missed across the company. She now knows to study SLAs more closely, but I immediately thought of how much easier the process would have been if all the purchasing requirements had been plugged into an MIS so they would pop up when needed and not be accidentally overlooked. After all, nobody likes surprises!

Working at the individual customer level, the Purchasing module in Slingshot encompasses automatic reorder points, accounts for minimum quantities, supports standard replenishment schedules for normal items, and helps with backorder tracking, by project or job-by-job and can eliminate—or at least drastically reduce—surprises. An important advantage with Slingshot is being able to specify preferred suppliers such as those known to offer the lowest costs. That can help you can track purchase history to make sure costs remain in line with your expectations and SLAs.

Being able to keep track of all the moving parts of your many processes also keeps all your work on track. Back before the pandemic I was shooting video at a print and fulfillment shop. I was getting some footage of hand work but the process had to be stopped because they ran out of one item in the package they were assembling. Someone, someplace had not ordered enough of the items being placed in a box so the work had to stop until the item came back in. The deadline was still okay, but cashflow slowed because the job couldn’t be billed until the shipment was completed.

Taming the POs
The best way to monitor your spend is making sure there is a purchase order for everything. Imagine how much easier this would be were there a way of automating the PO process. There is.

“With Slingshot you can create 50 purchase orders at one time, spanning multiple clients, that go out to a dozen suppliers. Because they are all for goods coming back to your company the Purchasing module in Slingshot can help you save on shipping costs and even take advantage of bulk order discounts,” explains Josh Perkins, Slingshot product manager at Avanti Systems. This is especially advantageous when ordering items produced by suppliers that you then stock and fulfill for customers. Perkins explains further: “When POs are created, backorders from current or new jobs are combined with stock orders—the ones that come from automatic inventory reorder points or minimum quantity requirements to total the quantity required for a purchase to take advantage of those volume discounts while reducing the number of POs that are needed.”

Slingshot also streamlines order creation for all kinds of products and services that aren’t necessarily print-related. For instance, suppose a printer has to fulfill an order that includes 5,000 leather binders that have been shipped from your customer’s supplier to you. You agreed to adorn each one with gold leaf foil stamping, a process you are sub-contracting to an outside provider. It seems simple, but the stamping is still a purchased service that has to be paid for. The Purchasing module in Slingshot tracks the binders as they come into inventory, automatically produces a PO as they go to the outside provider, then tracks receipt of the foil-stamped binders as they come back and are passed back into your inventory. Nothing falls through the cracks, and all your costs are fully accounted for, including the sixteen binders that didn’t survive the foil stamping process.

Of course, things don’t always go according to plan. Rush orders show up unexpectedly (and at the worst possible times), deadlines slip, parts of SLAs go unnoticed, and not everything you need for a job always gets a PO. But the Purchasing module of Slingshot still has your back. Even in the middle of a job Slingshot can generate a PO ‘on-the-fly’ to cover the gaps in your process and help you keep track of all the moving parts. Raise your hand if you can think of a few times when this would have been useful. Maybe like that job last July you’re pretty sure you lost money on.

Things that take up space
Other items can get more complicated but when profitability is at stake keeping track of all your costs is essential. Some items for instance, are actually owned by your customer—like those leather binders noted above, which in addition to getting foil stamped will also require dedicated space in your warehouse because they will be shipped out with materials you will print over the next six months. You presumably assess customers a storage fee for the space these and other items occupy in your warehouse. For many shops, this is also a part of purchasing as are the skids of brochures and manuals you print and store for other customers. Then there’s those logo t-shirts you stock and ship as needed for three customers. Your inventory system can track quantities, but you may still need to handle the ordering—which requires POs—and managing the buying and shipping as part of your SLAs. This makes mastering purchasing and storage critical parts of your operation.

Perkins brings up another key point: scheduling, which is directly affected by purchasing. “As a practical matter, you can’t schedule a job to be printed before the expected date of the receipt of the paper required for the job.” Great point! Today’s common practice of Just In Time delivery of materials is fine until a needed skid of material hasn’t shown up on your loading dock but the job is ready to run. Slingshot links inventory, purchasing and scheduling so you will know when all the materials needed for a job are ready for use. Moreover, Slingshot gives you the ability to manage purchase costs and inventories effectively so you can keep your financial, production and warehouse teams on track.

It is not, of course, the only way to do these things. There are always spreadsheets like the ones I used to wrangle. Many shops still use these. But when purchasing is integrated into a complete print MIS, you can track and monitor every element of every project or job from start to finish, all in a single application, for each customer, by supplier, and more. The real benefit, the ROI, of having more control of the costs and progress of every job for every customer is incalculable.

Next stop: Production
A comprehensive Print MIS starts with estimating and quoting, then moves to inventory, purchasing, pre-press, production, fulfillment, shipping, and the financial aspects of automating as many moving parts as possible. Coming in our next episode are the nuances of pre-press and production: scheduling, monitoring time and materials, and tracking jobs from production into fulfillment and shipping.
 

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