How to Approach Cost Control

Cost control is crucial for maintaining profitability and competitive pricing.

Here are some thoughts for effectively managing costs for today’s printing companies:

Up-to-Date Estimating Costs
Most printing orders are estimated prior to final sale. For that reason, it is important that your estimating systems, either manual or from a MIS system, are monitored and adjusted to reflect current internal and external costs. If you are discounting costs that are not current this could lead to lower-than-expected margins.

Job Costing
How do you confirm if the job ran to plan? By job costing, organizations can review ‘what went right’ and ‘what went wrong’. Analyzing a job will help in correcting action for future jobs and management will be able to take decisions on pricing levels.

Inventory Management
With the fluctuation in raw material costs and availability in the post-COVID era, it is essential that organizations continually review prices and availability. MIS systems are an important asset to enable you manage stock levels. Other than labour, material costs make up the largest component of a job cost and therefore should be managed as such.

Key Performance Indicators
The tracking of and analyzing key performance indicators (KPIs) and regularly reviewing financial statements, operational metrics, production reports, and job costing, will help organizations identify areas of improvement. This information will show your trend and help you to benchmark performance against industry standards, enabling you to make data-driven decisions to optimize cost control strategies.

Material Waste Reduction
Control your waste. Implement waste analysis. Collect data from your printing and finishing equipment and analyze the waste levels. Report on how much waste each piece of equipment is contributing to waste. Ensure the equipment crews are aware of waste and hold them accountable. Post waste percentages and involve employee’s in waste reduction. If you’re running a web plant, check white waste cut off from a roll or the core waste.

Continuous Improvement Culture
By converting the culture of your company to be the omplementation of such programs as Kaizen or Lean Manufacturing, allow for continuous improvement within your organization. Involve your employees to identify and suggest cost-saving ideas, and reward successful initiatives.

Focus on Solutions
Allow your employees to be part of the solution not part of the problem. Ensure there are regular reviews and reassess your cost control strategies to adapt to changing internal or external conditions and technology.

There are many other areas that can be explored that will contribute to improving costs and cash flow. These are listed below and should be explored by organizations:

• Equipment Maintenance & Upgrades
  Regularly maintain all equipment to ensure optimal performance and minimize downtime.
• Energy Efficiency
  Reduce energy consumption and associated costs by implementing energy-saving measures.
• Staff Training & Cross-Training
  Invest in training programs to enhance the skills and efficiency of your employees. Well-trained staff can minimize errors.
• Digital Supplier Contracts
  Regularly review and negotiate contracts with suppliers to secure favourable pricing toner/ink jet colour. How much are you paying for a “click charge”?

By implementing these methods, printing businesses can effectively control costs, improve operational efficiency and cash flow, and maintain a competitive edge in the industry.