Congratulations! You've chosen to become a better supply-chain partner. You realize that a learn-and-change approach is better than a make-and-sell mentality, and you understand success depends on how well you collaborate, not just compete. The printing industry is mature--but, hey, so are you. You want to form stronger industry partnerships, and we can help.
So can Industrial Performance Group Inc. (www.indusperf grp.com), Northfield, Ill. The firm specializes in enabling manufacturers and distributors to increase their sales volume, improve profitability and build customer loyalty. The following pages include tips from IPG that can help you manage supply-chain relationships.
More than ever, the printing industry isn't just about printing. It's about capturing, managing and moving information. Firms must respond quickly to customers' demands, and accomplishing this takes supply-chain flexibility and the willingness to adapt to constant, unpredictable change.
If you want to improve your company's partnering abilities, let the following pages serve as a guide.
* We act independently to reduce the acquisition price of goods and services.
* We leverage technology to gain unwarranted pricing and concessions, and we frequently adopt preferred supplier agreements.
* We prefer "I win, you lose" negotiations. We like when costs and risks are shifted to someone else in the channel rather than eliminated.
* We lack strong levels of trust, communication and cooperation with supply-chain members, and we're slow to recognize and respond to market changes.
* We're beginning to realize the old ways of doing business aren't producing desired results, but we lack knowledge and skills to improve the situation.
* We form task forces and committees and often research.
* We seem to have great intentions but little action.
* We work collectively with other firms to identify and respond to market changes. We're focused on reducing costs associated with moving goods through the channel.
* We form distributor councils and functional teams, and we use benchmarking and cost modeling.
* Our decisions are based on consensus rather than compromise, and we understand the importance of "win-win" negotiations.
* We often introduce new products and services, and our profitability is increasing because we're limiting costs associated with inventory, freight and order handling.
* We gain and maintain a competitive advantage based on delivering value to customers in the most cost-effective manner possible.
* We employ customer-focused planning, activity and process mapping, activities-based costing and cost-in-use studies.
* We have extremely
high levels of trust, communication and collaboration with supply-chain partners.
* We know the profitability of all supply-chain participants increases as we gain operational efficiencies, and we deliver true value to customers in a cost-effective manner. We grow by taking business away from less efficient, less responsive competitors.
When Fort Scott, Kan.-based manufacturer Ward/Kraft Inc. reaches business goals, the company's managers and employees gather to eat chicken dinners. Their protein intake boosted in July, when the company celebrated a record number of quotes, orders and income generated from MyNetLabels, a program that's part of the company's Kansas Labels Division.
Ward/Kraft is pleased to acknowledge that the flavor of MyNetLabels tastes like MaverickLabel.Com., an Edmonds, Wash., firm that produces and sells on-demand digital labels, decals, nameplates, bumper stickers, magnets, control panels and other products that contain no dye and can be produced in any shape, size or color. Before September 2003, that was an offering Ward/Kraft lacked. "They wanted to continue to be a digital leader," says Mark Trumper, CEO of MaverickLabel.Com and DMIA's president in 2002-03. "They wanted our technology, and we wanted their reach--we don't have the resources to get in front of the distributor market like Ward/Kraft does."
In September 2003, Ward/Kraft signed a manufacturing license alliance agreement with MaverickLabel.Com, purchasing the rights to make and market Maverick Label.Com's print-on-demand labels within the independent channel. It also agreed to license Maverick Label.Com's technology that enables end users to choose label specifications and receive quotes instantly. "You can accomplish more together than you can accomplish alone," says Michael Del Chiaro, senior vice president of Ward/Kraft. "Supply-chain management is about networked resources and your ability to reduce the acquisition costs of goods and services. Our partnership is a perfect example of how alliances can work."
Rick Kent, MaverickLabel.Com's chief science officer, has designed and produced numerous award-winning interactive media programs and systems. He holds four academic degrees, including a doctorate in medicine from Baylor University and a master's in biomedical communication from the University of Texas. According to the company's web site, he's "arguably the world's most highly and inappropriately educated sticker maker." Kent, Trumper, Vice President of Alliances Mark Thompson and Director of Print Services Scott McKiernan helped Ward/Kraft to configure new presses that print labels digitally. They also discussed ways to market short run labels.
"What we wanted to do was take Maverick Label.Com's technology and plug it into our marketing machine," Del Chiaro says. To that end, Ward/Kraft launched MyNetLabels.com, which is part of the company's Speedy Solutions.com™ offering. Here's how the program works: A Ward/Kraft distributor (called an "Affiliate Partner") wanting to sell on-demand labels adds a button to its web site and calls it "Specialty Labels," "Purchase Labels Now" or a similar phrase. The button takes end users to a customized, label-ordering site that Ward/Kraft sets up and administers. (See image on page 40 or visit http://speedysolutions.label serve.com.) Each site includes the distributor's logo and contact information, and features images and benefits of items such as very short run custom labels, custom presided roll and fanfold labels, warning labels, parking permits, asset tags and control panels.
End users who access the label-ordering sites can view product descriptions and select "Click here for an instant quote." They see a page where they can enter quantities needed, heights and widths required, number of cutout shapes required, space needed between labels, artwork options, overlaminates, PMS colors and other order specifications. Then, they receive a quote instantly and can place a credit card order. End users also can retrieve saved quotes and place reorders from the main screen of the label-ordering site. Ward/Kraft handles all aspects of order processing and fulfillment. "All of the labor is gone, and ordering is instant," Del Chiaro says. "No one is waiting for anybody. You need to bring technology to the fingertips of customers. If you're not doing that, you're not going to be part of the future."
Fort Scott, Kan.-based Ward/Kraft Inc. sets up and administers web sites for each distributor, giving end users the ability to order short run custom labels, parking permits, asset tags, control panels and other products online.
Ward/Kraft tracks sales through Affiliate Partners' links, and the company sends quarterly reports to each one summarizing its sales activity. The manufacturer sends monthly commission checks to Affiliate Partners, based on approximately 30 percent of sales (net of all sales tax, credit card processing fees, shipping, insurance, refunds, reprints, discounts, credits and returns).
To help distributors with their sales and marketing efforts, Ward/Kraft provides alliance kits that include 25 sell sheets, 25 post cards, five sheets of address labels and 10 samples of each product available for purchase, as well as a CD with digital versions of the sell sheet, post card and address labels. The manufacturer also provides online case studies available for downloading and up to three hours of web site and product-knowledge training. Distributors can market their short run custom label offering or their alliance with the manufacturer through press releases, web and print advertising, email, direct mail and trade shows.
"End users' expectations are higher than ever, and time needs to be compressed," Trumper says. "This is going to force companies to partner better. Alliances used to be sexy and neat. Now, they're necessary."
Thought Provokers
1) What technologies or services would you offer if time and money weren't obstacles? How could you partner with companies that have those technologies or services in place?
2) How can you get more customers to order online, limiting transaction costs for you and your vendors?
Gail O'Roke, CDC, CEO of Hayward, Calif.-based distributorship Independent Business Group (IBG), says print providers that are considering offering office supplies should consider this: Staples and Office Depot sell as much printing as they can.
