By Andrew K. Reese
Print procurement remains one of the most vexing categories for enterprises to get under control. On the supply side, the size of the potential supply base is enormous, with the trade group Printing Industries of America estimating that more than 36,000 different commercial printing facilities serve the $170 billion U.S. market, each with highly specialized capabilities and limited capacity at any given moment.
On the demand side, the job of reining in print procurement is all the more complex because, as technology research firm IDC writes in its executive brief "Understanding Your Options for Optimized Print Procurement," "Organizational print needs are inherently hybrid, spanning the very strategic, such as sales collateral and product literature, and the non-core, such as employee handbooks and internal company documentation."
As a result of this dynamic, responsibility for print buying is rarely centralized within organizations, according to Jeff Piluso, a principal with consulting firm A.T. Kearney. "We go into many clients and find the print buy scattered across many different parts of the business," says Piluso, who manages large transformation projects in procurement and supply chain for the consultancy's clients. Frequently, Piluso notes, the marketing function drives supplier selection, with Procurement serving in a more transactional role. In fact, research from the Center for Advanced Purchasing Studies (CAPS Research) suggests that fewer than half of companies have formal print procurement programs in place.
The highly specific technical nature of each print buy also makes it a challenge for procurement staff to properly match the organization's requirements for any given job to the most suited supplier, adds Anshu Prasad, a vice president with A.T. Kearney Procurement & Analytical Solution. Print, Prasad says, is a "combinatorially complex" category. "Each provider has its own unique set of capabilities and strengths that they want to play to. All the combinations of what each provider can bring to the table gives you a whole bunch of apples and oranges and pears," he says.
The print market also has traditionally been very relationship driven, adds Eric Belcher, CEO of InnerWorkings, the Chicago-based provider of managed print and promotional procurement solutions to corporate clients across a range of industries. "There are still long-term relationships around service and delivery schedules and trust that have been built up between buyers and the printers that they might have been working with for years," Belcher says. These relationships can make it difficult for Procurement to consolidate or switch suppliers, as the functional owners of the spend might view the incumbent as a "trusted partner" that can deliver against tight deadlines or make last-minute changes to an order.
William Gindlesperger, chairman and CEO of e-LYNXX Corporation, which uses its patented procurement method (dubbed "The Gindlesperger Method") to help companies reduce their print spend, points out that the deep relationships in the print industry can be a particular challenge in difficult economic times. "Print suppliers are dying like flies," Gindlesperger writes in "Suppliers. Here Today. Gone Tomorrow." "This leaves relationship buyers in the lurch, hanging out to dry."
Solutions for Print Procurement
Companies have various options for tapping outside expertise to address print procurement's challenges. A.T. Kearney, for example, will assist companies by introducing the procurement organization to analytical tools that can allow print buyers to better match their requirements to supplier capabilities. "Part of our approach is to embrace the complexity," explains Prasad. "You drive your decisions based on your business constraints and objectives, but you don't strip away the detail and the inherent complexity, which could hurt you in the course of the total cost of ownership analysis."