Commentary & Analysis
Managing the Print Supply Chain
By Barbara Pellow October 13,
By WhatTheyThink Staff
Published: October 13, 2003
By Barbara Pellow October 13, 2003 -- In today's economy, companies are unilaterally trying to take cost out of their business. “Supply chain management,” “strategic sourcing” and “spend management” are all buzz words that companies are using to describe how they want to handle the procurement of materials; transformation of these materials into intermediate and finished products; and the distribution of these finished products to customers. Point-of-sale scanners allow companies to capture customer activity. Electronic data interchange (EDI) lets the organization understand changes in customer activity. Various functions within the organization are then able to react by using flexible manufacturing, automated warehousing, and rapid logistics. Supply chains exist in both service and manufacturing organizations, although the complexity of the chain may vary greatly from industry to industry and firm to firm. The Internet provides a great opportunity to automate the supply chain and provide organizations with real-time information across various points in their value chain. The promise of “supply chain management” is a reduction in costs and an improvement in productivity gained by identifying process enhancement opportunities. While the statistics vary, supply chain management has delivered significant ROI and executives from a variety of different market segments have identified immediate savings ranging from 8.5 percent to 24.5 percent on recurring annual purchases.* Great Lakes Companies saw this focus on supply chain management as an opportunity to establish them as a market leader. They implemented their AKSESS digital asset management system to support these customer needs. Great Lakes realized that the market was deploying technology and brainpower to improve supply chain performance in pursuit of cost reduction and improved efficiencies. Chief Technology Officer Dean Hanisko said, “Our AKSESS system is transforming our business. Our profitability is improving because we are not just doing print projects…we are working with our customers on long term contractual print programs.” The initial market focus of “supply chain management” was on the direct materials used in the production of final product, such as raw materials, chemicals, and manufacturing sub-components. The next major opportunity was for indirect materials like office supplies and computer equipment. Because Internet Commerce has proven to be a cost-effective and powerful way to do business, the focus is now expanding to services, ranging from travel to telecommunications. Document management and printed materials, based on corporate spend levels for these categories, has also become a major target. AKSESS…Facilitating Business Growth Great Lakes Companies of Cleveland Ohio acknowledged both customer demand and business benefit in the implementation of AKSESS. Great Lakes Companies has always been a leader in the printing and publishing industry and has a history of embracing new technology. Joseph and Elsie Schultz founded the company in the 1930s in the midst of the depression. Leadership passed from Joseph to his son George, and today, Jim Schultz is the President and CEO. This is a company that has thrived on innovation since its inception. Great Lakes Companies was an early adopter of seven-color press technology; the utilization of desktop publishing systems and offering customers pre-media services; and they are now at the forefront of Web-based supply chain management. The key principle that drives the implementation of new technology for Great Lakes is customer need. Whether it was the purchase of a new press or a software solution, the core philosophy at Great Lakes is, “Everything is driven by our customers.” The development of Great Lakes' e-procurement system was no exception to this mantra. In 1997-98, Great Lakes Companies established a users' group of non-competing customers called the “Digital Widgets Users' Group.” These sessions provided the company with tremendous insight into customer issues, concerns and challenges. Hanisko indicated that there were some critical needs that became apparent in this dialogue. “The customers wanted digital asset management…they wanted everything in one place…they wanted to maintain brand consistency and they wanted to eliminate the redundancy in image creation, including photos and graphics.” Great Lakes looked at these emerging customer needs from two perspectives. They identified primary users…the content creators that wanted a solution for maintaining high-resolution images. But of equal importance, they focused on the secondary user…field sales representatives, manufacturers' representatives, and agents that needed documents and images for PowerPoint presentations and proposals – the actual consumers of content. The result of their analysis of customer needs was the introduction in late 2000 of a system called AKSESS. This system was developed as an ASP (Application Service Provider) model, and is comprised of four key elements. 1. Asset Driver – This module stores and manages all of the client's digitized images, text, video and audio clips. They are securely stored, organized and formatted so the client can retrieve whatever is required by product name, description, model number, or any other descriptor specified. The benefit to the client is that they have immediate access to their brand-building assets that have already been approved for both content and color. The image below depicts a typical screen a customer might view. 2. Document Driver – This module was designed to store completed documents and their supporting graphic elements in a central database. Users can search all of their digitized documents by any descriptor they specify. In response, the system provides a summary of the query, thumbnail of the document, PDF for downloading, a link to the components, and the original application file, as indicated in the image below. The client has immediate access to documentation and can identify all documents requiring revisions should there be changes in a product line. 3. Custom Driver focuses on empowering field personnel to create location specific documentation while maintaining the consistency of the corporate brand message. Through a user-friendly wizard, users can retrieve location-appropriate images, add a personalized message, and insert them into centrally created templates. Clients like the system because they have the ability to provide extra value to their channel partners through a powerful co-op advertising tool while still controlling the brand image. 4. Inventory Driver is linked to fulfillment operations. It allows clients to check inventory levels, order items from inventory and request shipping. Like all of the AKSESS system, Inventory Driver has 24/7 availability. This gives users real-time control over warehoused marketing materials and collateral assets, as shown below. While customer benefits are significant, so is the return on investment to Great Lakes Companies. Through the AKSESS e-procurement solution, Great Lakes has transitioned its relationship with customers from that of a printer to a true business partner and expanded services to include more than merely print. The company provides digital asset and document management, custom publishing, kitting, fulfillment and distribution. The bottom line for Great Lakes is that e-procurement, combined with great service, equates to a loyal customer base that is directing an increasing share of their document delivery business (whether in print or electronic form) to Great Lakes Companies. Adding Digital Color to the Mix Great Lakes Companies purchased a NexPress 2100 in January, 2003. In less than six months, the NexPress was running a shift and a half a day and delivering profits. Hanisko said, “Our success with digital color can be likened to good farming. We had the soil, sunshine and the right amount of rain. We developed the customer-facing applications to facilitate the process. Based on the range of traditional services we offer, Great Lakes has strong relationships with customers. We were providing them with everything but digital color. The addition of digital color was a natural. That is what made it happen [in terms of profitability] right away.” Great Lakes Companies invested capital to deliver the AKSESS system, but they also invested in their people. They developed the software infrastructure internally and they host the data management services themselves. While the system is easy to use, they did invest heavily in training their customers on effective system utilization. Of equal importance, Great Lakes Companies needed to educate their sales personnel so that they could effectively articulate the advantages Great Lakes could offer in providing a total document management solution. Their sales staff is trained to identify the opportunity and qualify the account. A team of specialists is in place to support implementation of e-procurement once customer buy-in has been gained. Start…NOW!!!!! Great Lakes is a perfect illustration of how to get started with e-procurement and better supporting customers as they try to save money by more effectively managing their supply chain. The messages are clear. Customers are demanding Internet access to suppliers. They are looking for cost savings opportunities as well as improved access to digital assets and improvement of overall efficiencies. To both thrive and survive in this environment, printers will need to participate. To fail to become a supply chain management partner is a going-out-of-business strategy.