Spend Analysis Helps A Leading Printing Services Provider Formulate an Efficient Cost-To-Serve Model

Overview of the Printing Services Industry

Globally, the demand for printing services is based on the need for magazines, printed books, newspapers and print advertising. The printing services industry is affected by the transition from print to advertising and online media. In addition, printing services companies, publishers, and graphic designers are increasingly performing services in-house; thereby, heightening external competition for the industry. While financial conditions are expected to improve, generating increased demand for print-based advertising, the continued transition to digital media is expected to hinder the industry’s growth.

Let’s take a look at a few factors influencing the growth of the industry.

• Digital substitution: Today, printing services providers have been forced to deal with the impact of electronic media and other technological changes owing to digitization. Moreover, digital magazines for tablet computers and smartphones have also cut into traditional revenue sources for the printing services industry.
• Postal Rates: Postage increases have made it costlier for publishers and marketers to mail advertising circulars to potential customers. As a result, printing services providers have started facing challenges when it comes to regulating the costs.

Many such factors are compelling firms in the printing service space to leverage the use of spend analysis solutions.

The Business Challenge and Journey

The client, a leading printing services provider with business units spread across the globe, wanted to streamline their logistics chain as they were facing predicaments in reducing the cost of their sourcing and procurement processes. Additionally, the client was also facing challenges in operational functions, which restricted them from increasing efficiency and streamlining their supply functions. As a result, they wanted to identify an automated sourcing and procurement solution that would help them organize the entire process.

SpendEdge’s spend analysis specialists tailored an integrated two-step research methodology, which included qualitative and quantitative data collection methods to help the client formulate an efficient cost-to-serve model. The specialists also collected information from a wide array of reliable sources trade shows, industry forums, and company presentations in the printing services space.

During the course of this spend analysis engagement, the printing services provider was able to devise robust built-in category-specific dynamic pricing structures that helped them in assessing the trade-off decisions between quality and price. The client also identified the areas for process improvements and cost reductions by gaining real-time insights into their procurement activities and expenditures.

Key questions answered in this spend analysis engagement

The Results

The spend analysis engagement helped the client identify the best-in-class suppliers in the printing services space which, in turn, helped them significantly cut down the prices on high quantity products. Furthermore, the client captured the data and formulated an efficient cost-to-serve model with the desired outcome for quality offerings.

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