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Dickeson--Don't Be Stupid About Paper

September 1999
"It's the economy, stupid" is the now oft-quoted statement coined by political consultant James Carville during Bill Clinton's 1992 campaign for the presidency. It simplified issues of the Clinton campaign against an incumbent president basking in high opinion poll ratings. The phrase focused that presidential campaign on the concern of a majority of the voters of the country at that time.

What Carville did was modify the old KISS principle: Keep It Simple, Stupid. Focus was needed for the campaign, and he supplied it. Simplicity, for Carville, was the economy.

"It's the Paper, Stupid!"
Now it's our—the printing industry's—time to focus, to simplify. "It's the paper, stupid!"

Paper is our thing. We convert raw paper to printed materials. Weight, grade, printability, surface, consistency, brightness, strength and cost of paper control our destinies. These are our paramount concerns as printers, concerns shared by our publisher customers. For real estate, the three cardinal rules are location, location, location. For printing and publishing, the three rules are paper, paper, paper! For us, it really is the paper, stupid.

Remember the WOW—War on Waste—campaign back in the mid-1970s? It gave us focus on the usage of paper to enhance productivity a quarter of a century ago. It's time to refresh our perspectives, renew the immediacy of that message, re-charge our batteries.

To illustrate the significance of paper, let's take an extreme example. The new web offset presses are not only faster, they're wider. One of those new presses, printing for 55 percent of available hours in a year, consumes 35,000 tons of roll stock. At $50 a hundredweight, that comes to $35 million annually! (Those numbers do have a way of narrowing the focus, don't they? It truly is all about the paper, isn't it?) Just a single percentage point of paper used in a year to operate that press is worth $350,000.

(Question these numbers? Drop me an e-mail, and I'll send you the assumptions and calculations.)

That's at one end of the paper spectrum for web offset…for the time being. Think magnitudes. Turning over your inventories 12 times a year, you need space in the warehouse for 2,800 tons of paper for one press. If you're furnishing the stock and collecting receivables in 45 days, you have around $4 million in accounts receivable generated by just the paper for that one press.

Add that to $3 million of raw stock inventory, plus in-process and finished goods inventories, and the claim on your working capital resource tops $7.5 million a year. Now suppose you had two or more of those presses in your plant! OK, scale it down from that Himalayan level for your shop. Relative impact of paper is the same as a capital resource consumer—always.

It ain't rocket science, but it's still complex trying to analyze the macroeconomic impact of paper stock for the printing business. You start with a "ream" as the unit of measure. A ream is akin to a "cubit" dealt with by a Mr. Noah while constructing an Ark. We consume in "M"s (thousands) in printing, not 500s. But wait, it gets worse. We use paper in a linear dimension, by the foot. But we buy it by the pound or gram. Somehow we convert pounds to linear.

Did I say "by the foot?" That peculiar unit of linearity is a third of a "yard." The "yard" is the distance from the end of some ancient king's nose to the tip of a finger on one of his extended arms. (It all makes a lot of sense if you enjoy working the daily crossword puzzle!) When the Flat Earth Party dominates the Congress, we'll change all that, won't we? If it is indeed the paper, stupid, then why don't we keep it simple, stupid?

The Subtractive, Albeit Confusing, Nature of Inks
Enough already? Add THIS to the general confusion. Consider the "subtractive" nature of the inks we use to print process color on that paper medium. All of process color comes from the paper. Laying down ink is subtracting. (You must reverse the polarity of your thought process.) We don't add color to the sheet for process color. Cyan, magenta, and yellow inks are liquid filters that subtract from the basic color property supplied by the paper.

Process inks block out wavelengths of the spectrum emitted by the paper. If the desired color property isn't available in the paper, we can't produce the color the customer wants, can we? It's the paper, paper, paper, stupid!

Hold on a moment. Forget "process" color and now think "match" color. Reverse the negative polarity of subtraction and apply inks as "additive" color. Whole different ball game! Maybe it's all closer to rocket science than we suspected. One minute it was the color of the paper and the next it's the color of the ink. And, to simplify it even more, we do it all with "half" tone dots!

Cutting Out Intermediaries
The "dot com" companies of the Internet like Amazon, Buy, E-bay and dozens more have taught us the power of "disintermediation" in a hurry. That's simplifying by cutting out the intermediaries—that is, the retailer/broker/agent/wholesaler supply chain thing. We must do the same for the paper information chain. Paper mills must have direct access to our operating databases for our usage experience to bring us closer to the JIT inventory ideal and to analyze problems.

The accountability relationship, complicated by publisher customers supplying paper stock, needs a lot of clarification for simplicity. We love to have customers relieve us of the demands on our limited working capital resources by eliminating the cash drains of inventory and receivables for paper. But we—and our customers—are intermediating instead of "dis." Close "partnering" with the paper mills is obfuscated by another layer of accountability. Solve it. It's the paper, stupid.

Annual "settlements" of paper over/under consumption for supplied paper printing contracts are akin to trauma triage worthy of "ER" on TV. No more. Settle consumption allowances as a part of the invoice for each issue. It can be done. KISS.

Also, let the publisher know the extent of its butt roll inventory with each issue. That'll be a Dristan—a mental sinus clearer. Let the mills know the reject inventory with each issue.

Time for a reality check. Time to simplify. It is the paper.

—Roger V. Dickeson

About the Author
Roger Dickeson is a printing productivity consultant based in Tucson, AZ. He can be reached via e-mail at roger@bigfoot.com or by fax at (520) 903-2295.
 

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