Dickeson--Don't Be Stupid About Paper
(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?