What works with CTP quotes
A platesetter, changes the rule of estimating. Here's what to keep in mind
More than two dozen metal CTP systems have been installed in the past six to nine months, according to industry surveys. These installations are now in mid-size print shops and, for many, this is their second CTP purchase.
These installations usually mean that new estimating and pricing strategies must be developed; at Pilot we’ve even been asked how to estimate specific tasks like RIPping the file. But, in order to design a process, it’s necessary to look at the variables involved, since calculating the ROI on CTP requires its own approach.
For example, how do you recover the cost for re-training employees? Do you factor in the process improvements of shorter makeready time and reduced press spoilage in your estimates? Another cost may be the expense of keeping a conventional workflow while the CTP system is being installed.
If files are too large to send over ISDN or DSL lines, CDs and other media can be just as effective. But if you maintain an FTP site, have high-speed connections and a collection of media capabilities, these expenses should be recovered through overhead recovery techniques. The most accurate way of doing this is to recover operator time, or develop a rate per Mb. However, some customers may object to these charges, believing them to be your cost of doing business.
Reviewing customer files
This process can be a traditional, activity-based costing process with an operator examining customer files with preflight software and identifying specific problems, such as missing fonts, images, graphics or links. Cost factors may be most accurately based on file size, but accurate information is rarely known during the estimating stage. Therefore, standards based on number of pages, modified by page size, complexity and colour configuration would be more appropriate.
When file issues have been identified, an operator needs to make the corrections. This is usually a charge-back based on time and materials that frequently requires estimating in advance for customer approval. Subject to how competitive your prices need to be in your market, they
may feature a built-in correction process or this may be an additional cost.
Depending on your customers’ ability and expertise, files may arrive in a native language that you must convert to PS, PDF or TIFF/IT. In each case, a different amount of work needs to be done. However, for repeat clients, you should invest in establishing file standards and standardizing processes, as well as in training their people. Build this cost into the quote and do not identify it as a separate operation.
Most CTP facilities can generate contract proofs but, as they are not required in all cases, charge for them. That said, plotter imposition proofs should be produced as a standard internal QC function and built into the base estimate cost.
Soft-proofing (remote proofing)
With digital technologies and workflows, remote proofing can be as simple as sending a PDF attachment and e-mailing it back for approval. Other variations include installing and calibrating digital proofing devices at a remote client facility, and outputting contract proofs at the clients’ site. The soft proofing process is usually unique to each customer, so determine your specific cost for each and build it into your quote.
Trapping, imposing, and RIPping
These are standard processes. Some operations even remove customer-applied trapping and apply standard trapping when they RIP the file to ensure consistency and control quality. Since trapping and imposing files are standard operations, a labour allowance should be built in. RIPping the file is a process that goes on while the operator is doing something else; the cost recovery should be part of your overhead.
So far, the operations would be similar for either a film or filmless process. So, a $10 plate may need a $30 recovery in order to allocate these costs. The figures are subject to actual material costs, labour costs, spoilage, utilization and depreciation.
Archiving and storing
Do you store final files temporarily, for a long time, or not at all? Depending on your customers’ requirements and product type, you must decide if this is a standard process, whether a specific investment is required and how cost recovery will be achieved.
Since the “need for speed” is often an overriding concern, some printers develop a simple process with base factors like number of pages, number of colours or number of plates to estimate a CTP job. The idea is that these factors accurately represent the amount of work required for each job. In operations with similar work and workflows this may be true.
But, if the reality is that the amount of time to process each job varies significantly, then you may put too much of a cost burden on some customers and not enough on others. Over time you will win a higher proportion of the jobs on which you under-recover your costs, and lose the jobs on which you hope to over-recover. For commercial printers, the critical element is to recover costs accurately based on the amount of work required.
A printer’s primary material is paper. Merchants and mills are continually changing and improving product lines to be competitive. Why not have your main merchant do a presentation on new products and updates annually or more frequently? Don’t forget to include ink and coating suppliers; request periodic updates from them, too.
The old saying “a good workman never blames his tools” might still be valid in some areas, but not all. You can’t compare the efficiency of a power-saw to a hand-saw. The same can be said for estimating software. A top-notch estimator can only do so much with an outdated estimating system. Continuous improvements ensure that your company is using the most current version of the software, and that updates have been loaded. Many companies let their software maintenance and service contracts lapse, which limits access to the latest tools. This applies to your current pricelists and defined processes: keep them current.
Estimating training is the basis for a successful career, however, it’s only the beginning. There is no substitute for experience. Every company should have formal employee performance reviews, and the feedback process should include a review of training requirements.
Service level agreements
Service agreements outline service levels and what’s expected from both parties. Monitoring turnaround times for quotes indicates how successful your company was in achieving them. Of course, companies need to be realistic. Mandating a reduction in quote turnaround times won’t be effective unless estimators have the tools and resources to improve this service.
The key element throughout this discussion of continuous improvement is measurement. If you don’t know what level you’re at now, there’s no way to know if changes are improvements. Measurements should be easy to track and understand, and statistically sound.
Some jobs have built-in measurements to gauge effectiveness. For instance, sales reps are compensated on sales results. Measuring estimating activity should be used as a management tool to recognize those who put in extra effort, peak volumes of activity, and when estimators and other departments require added support.
You may not be able to put all of these ideas into action, but if you can find something that will improve your organization, we have succeeded.
Bob Dale is the president of Pilot Graphic Management Services Inc., a company providing management consulting and custom training for organizations. He is also on the executive of the Toronto Club of Printing House Craftsmen. Bob can be reached at (416) 410-4096, or via e-mail at email@example.com.