Supplier Cost Drivers – Print Example
Administration20%
• Head-office• Accounts• Invoicing• Admin• Transport
Paper50%
Profit 10%
Paper accounts for around 50% of the total cost.
Plate production, Ink, Labour set up, Labour printing, Labour folding, Labour finishing, Packing-box and label, Depreciation, Stock, Distribution
Profit element, amalgamated into % mark up on the print element of the price
Printers’ operating costs
Various cost elements
20%
Agree on common national specifications
Reduce the format of prints to use less paper
Reduce the weight (from 80 grs to 75 grs for example)
Don’t use branded paper with watermarks
Don’t use colour paper
Buy the paper straight from a paper merchant
Combine print paper with paper for office printers
RecommendationsTypical cost breakdown shows that the supplier’s main cost driver is paper
By reviewing the specifications and negotiate wider deals on paper, the organisation could reduce their print costs
Example Product Cost Drivers
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