There's a FREE webinar tomorrow presented by PIA and it's not too late to signup.  This week's "Hotline" also provides insights into the cost vs. selling price argument as well as announcing an update to the industry video "Harvest of Wisdom."

Printing Industries of America is broadcasting a free webinar - Sizing Up the Future:  Can Small and Medium Printers Survive and Thrive? The webinar will be presented tomorrow (Wednesday, July 9th) and is designed to help firms assess the key issues and trends impacting small and medium size companies - now and in the future. The presentation addresses many critical questions, most importantly, how does a small to medium size printing firm thrive in the 21st century. The webinar runs from 1:00 - 2:00 p.m. To register, go to http://www.printing.org/events?event_id=277

 

Our annual Wage & Benefit Survey is underway. It has become the most comprehensive industry survey of its kind, and your participation is important. Please download the questionnaire and return it to PIA MidAmerica by August 1st. Participants will receive a free copy of the report - a $250 value!

 

The report includes breakdowns on hourly wages and salaried positions, as well as a tracking benefits including health insurance, overtime, vacation, and other HR policies.

 

All information collected is kept confidential. Questions? Contact Joe at (800) 788-2040, ext. 206.

 

In the mid-'90s, Texan Nolan Moore (who was PIA-Texas' executive director from 1972-1995) created a film which to this day is still used by many schools across the United States.  Its message focused on written communication - and print - and how they affected society and the 20th century world.  

 

This past spring a project funded by the Nolan Moore Foundation (Moore passed away within a year of the film's completion) updated the film with the assistance of University of Houston's Dr. Jerry Waite and Cal Poly's Dr. Harvey Levenson. 

 

"Harvest" begins its story 10,000 years ago with a narrative of how mankind began to use written communication.  Over the next 30 minutes, the film takes a historic journey with stops in Egypt, Europe, and North America telling the story of how writing - and more importantly print -- shaped civilization.  The film became slightly dated in the last few minutes because of the technologies being discussed are no longer in use.  Thus the reason for the update, which helps to ensure that the message is still relevant to the targeted audience of students in middle school and high school.  If you have never seen this film, or are interested in the updated footage, visit the Foundation's YouTube channel.

 

My associate in Southern California, Bob Lindgren, has been extremely vocal through the years/decades about the myths of budgeted hourly rates, and he recently wrote the following thoughts:

 

"If we accept that we are revenue maximizers and also accept (regretfully) that we don't have perfect knowledge, we need a systematic approach to predict the maximum price that a client is willing to pay.  The first step is to think about the core of our present process, the estimating system, which turns around budgeted hourly rates (BHRs).  This rethink should involve the people in the firm who have experience with the outside world - usually the CEO (if he/she is involved with sales), the sales manager and the sales reps.  Note that this group does not include the accountant nor the plant manager as their experience is internal not external.  This task force's mission is to make their best overall estimate as to the average rates in their market - about how much are competitors charging for a 40" 6/C, etc.?  Chances are that the answers are not going to be too much different from the numbers already in the estimating system."

 

I would argue (from years of experience) that if the firm was to calculate their "actual" budgeted hourly rates, there would be no correlation to their existing BHRs. It's highly probable that over the years the "cost" rates have been modified to reflect the market. And here' the heart of Lindgren's argument, "An extremely important shift in thinking has begun - we now understand that the estimating package is not a cost prediction process, it is an available price prediction process."

 

This is CRITICAL.  Most companies create a myth that the BHRs in their estimating system reflect costs of production - and entire processes are built to "try" to make the round peg fit in the square hole.  If we truly understand AND accept that our estimating system is used to create pricing palatable to the market place, we can then start using other methods to measure the costs of production and find ways to maximize our return on investment.

 

What are those other ways?  More thoughts to come in future columns.