Procurement people buy beyond borders

Frank Romano
Thursday, June 2, 2011

You can't look at the supply chain in a vacuum. We're in a world market and procurement is a global thing.

No nation or industry is an island. Each is inter-related with many other nations and industries. We often look at the printing industry and fail to see the printing business, which is global in nature, and encompasses a far wider array of service sectors than many realise.


Forty percent of major US print buyers believe there is a trend toward purchasing print globally within their company. Corporate buyers are focused on streamlining worldwide procurement processes and implementing technology on an enterprise-wide basis. Buyers will reduce the number of suppliers they utilise. Supplier qualification programs will emerge for all volumes of procurement.

Globalisation means a world market where goods, money, and people cross international borders as freely as possible. Modern transportation and communications, especially the internet, have facilitated globalisation. Over a decade, there was a 420% increase in the volume of imports and exports, according to the World Bank.

Mid-size to larger Canadian printers and converters generate about 40% of their revenue from US customers. Asia is growing rapidly in manufacturing. Consider the products that are made in Asia for wholesale and retail firms around the world. Those products are placed in boxes, and those boxes are packed in larger cartons for shipment to other countries. No one counts the printing value for those boxes as that shipment enters the new country. Customs officials only see the products.

Publishers have moved their reprinting overseas. States may require that a textbook is printed in its home country, but the reprints may move to international sites. For many years, so-called "coffee table books" have been printed overseas because these products had long lead times. Today, electronic file transfer moves print into production faster.

These examples are only the tip of an iceberg that represents the volume of printing being done in many parts of the world. Asian plants, as well as plants in Russia and the old Eastern Bloc, are not applying old technology. All have installed up-to-date CTP and automated press equipment and are capable of producing at high quality levels.

However, as print runs get shorter and schedule demands increase, more printing will have to remain closer to home. Printers have already seen the nature of volumes change. Shorter-run, time-sensitive jobs will not lend themselves to offshore production. Some packaging printers may see the first effects of this new world order, followed by specialty printing. The key will be the time-sensitivity of the material. This will also include the interface to the US postal system because many printed products must be sorted for mailing. Larger catalogue and periodical printers often inter­mingle pieces from different publishers to get maximum postal discounts.

In 1980, 70% of all print in the US was purchased from a printer within 100 miles of the customer. Today that percentage is 45% and dropping. The ability to send files electronically and collaborate online for changes and proofing have made the physical location of the printer less important. US print buyers are doing business in many states beyond their own and are buying print outside of the country. The market is both local and global.

Frank Romano is professor emeritus at the Rochester Institute of Technology.


 

This article appeared in the September 2010 issue of ProPrint.

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