Christian Bell of POINT South Africa tells SmartProcurement about the company’s ongoing print management at Absa, a leading financial services provider and a member of the Barclays Group, and how audited savings of 34% were achieved.
Background
“In July 2008 Absa South Africa recognised the need for rationalisation of print procurement throughout the organisation. The organisation’s procurement department had targeted reduced costs, improved quality and shorter lead times for its print and related services categories as urgent and important needs.”
“In recognition of the need for a comprehensive solution for the ordering, management and delivery of print throughout the organisation, Absa decided to adopt a web-based operating system that would be easily accessible and that would fit into the existing Absa framework with minimum disruption. Absa’s view was to access the best possible print prices without compromising quality through the implementation of this operating system, under the management of POINT – a leading South African print management company,” Bell told SmartProcurement.
“What follows is an overview – a year since Absa made the decision to outsource its print – of the first nine (9) months of POINT’s management of Absa’s print, and a summary of the key effects of the introduction of the POINT print management system to the organisation.”
Why print management?
“Throughout the organisation, Absa acknowledged the need to focus on its core functions and to outsource non-core functions. On investigation of the extent and nature of the need, as well as in investigations into the potential for savings and efficiency enhancements within Absa’s print-buying processes, a number of key shortcomings in the approach were identified:
• The point of sale material (POSM), promotional packaging and displays print supply chain processes were being handled in a very fragmented, country-specific approach.
• There was limited knowledge inside the organisation on print production and associated technology, resulting in few POSM print specifications being standardised, negatively impacting production efficiencies.
• Pre-press and colour management practices were underdeveloped.
“These, and other issues, combined to create a print procurement process that Absa recognised would benefit from centralisation, rationalisation and potentially from outsourcing.
“Through exposure to POINT, Absa began to realise the considerable benefits to the introduction of a print management system in point of sale material, promotional packaging and other print categories. The benefits that Absa sought from both process and cost improvements included:
• cost reduction from improved sourcing practices and leveraging regional synergies;
• reduced lead time to match competitors;
• improved quality and the achievement of better brand compliance;
• increased transparency and improved reporting; and
• increased control and centralisation.
Implementation
“With these, and other issues in mind, Absa made the decision to engage in a print management initiative. The company went through a comprehensive screening process, and selected POINT as its print management partner, based not only on cost, but on our proven track record, the breadth of its service offering, and the nature of the value-adding strategic partnership proposed,” says Bell.
“Together, Absa and POINT began to plan for implementation. The decision was made to implement in a phased fashion with a six-month initial phase to precede company-wide implementation. This involved POINT establishing an operational centre within the Absa offices in Central Johannesburg initially to procure only a portion of Absa print spend. This phasing ensured a smooth systems and organisational integration. A comprehensive training and change management programme, aimed at easing the transition and ensuring maximum compliance ramp-up, began in parallel with the customisation of the POINT system to Absa’s specific needs. This phased plan has been designed such that at bi-annual intervals the project is reviewed and success is tracked. The system was progressively implemented across divisions with phased-in additions of related product offerings.
“Through thoughtful planning and careful management, POINT’s integration and implementation have been successful with print volumes and user numbers progressively increasing. Compliance increased rapidly and volumes passing through the POINT system increased consistently at a fast pace.
Key successes
“After nine months’ engagement with the team reviewed the progress of the POINT print management campaign, including its key successes and key concerns. The overview was positive, with POINT having exceeded expectations on all of the key metrics outlined as performance indicators. These successes are summarised alongside
Proven Cost Savings
Bell continues, “POINT applies a rigorous approach to analyzing the savings accruing to its clients resulting from the implementation of the POINT print management system. On entering a new client site, a baseline database is compiled of historical print jobs commissioned by the client in the year prior to the introduction of POINT, including details on the specs of each job. This baseline is adjusted for inflation and the paper price index. Orders placed and accepted in Noosh (the POINT software system) are then evaluated versus comparable jobs procured and managed by POINT, where comparability entails a match on key criteria as pre-agreed with the client. Where a match is found, the saving is calculated as the percentage difference between the baseline price (i.e. the price paid prior to POINT’s arrival) and the price of the estimate accepted by POINT. The dimensions on which a match is typically sought include:
• Dimensions (height and width) – exact match
• Number of pages – exact match
• Number of colours – exact match
• Paper grammage – match within a small margin
• Quantity – match within a small margin
“Additionally, the measurement of buying efficiency savings is important – the difference between the average and accepted quote. All bids submitted for each job are, therefore, regularly measured and reviewed to ensure continued buying efficiencies and tracking thereof.
“These cost savings were tracked and reported on a monthly and job-by-job comparison basis, and exceeded the initial savings targets of 15% across the board. A summary of these savings measures can be seen below for the POINT print management program’s first 9 months in Absa.
The audited savings as at the end of Q1 2010 were 34%.
“These cost savings are felt at a macro-organisational level, all the way down to the brand teams, who found their marketing budgets stretching much further than before, giving them ‘more brand for their Rand’, as is evidenced by users’ comments below from Absa POINT user satisfaction survey conducted in February 2010. THese comments include;
“By using a 5-way quoting system they save Absa a lot of money”
“As far as I am concerned, POINT is forever cost efficient”
Particular examples of savings achieved are outlined alongside.
Consistently High Quality
“Suppliers are routinely evaluated to ensure consistent quality and on-time delivery, resulting in improved quality on all aspects of printer performance, including colour management, on-time delivery, improved customer service and ease of communication.
Jeff Hudson, Chief Operating Officer, Group Marketing & Communication at Absa, in the same satisfaction survey said, “after a robust selection process Point-SA were chosen to manage Absa’s print due to their knowledge of the print industry and their ability to get the best price without compromising on quality and turnaround times. Having them on site also resulted in a seamless integration with our marketing and communication teams”.
Enhanced Competitiveness
“POINT has introduced competitive dynamics to the print procurement space, resulting in suppliers bidding competitively on jobs for which they are best equipped,” continues Bell. “POINT used Absa’s existing printer panel, but has been able to enhance inter-printer competitiveness through the introduction of competitive bidding and ongoing supplier evaluation and management tools. Jobs are allocated to the best-matched supplier for the job, which has in turn resulted in increased ease of printer management, increased clarity and transparency of specification creation and tendering, and increased accountability and clarity of reporting and performance management.
POINT works closely with the printer panel on an ongoing basis to train them on the use of the system, ensuring on-time supplier payment, and providing one focused point of contact.
Satisfied customers
“Absa customers have indicated their satisfaction with the cost and efficiency benefits that POINT has facilitated. POINT conducted a customer satisfaction survey amongst Absa POINT users, who cited general process efficiencies and time-to-delivery improvements due to the introduction of the POINT print management system.
“The turn-around time is reduced for urgent jobs. I also get regular updates from [POINT] on the status of quotes and printing jobs.”
A summary of the results of the user satisfaction survey can be seen alongside.
High Compliance
“Maverick spend has been controlled and compliance with POINT is high. The number of POINT users within Absa has increased from 3 or 4 in the first month to over 20 at present, and the value of orders placed in the POINT system continues to increase strongly.
“The benefits of employing the services of Point SA were observed and realised within the first three months of implementation. A year after the implementation, we are continuing to benefit from the specialist print procurement services offered by Point SA. We are investigating further opportunities for Point SA and Absa to pioneer industry transformation in the way that paper and printing is consumed in South Africa and Africa,” commented Michael Arendsen, of Group Sourcing, Absa.
Enhanced Control
“Print is not a particularly visible commodity,” explains Bell. “POINT has provided Absa with access to, and the ability to create, management reports from the POINT software system, Noosh. This has provided Absa with over 25 standard reports on job activity, project status, estimate analysis and vendor performance, which has increased transparency and facilitated reporting and accounting on print-related spend.”
“Through establishing an on-site print management centre (PMC), all print purchases began to be channelled through one central point, enabling Absa to obtain uncompromised data on print and paper buying throughout the organisation, and allowing Absa print vendors to bid for print work on an equal footing and enable the effective management of Absa’s Corporate ID throughout the bank.
Conclusion
“The POINT / Absa symbiotic partnership has been a resounding success, providing both parties with opportunities for learning, mutual efficiency enhancements, and mutual benefit. Absa continues to embrace print management and is setting the pace for this transformation.
What does the future hold? POINT is currently in the process of delivering extended functionality to Absa such as a paper management programme as well as a Digital Asset Management platform.
For more information on Print Management Services, contact Christian Bell of POINT SA on christian@pointsa.co.za
