By Ritchie Mayes, Manufacturing Budget Manager
In my fifteen years as a manufacturing budget manager in the printing industry, understanding how manufacturing cost affects the budget and products offered is necessary. Therefore, the is: “Do you as a manufacturer know your product?” If you can not answer, then learn the product thoroughly!
I use three criteria to determine knowledge of the product: first, I must know what is being manufactured; second, why manufacture the product manufacture; third, what the intended use of the product? Having knowledge on those key factors allows me to quickly asses if the company has the necessary expertise i.e., the labor and equipment and knowledge to produce custom manufactured printed products to do all necessary functions required to produce the product or if all or part of the manufacturing requires outside contractors to complete the job; in the printing industry all costs including inside and outside steps necessary to complete a job is passed on to the customer. The printing business focuses on producing costume manufactured printed products- every order is manufactured to meet the specific demands of the customer.
For instance, I answered a call from a repeat customer wanting to know how much will the redesign and manufacture of new letterheads and envelopes and business cards costs? I answered-based upon the specifications you provide to me, the cost will vary 10 to 15 percent from what we usually charge you as a repeat customer.
My extensive knowledge in all phases of the printing industry which includes: operating presses, scheduling jobs as production manager, working with graphic designers, generating estimates on costs and managing manufacturing budges; and my knowledge of outside vendor costs (supplies necessary to produce the order) the years of experience and knowledge of the chosen employee to correctly do the work, the time necessary to manufacture the order, which machine the job will be printed on and the time necessary to produce the order- gave me the confidence to be secure in my answer the customer.
All the variables covered necessary to secure the job, the customer happily agreed to the stated estimated price in the conversation and within an hour faxed over a signed contract authorizing work to begin on the project. More importantly, the price conformed to the budget guidelines because I fully understood where the spread or profit margin was for the company, which allowed the company to earn a profit from my conversation with the client.
In the economy today: many companies are issuing lay-off notices to employees or downsizing or cutting back on employee hours or facing closing its doors, the one key factor in circumventing any of the previously stated options and surviving, is product knowledge.