Transparency (and Opacity) in Print Procurement and Print Tenders.
If you’re running a print tender, you’ll no doubt appreciate just how important supplier transparency is. Not just to find sustainably lower prices, but also to achieve the ongoing trust that’s necessary to underpin true supply chain collaboration and the extraction of maximum value in all its shapes and forms.
But, like many procurement categories, the purchasing of print has always suffered from a huge lack of transparency.
So, as a person running a print tender, what do you need to look out for to ensure effective and transparent procurement?
Print Tenders and Capacity-driven Rebates
Within commercial printing in the United Kingdom, the main culprits of opacity are both print and paper procurement rebates. It’s a capacity-driven rebate system whereby paper distributors and commercial printers offer (or are requested to offer) financial rebates dependent on guaranteed order volumes being placed with them annually or over the course of a contract.
Of course, there can be an upside to the rebate process. Volume-driven rebates encourage closer ties between printers and their customers and give a certain level of financial certainty linked to turnover. But large rebates can effectively represent large hidden extra costs, so be sure to ascertain what rebates your suppliers have in place to ensure they’re reasonable and sustainable.
The Solution to Opacity = Print Pricing Transparency
When inviting printers and intermediaries such as agencies to be involved in your print tender process, you can now ask for full disclosure of any rebate structure they may be running with their suppliers.
You can also include a pricing audit so your auditing department have the right to check purchase and sale prices across the term of your contract.
These actions can result in more transparent pricing and reveal the prices paid by your print suppliers: though unless you have a more forensic style of accountancy, rebates can be hard to uncover.
However, there are better ways to operate – ways that don’t come with quite so much supplier/customer friction and set up your supplier relationships on a more positive and collaborative note.
New Models to Procure Print more Transparently in Tenders
At Webmart, we’ve spent a considerable amount of time working as transparently as possible and developed transparent ways of working with our customers, whether through a tender or framework.
It has to be said that transparency is at the core of our operation and very much in our DNA so these ideas aren’t always easy to implement with more traditional print procurement businesses. However, we’ve developed print supply chain relationships and transparent procurement processes throughout our business as we feel they increase the likelihood of collaboration and fairness throughout our print supply chain and these methods can be applicable to your print procurement too, ensuring you’re getting the most sustainable low pricing when you’re running your print tender.
Sustainable Print Pricing that’s Fair for all
Sustainability in this context is trading at a price which is fair to your suppliers and allows them to continue profitable trading and adding real value to your business ongoing.
To this end, we’ve created digital tools to procure and manage print projects with as much pricing transparency as possible, so everyone knows where they stand and that all aspects of pricing is exposed.
We encourage all our suppliers to make a fair margin and will sometimes procure above the lowest available price where we have good reason to know a price isn’t sustainable. It’s not in anyone’s best interests to support cut-throat pricing; it’s not sustainable, can often result in a substandard product and in extreme circumstances bring unnecessary risk of default on delivery into the process.
New Transparent Models of Print Procurement
Where we have a longer term commitment to an organisation – often when operating through a framework or having successfully won a tender – we have developed a variety of models to provide demonstrably transparent print procurement processes.
Working in a transparent way reduces friction between us, our customers and suppliers and, we find, removing the suspicion around print pricing allows for much greater collaboration between all parties. It also fosters a much greater level of investment (of all kinds) in your organisation by your supply chain, encouraging them to look for new ways to add value to your business.
In one transparent procurement model – one we use in our position as print supplier for a very large UK hospital group’s health insurance division – we have an agreed pricing structure and an open-book policy whereby our customer has the right to audit our accounts. All print procurement is carried out using our digital tools and pricing is pre-agreed in accordance with the tender. Projects are managed through our online print portal – and project pricing is available for every project.
Another example of our transparent print procurement model – in this case notably used with a large UK national grocery chain – we operate using an agreed project management fee only. Our customer can see all our buy and sell prices, can see exactly where our print prices have come from (which printers across our UK supply chain) and can clearly see our fixed management fee across all purchases.
Again, these open book policies give pricing certainty to our customers and radically reduce the amount of distrust in the supply chain, leading to a huge emotional, intellectual and financial benefit to all.
If you’d like to speak to us directly about print procurement transparency or any other print procurement matters – or to invite Webmart to participate in your print tender, please fill out the form below or call 01869 321321.