Strategically Speaking: 19 Tips for Better Cash Flow Management
3. Printer-Supplied Inventory: While printer-supplied paper can be slightly more expensive than publisher-supplied stock (printers usually charge markups), the economics warrant closer examination. Avoiding advance purchases and inventory-storage costs can free up cash.
Finished Goods Inventory Strategies
4. One-Stop Shopping: Publishers frequently opt for a “lowest cost” strategy that results in components being sourced from specialist firms, text paper sourced from the mill or merchant, and manufacturing sourced from a third supplier—causing three times the paperwork, coordination, and invoicing and payment based on the completion of the individual activities, rather than delivery of the end product.
Sourcing inventory, components and manufacturing from the printer can result in significant improvements in cash, as the printer typically will bill for all three services upon order completion.
While total cost may be a bit more than sourcing each element individually, the convenience of a single point of contact and coordination, and the extended cash cycle, are well worth considering.
5. Print-on-Demand/Short-Run Digital Printing: There’s little doubt that print-on-demand (POD) and short-run digital printing (SRDP) have “arrived” and proven themselves as viable alternatives to offset printing. While unit manufacturing cost remains a concern, the quick turnaround offered by digital manufacturing is impressive. When one considers the comparative cost of net units sold (including the value of unsold inventory) rather than unit manufacturing cost, the benefits of POD/SRDP are difficult to ignore.
6. Export Inventory Demands: Many publishers find themselves printing extra inventory for export to foreign subsidiaries and partners. Manufacturing for export typically involves extended cycle times to allow for ocean freight, and significant safety stock (aka “just-in-case” inventory) to protect against stock-outs. Sourcing from
local POD providers should be given serious consideration to meet your export needs. While unit cost may be higher, the improved cycle time, reduced risk of lost sales and lower investment in export inventory can offer significant cash benefits.