17 surefire ways to trim production costs - publishing industry

Folio: The Magazine for Magazine Management, Annual, 1994 by Peter Pallans

A handy checklist helps you examine your operations to make sure you've considered every saving angle.

In cost-cutting, one of the first things to remember is that everything is relative. While some savings can be gained only by high print order publications, other savings can be attained by all publications.

Relativity is important. On one magazine I worked on a 1% savings in paper amounted to 750,000 lbs. annually which was worth more than $300,000. On another magazine 1% totalled 840 lbs. annually, worth just over $400.

Another important thing to keep in mind is fairness. It is not wise to enter into a contract that is unfair to your supplier. He will only try to get out of it when business conditions change. Also remember different printers place their profit margins in different areas of their contracts. Do not compare different contracts section by section. Make sure to compare the entire package.

Another question is whether you are doing things today the same way as in the past only because "that's the way we always did it." That could be the worst reason for doing something in a specific manner.

The following suggestions are some basic considerations for trimming production costs.

1. Trim Size Reduction--Reducing the trim size of a long run publication can save considerable dollars. If you change the trim size of a magazine from 8 1/8" x 10 3/4" to 8" x 10 3/4" you can save 1.5% of your paper costs. On an annual usage of 10 million pounds this is a savings of 150,000 lbs. of paper worth approximately $75,000 based on today's prices. You have further reduced your postage costs by another 1.5%.

2. Basis Weight Reduction--As with trim size reduction you can save considerably by reducing the basis weight of your publication stock. If you reduce the basis weight from 34# to 32# you have a weight savings of 5.9%. As in the sample above if you purchased 10 million pounds of 34# stock you would only require 9,412,000# of 32#. Even with the existing price differentials this is a savings of $97,500 annually. As above it also represents a reduction in your postal costs by 5.9%.

3. Paper Grade Reduction--Reducing the quality of the stock you use is another alternative for paper saving. The differential between number 4 publication grade and number 5 publication grade is approximately $1.50/cwt. On 10 million pounds annually this is a savings of $150,000. On short run publications this can also represent considerable savings.

4. False Lap Printing--On saddle stitched publications the printer requires a binding lap of 3/8". This is necessary for the binder's grippers to grab a signature out of a hopper and place it on the bindery chain. In false lap printing any form that delivers interleaved (usually 16 and 32 page forms) can be produced with two different roll sizes which allow for a paper saving of the bindery lap size (3/8"). If the normal stock requirement is for a 33 3/8" roll you can use this size for one web and a 33" roll for the second web. The interleaved form will deliver with a bindery lap on half the pages giving the bindery grippers enough lap to remove the signature from the hopper. This gives you a paper savings of approximately one-half of one percent.

5. Waste Allowance Adjustments--Waste allowance should be readjusted annually with a ceiling placed on a maximum amount. This will insure that a printer doesn't show consistent under usage because he started with too high an allowance.

6. Cuts Made Not Used--Having separations made is an expense regardless of print order. Very often art directors will send photos out to be separated "just to see how they will look." Separations can run anywhere from under $200 to over $1,000. If you can reduce the number of unnecessary separations being made you can make a direct savings to your bottom line.

7. Cuts Made on Rapid Schedule--Rapid cuts or overnights are another additional cost that can be controlled with a little advance planning by your art department. Overnight and rush premiums can be 100% of normal cost. While some separations must be produced on a rush basis, generally the more time you give your separator the lower the premium should be.

8. Ink Billed at Cost Plus--Printers will usually bill ink on a cost per color per page basis. This means that the cost to produce a page that has a full size four-color illustration is the same as a page that has a four-color spot. While this method usually averages out to an acceptable cost, if you have a high circulation publication it could be cheaper to pay the printer for his ink on a "cost plus" basis. I know of publications which average over $400,000 per month for ink. If they could reduce their cost plus percentage from 5% to 4% they could save $4,000 monthly.

9. Supply Your Own Paper--For this to work you should get an agreement with your printer that there will be no storage charges unless your supply goes over "x" amount of tons. Also there should be no or very minimal handling charges.

10. Total Print Contract Review--After a few years start over again. Due to technological advances your printer is probably running and binding faster. Even when your increases have only been running two or three percent annually this adds up after a number of years.