BY Howie Fenton, Rochester Software Associates: Each time we think the pandemic challenges are over, we learn that it is not over. As the year ends, we find that this is still true, meaning that we may discover new and possibly more serious issues next year. Research shows that not only will we continue to experience supply chain and staffing issues, but we could also experience pushback from customers about price increases and slower turnaround times. In the worst-case scenario, this could result in questions about the value of print or, worse, the value of the in-plant. This article will discuss the threats, the loss of value and offer suggestions to reduce this threat.
In a recent NAPCO webinar entitled “The Three R’s of the Post Pandemic Commercial Printing Industry: Rebound, Reset, and Reimagine”, Andy Paparozzi, the Chief Economist for the Printing United Alliance, reported on his State of the Industry report. In the webinar he discussed the good news, the bad news, and I have added the ugly concerns. The good news is that the sales forecast for commercial printing sales in 2022 is between 5.2% and 6.2% increase.
The bad news is that supply chain issues will continue to reduce materials availability, resulting in increasing prices. The higher costs are not limited to materials but also include shipping, staff compensation, consumables, and energy costs. In addition, we are also hearing about in-plants struggling to hire and that are working shorthanded. But the most significant issue described in the State of the Industry report was a prediction that customers’ tolerance of price increases and service issues this year will not be accepted next year.
That could be the ugliest news because all of our research shows that customer satisfaction for in-plant customers is based largely on meeting or exceeding on-time delivery and competitive pricing. The possible solutions create additional problems. If you are short-staffed, you can try to meet delivery schedules with overtime, but that adds cost. If you don’t pass the higher material costs to customers, that will result in lost revenue. Both could impact your ability to meet your financial goals. How can we reduce the impact of these challenges?
Three Strategies for Getting Ahead of Cost and Labor Problems
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SOURCE Rochester Software Associates