What can MultiPress do to reduce your paper and substrate costs during the international paper crisis?

21 Mar 2022

What can MultiPress do to reduce your paper and substrate costs during the international paper crisis?

The paper crisis in the print media sector has been going on for some time now, and there is no end in sight: the market situation is expected to remain tense in 2022, and we have to expect continued high prices and uncertainty of supply. Admittedly, this is not very motivating; however, it does not mean that you should give up. In this blog, we will show you the various ways in which MultiPress can help you take a smarter approach to managing your purchasing during this paper crisis and avoid costs.

What's going on?

Shortages of raw materials have meant that paper has been in short supply for months, and this has affected the entire print supply chain. The huge imbalance between supply and demand has resulted in an unabated run on paper.

A second important factor in this crisis is the rising cost of energy. The production of paper requires a lot of energy, and so there was already talk of an additional energy tax on the price of paper in October 2021. More than that: in one year, the prices of electricity, oil and gas in many paper-producing countries have almost tripled.

Beatrice Klose, secretary-general of Intergraf, recently warned that the war in Ukraine is also having direct consequences on the print media sector: a further increase in paper prices due to the rise in energy costs is undoubtedly imminent.

Temporary remedies

This complex crisis is forcing you to be creative with your print production: printed matter must be produced more economically. Fonts are becoming smaller, formats and paper types are changing, and adjustments in the finishing of printed matter all contribute to a lower production cost. But this is more of a compromise than a solution: the quality of the end product is so different from what the customer initially had in mind that he is not always happy with it.

In addition, you must also take into account the frequent price fluctuations when you submit an offer to your customer. When you make a quotation, you use the prices available in the catalogues of paper and substrate suppliers. That quotation is approved after a while and becomes an order. Only then does the purchasing department order the required material. What happens: the paper or substrate cannot be delivered on time and the price is a lot higher than what you offered the customer. And in the long run, these are large amounts: more than 10% in a few weeks is no exception. This leaves you with the choice of either proposing a new, higher price to your customer or absorbing the additional cost and putting pressure on your profit margin...

These remedies are like sticking a bandage on an open wound: if you carry on like this for too long, you will lose profit or your good reputation as a quality print media company may not survive. You may be able to count on the goodwill of your customer for a while. However, you do not want to lose your competitive position, remain a reliable supplier with correct prices and prefer not to have to go back on previous price agreements and delivery dates.

Smart purchasing management with MultiPress

Obviously, MultiPress will not solve the paper crisis, but it will allow you to monitor your purchasing management more intelligently to reserve and order material more quickly.

Recently MultiPress was equipped with automatic synchronisation of paper and substrate catalogues within the purchasing management. This means that you always have an automatically updated price overview within the catalogues of the various suppliers, directly available in MultiPress. These updates happen much more frequently nowadays than in the past due to the paper crisis. Because you have the most up-to-date data available in MultiPress, you save a lot of searching work, avoid calculation errors and make your price calculations even more accurate.

Another phenomenon we have noticed is that customers anticipate the paper shortage and insist on reserving print jobs well in advance. This makes the puzzle for your print media company even more difficult: more work, more urgency but also more uncertainty about when to buy supplies with an eye on the delivery time.  For this reason, the purchasing management in MultiPress is now equipped with additional tools that allow you to perfectly estimate which materials will fall below the minimum stock levels in relation to all created orders in the long term. This way, you know exactly what the stock levels will be in a week, a month or even six months from now. With this knowledge, you can take timely action to avoid stock shortages.

These new MultiPress innovations give your print media company control over the cost of paper and substrates at the level of stock management and purchasing. In this way, you too can better cope with today's volatile paper market and avoid unpleasant surprises halfway through a project.

 

Christoph Krohn, Product Director, about the paper crisis