australian economy and printing industry market conditions

Hagop Tchamkertenian National Manager for Policy &

Government Affairs

Printing Industries Association of Australia

The CIPSA Special Category Forum

Buying Office Supplies and Print

Print Communications – the evolving dynamics

ContentsContents

Contemporary trading conditions

Main issues facing the printing industry

Key features of the print management models

An overview of the print procurement principles (PPP) for government

Section OneSection One

Contemporary economic conditions

Economic GrowthEconomic Growth

Comparative rates of growthComparative rates of growth

SalesSales

InvestmentInvestment

Business confidenceBusiness confidence

Capacity UtilisationCapacity Utilisation

Production BarriersProduction Barriers

Labour & FinanceLabour & Finance

Section TwoSection Two

Main Issues & Challenges

Main Issues & ChallengesMain Issues & Challenges

Economic sustainability • Constant pressure on

margins• Printed matter treated as a

“commodity”• Idle capacity encourages

price competition• The dilemma of a “mature

industry”

Main Issues & ChallengesMain Issues & Challenges

Environmental sustainability • Addressing misconceptions

about paper and print• Exposing the true

environmental cost of e-media• Domestic production delivers

lower carbon footprint

Main Issues & ChallengesMain Issues & Challenges

Globalisation• Printed matter being

traded on global market• Emergence of ‘China”• Who will replace China?

Main Issues & ChallengesMain Issues & Challenges

Technology• Both an enabler and

inhibiter • The Internet and the

proliferation of e-applications

• Cost of new technology

Main Issues & ChallengesMain Issues & Challenges

Succession planning• According to industry surveys

91 % of current owners plan to retire within a decade yet more than 70 % have no plans in place

• Critical issue for owners as without a plan the potential value of the business is at risk

Main Issues & ChallengesMain Issues & Challenges

Recruitment of labour• Despite its capital intensive

nature, significant number of people work in printing

• Poor industry image is affecting recruitment efforts

• In WA and QLD competing with resources sector

Section ThreeSection Three

Key features of the print management models

Key features of the print management modelsKey features of the print management models

Commercial printers• Focus on print, some have

expanded into other areas• Dominated by SME’s • Direct relationship with

clients ensures quality, delivers greater responsiveness

Key features of the print management modelsKey features of the print management models

Commercial printers• No middle man – one

margin• Volume driven and limited

product and service offerings

• Most are single site operations

Key features of the print management modelsKey features of the print management models

Hybrid model• Recent development• Offered by print groups• Clients offered in-house or

outsource production options

• Cap on in-house production facilitates outsourcing

Key features of the print management modelsKey features of the print management models

Hybrid model• Offers direct relationship for

business critical products• Establishment of procurement

structure• Suitable for sophisticated

high volume corporate clients• Time to implement

Key features of the print management modelsKey features of the print management models

Independent Print Manager • Emerged in the past decade• Use of panel of suppliers to

source lowest price• Outsource model, single point

of contact reduces complexity• Sources lowest price on the

day

Key features of the print management modelsKey features of the print management models

Independent Print Manager • Margin-on-margin cost

model• Supply base is contracting

especially after the GFC• Product quality and

consistency issues

The “PPP”The “PPP”

Printing Industries Print Procurement Principles (PPP) Formation of clusters

incorporating government departments/agencies who have similar print communication needs

The print spend of the “clusters” should be similar

The “PPP”The “PPP”

Supplier panels created based on printed product category and regional printing requirements

The Print Managers have access to both printing supplier panels depending on the nature of the work.

The “PPP”The “PPP” Work destined exclusively for

regional markets is allocated to the regional print supplier panel

Print procurement be based on the principle of value for money where a balance of quality, service, cost and turnaround is considered and not only on the cheapest tender/quote.

The “PPP”The “PPP” In selecting printing companies,

Governments should specify minimum standards pertaining to the use of critical issues such as labour, sustainability, product & service quality and general capability

Direct and ongoing relationships between purchasing managers & government departments and printing companies

SummarySummary Contemporary printing

conditions remain challenging Printing businesses need to

manage numerous issues Print buyers have the luxury of

choosing from a range of print management models

The “PPP” offers policy guideline for government buyers of print

Hagop TchamkertenianNational Manager for Policy &

Government Affairs

Hagop TchamkertenianNational Manager for Policy &

Government Affairs

hagop@printnet.com.auMob: 0414 953 271Ph: 02 8789 7361