1. Supplier Cost Drivers – Print Example
Typical cost breakdown shows that the supplier’s main cost driver is paper
Recommendations
Profit element, amalgamated into % mark up on the print element of the price
Profit 10%
Administration
20%
Head-office
Accounts
Invoicing
Admin
Transport
Agree on common national specifications
Reduce the format of prints to use less paper
Reduce the weight (from 80 grs to 75 grs for example)
Don’t use branded paper with watermarks
Don’t use colour paper
Buy the paper straight from a paper merchant
Combine print paper with paper for office printers
Printers’ operating costs
Various cost elements
20%
Plate production, Ink, Labour set up,
Labour printing, Labour folding, Labour finishing, Packing-box and label, Depreciation, Stock, Distribution
Paper
50%
Paper accounts for around 50% of the total cost.
By reviewing the specifications and negotiate wider deals on paper, the organisation could reduce their print costs
Reference: PCD85-A Released: 17/07/2015

2. Example Product Cost Drivers
Reference: PCD85-A Released: 17/07/2015