Lessons learned: Am I paying too much for overs?
Instead of the regular Q&A format, I thought I'd post great lessons learned from two PBO members. Read on!

By Terri Ziskind, Senior Print Buyer, and Bonnie Lamb, Print & Mail Manager for Phillips International

"My print buyer associates and I buy millions of dollars a year in print for our company, ordering large quantities of direct mail at one time. We are always trying to find ways to reduce costs. Recently we took a look at how much money we were paying in overs. On every purchase order that we were sending to our printers, we stated that we would pay for up to 2% over. We made this a standard policy to be sure that we didn't run short. When we looked at this more closely, we learned three things:

  1. We found out that we rarely use the overs from our print projects anyway. Our direct mail pieces change so often, except for envelopes and a few other items, we don't use previously printed pieces.

  2. We realized that our marketing department, when providing us with specifications, was already padding the quantities to allow for overs. Then our printer was tacking on the 2% additional overs quantity. In some cases, not only was this unnecessary, it was wasteful.

  3. We realized that several of our printers were automatically adding on the cost for 2% over on our invoices, but we hardly ever received the overs material. We don't know if this was intentional or not - we suspect not - but if we are going to be charged for something, we should get it.

We resolved the problem in a couple of ways. We decided to continue padding our quantities on our end. But when the specifications now come from our marketers, we consider each project - both by the type of piece we are printing and the quantity that we are ordering -- and then decide the appropriate percentage of overs that we will accept from the printer. We have a sliding scale of .5 to 2% overs. Since we weren't experiencing any problems with running short, we felt that it was safe to cut back on what we would accept in overs from the printer. We also put our printers on notice that we discourage the automatic running of overs. If we receive an invoice with costs for overs, they'd better be able to deliver those pieces.

And, by the way, we estimate that we will save close to $50,000 this year by making these changes!"
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