+ All Categories
Home > Documents > Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights...

Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights...

Date post: 18-Jul-2020
Category:
Upload: others
View: 2 times
Download: 0 times
Share this document with a friend
56
Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019
Transcript
Page 1: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

Key Industry Trends and Insights

Olga Dorokhina and Andy Paparozzi, SGIA

October 23, 2019

Page 2: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

Agenda

• SGIA Research: • What’s New

• 2019 Research Findings Highlights• Markets and Products

• Wage, Salary, and Sales Compensation• Financial Performance

• SGIA Economy Watch

• Final Thoughts

Page 3: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

New Approach: Constant Monitoring

Topics:

• Q1 – Markets and Products

• Q2 – Financial Performance

• Q3 – Wage, Salary, and Sales Compensation

• Q4 – Growth Strategies and Capital Investment

• SGIA Economy Watch (available quarterly)

Get Your Data Around the Clock

This Photo by Unknown Author is licensed under CC BY-

Page 4: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

New Approach: Depth

• Panel Development for longitudinal studies

• Benefits:

• Reliable data for trends development

• Easy access to the participants

• Stronger relations with the industry

• Interviews

• Benefits:

• Qualitative data

• Explains opinions, behaviors and experiences

Descriptive

Diagnostic

Predictive

Prescriptive

Source: Gartner Research

Page 5: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

New Approach: Coverage

5+ Industry Segments

Graphic and Sign

Apparel Decorators

Commercial Printers

Functional Printers

Package Printers/Conver

ters

Suppliers and Manufacturers

Participation Panel

membership

Interviews

Q1 427 219 14

Q2 443 257 17

Q3 381 195 15

Page 6: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

Deliverables

• Quarterly infographics

• Full benchmarking reports by industry segment

• Quarterly SGIA Economy Watch

• Special reports for panel members only (“Best in business intelligence” analysis and “how-to’s”) - upcoming

Connecting the data points and taking them to the new level - we deliver a business tool.

Page 7: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

Markets and Products Industry SurveyFirst Quarter 2019

A Focus on Convergence

Page 8: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

Q1, Markets and Products

Average Number of Markets Served and Products Provided

8

7

5

7

4

9

5

Products

Markets

Graphic and Sign

Apparel Decorators

Commercial Printers

Functional Printers

Page 9: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

Q1, Markets and Products

37.5%31.9%

63.3%

55.5%

33.4%

Graphic and Sign Apparel Decorators Commercial Printers Functional Printers PackagePrinters/Converters

Serve at least TWO Segments: Graphic and Sign - the most popular segment:

about every second company (48.0%) serves it

in addition to their primary segment

Page 10: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

Q1, Secondary Segments

Primary Industry

Segment

Secondary Segments

(Segments Served in Addition to the Primary Segment) and Their Revenue

Contribution

Average

Revenue

Contribution

(Secondary

Segments)

Graphic and

Sign

Apparel

Decorators

Commercial

Printers

Functional

Printers

Package

Printers/

Converters

Graphic and Sign

$

13.2%

19.3%

26.4%

26.9%

19.0%

20.5%

8.3%

17.0% 15.0%

Apparel

Decorators

$

28.7%

16.0%

7.4%

15.5%

3.2%

18.5%

1.1%

30.0% 6.7%

Commercial

Printers

$

65.4%

22.3%

14.8%

19.2%

21.0%

19.7%

19.8%

14.2% 24.4%

Functional Printers

$

50.0%

18.9%

25.0%

14.8%

33.3%

9.0%

16.7%

9.3% 17.7%

Page 11: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

Graphic and Sign Products

Popular Products

• Window Graphics (ALL)

• Banners/Soft Signage/Flags (ALL)

• Label/Decal Products (ALL)

• Posters/Presentation Graphics (GFX, COMM)

• Wall/Architectural Graphics (GFX, COMM)

Desired Products

• Digital Displays (GFX, COMM, APP)

• Wall/Architectural/Building Graphics (GFX, COMM,)

• Retail Graphics/”Point of Purchase” Displays (GFX, COMM)

• Back-Lit Signs (ALL)

• Dimensional Signage (GFX, COMM)

• Vehicle Wraps/Vehicle Graphics (COMM)

Page 12: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

Markets: Where Their Interests Intersect

• Athletic (teams, college, professional)• Architecture/construction• Business-to-consumer• Corporate branding• Educational institutions• Food services• Nonprofits, associations, organizations• Retail

Page 13: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

Business Indicators: Current vs. Expected

-40%

-20%

0%

20%

40%

60%

80%

100%

Sales Production Employment Prices Profitability

Graphic and Sign Producers Apparel Decorators Commercial Printers Functional Printers Suppliers and Manufacturers

Page 14: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

Barriers to Profitability

Industry Segment Rising Wages

Graphic and Sign Producers 53.2%

Apparel Decorators 44.2%

Commercial Printers 43.5%

Functional Printers 66.7%

Suppliers and Manufacturers 30.2%

Page 15: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

Wage, Salary, and Sales Compensation August 2019

Page 16: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

U.S. Regional Distribution

21.5%

15.0%

14.4%

11.3%

10.0%

8.9%

7.1%

5.8%

5.2%

0.8%

East North Central (OH, IN, IL MI, WI)

South Atlantic (DE, MD, DC, VA, WV, NC, SC, GA, FL)

Pacific (WA, OR, CA, AK, HI)

West North Central (MN, IA, MO, ND, SD, NE, KS)

Middle Atlantic (NY, NJ, PA)

West South Central (AR, LA, OK, TX)

Mountain (MT, ID, WY, CO, NM, AZ, UT, NV)

New England (ME, NH, VT, MA, RI, CT)

East South Central (KY, TN, AL, MS)

U.S. Territories (AS, FM, GU, MH, MP, PR, PW, VI)

Page 17: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

Community Affiliation

36.5%

28.9%

13.7%

13.5%

4.4%2.9%

Graphics and sign producer

Commercial printer

Apparel decorator

Supplier/Manufacturer

Functional/industrial printer

Packager/converter

Page 18: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

Total Direct Payroll as Percentage of Gross Sales

7.9%

15.4%

35.7%

19.2%

10.9%

5.3%

2.3%

1.5%

0.4%

1.5%

0-10%

11-20%

21-30%

31-40%

41-50%

51-60%

61-70%

71-80%

81-90%

91-100%

19.2% - 31%-40%

35.7% - 21%-30%

23.3% - 20% or less

Page 19: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

Total Direct Payroll as Percentage of Gross Sales by Region

Region Median

West North Central (MN, IA, MO, ND, SD, NE, KS) 29.5%

Middle Atlantic (NY, NJ, PA) 29.2%

East North Central (OH, IN, IL MI, WI) 28.3%

Mountain (MT, ID, WY, CO, NM, AZ, UT, NV) 28.2%

Pacific (WA, OR, CA, AK, HI) 27.8%

South Atlantic (DE, MD, DC, VA, WV, NC, SC, GA, FL) 27.6%

New England (ME, NH, VT, MA, RI, CT) 25.5%

West South Central (AR, LA, OK, TX) 25.5%

East South Central (KY, TN, AL, MS) 23.7%

Page 20: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

Total Direct Payroll as Percentage of Gross Sales By Industry Segment

Industry Segment Median

Graphic and sign producer 27.3%

Apparel decorator 27.5%

Commercial printer 27.4%

Functional/Industrial printer 25.5%

Page 21: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

Benefits Provided to Full-Time Employees

89.3%87.7%

73.9%66.3%

61.7%61.3%60.5%

47.9%40.6%

39.1%37.2%

33.0%31.4%

28.0%25.3%

21.8%2.3%

Vacation/personal leave, paid

Workers' compensation insurance

Sick leave, paid

Bereavement leave

Maternity leave

Disability insurance, long term

Sick leave, unpaid

Flexible spending account (FSA)

Daycare/daycare assistance

Page 22: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

Wage, Salary, and Sales Compensation Report

Top Benefits:

Range of Coverage

By Region By Industry Segment

Vacation/Personal Leave, paid 70.6% - 100% 76.3% - 100%

Paid Holidays 76.5% - 100% 71.1% - 93.8%

Workers’ Compensation

Insurance

60.9% - 81.8% 60.5% - 92.3%

Health Care Insurance 41.2% - 83.3% 23.7% - 93.8%

Retirement Plan

(pension, 401K)

23.5% - 83.3% 23.7% - 87.5%

Sick Leave, paid 45.5% - 66.7% 25.0% - 68.8%

Page 23: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

Wage, Salary, and Sales Compensation Report

In-house sales

72.3%

Salary +

bonus/commission

Salary only Bonus/Commission/

Other

Sales staff solely

dedicated to sales

75.0% 10.0% 25.0%

Sales staff NOT

solely dedicated to

sales

42.9% 51.9% 5.2%

• Health Insurance Premiums

• 21.8% - more than 80%

• Median – 61.4%

• 75.8% of companies match employee contribution to 401K/pension plan

• Median 3.0%

Page 24: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

Compensation Method: Independent Sales

53.3%

26.7%

20.0%

Commission only

Commission plus bonus

Salary plus commission

Four out of five respondents (80.0%) - commission only or commission plus bonus

Page 25: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

When Commissions are Awarded?

72.1%

13.2%

1.5% 1.5%

11.8%

When the job is billed When the job is sold When the job is inproduction

When the job is paidfor

Other

Page 26: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

Basis for…

• Commissions

83.5%

1.7%

13.0%

1.7%

Gross sales

Gross profit

Value added

Other

• Bonuses

32.7%

32.7%

1.9%

13.5%

19.2%

Gross sales

Gross profits

Percentage ofsalary

Set amount

No set policy,occasional bonus

Page 27: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

Lowest Paid Jobs

JOB TITLE AVERAGE MEDIAN

MANUAL TEXTILE PRESS OPERATOR $30,925 $32,000

PACKING/KITTING/SHIPPING $33,355 $33,000

ANALOG POST-PRESS/TEAR-DOWN $36,869 $34,500

ANALOG PRE-PRESS/MAKE-READY $37,403 $35,830

POST-PRINT FINISHING/FABRICATION $37,670 $36,000

INVENTORY/MATERIALS CLERK $36,685 $36,000

DIGITAL PRESS OPERATOR $39,715 $40,000

Page 28: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

Highest Paid Jobs

JOB TITLE AVERAGE MEDIAN

IT MANAGER $76,571 $75,000

GENERAL MANAGER $70,043 $65,000

MARKETING MANAGER $67,665 $65,000

PRODUCTION MANAGER/PLANT FOREMAN $67,285 $65,000

SAFETY/ENVIRONMENTAL/COMPLIANCE MANAGER $66,877 $65,000

ELECTRONIC PRE-PRESS MANAGER $66,560 $65,780

ENGINEERING PERSONNEL/R&D $65,650 $65,000

PRESSROOM SUPERVISOR $64,854 $64,700

QUALITY CONTROL MANAGER $63,798 $62,500

CUSTOMER SERVICE MANAGER $61,277 $52,812

ART DIRECTOR $60,753 $55,500

Page 29: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

Sales and Profits: Current vs. Expected

0.0%

25.0%

50.0%

75.0%

100.0%

Current Expected

Sales

Graphic and SignApparel DecoratorsCommercial PrintersFunctional PrintersSuppliers and manufacturers

Current Expected

Profits

Page 30: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

Industry and National Economy Confidence

56.1%

36.2%

76.7%

51.7%57.1%

30.8%

47.8%40.5%

62.3%

38.5%

Industry confidence National economy confidence

Graphic & Sign Apparel Decorators Functional Printing

Commercial Printing Manufacturers/Suppliers

Page 31: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

Financial Benchmarking Industry Survey

Second Quarter 2019

A Focus on Profitability

Page 32: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

= Percent reporting sales increased in 2018 = Percent EXPECTING sales to increase in 2019

Sales Trending Up

Page 33: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

All Companies Surveyed

Why Sales Are Expected to IncreaseReason Citing

Marketing more effectively/more resources devoted to marketing 57.1%

Favorable economy/business climate 48.5%

New products/services 44.9%

Selling more effectively/more resources devoted to sales 42.9%

Strength of major product/service markets 40.8%

Price increases 32.7%

Additional sales personnel 29.6%

Page 34: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

By Primary Printing Segment:

Why Sales Are Expected to Increase

Graphic and Sign Producers Citing Commercial Printers Citing Apparel Decorators Citing

Marketing more effectively 64.9% Marketing more effectively 52.0% New products/services 45.9%

Favorable economy 51.4% Favorable economy 52.0% Marketing more effectively 40.5%

New products/services 44.6% Selling more effectively 42.0% Selling more effectively 40.5%

Strength of major product/

service markets43.2% New products/services 40.0%

Strength of major product/

service markets40.5%

Selling more effectively 36.5%Strength of major product/

service markets36.0% Favorable economy 37.8%

Page 35: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

Sales Up … Profitability Not So Much= Percent reporting SALES increased in 2018 = Percent reporting PROFITABILITY* increased in 2018

Page 36: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

Obstacle Citing Obstacle Citing

Rising wages 49.1% Shortage of skilled sales personnel 20.8%

Lack of sales, difficulty growing sales 43.4% Older, slower, less efficient equipment 19.8%

Rising cost of healthcare benefits 42.9% Increased tariffs 13.2%

Rising cost of essential materials/supplies 42.0%Limited growth of our major

products/services9.0%

Shortage of skilled production personnel 41.5%Excess capacity in markets limiting

pricing power8.5%

Workflow inefficiencies 33.5%Client turnover too high/retention rate

too low7.1%

Clients unaware of how much more we

can do for them27.8%

General economic weakness in

markets/areas we serve6.6%

Need to find/develop new markets 25.5% Other 6.6%

Biggest Obstacles to Increasing Profitability

Page 37: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

Graphic and Sign Producers Citing Commercial Printers Citing Apparel Decorators

Rising wages 53.6%Lack of sales, difficulty growing

sales56.5%

Shortage of skilled

production personnel57.9%

Rising cost of essential

materials/supplies48.8%

Rising cost of healthcare

benefits47.8% Rising wages 44.7%

Rising cost of healthcare benefits 44.0% Rising wages 43.5%Lack of sales, difficulty

growing sales39.5%

Lack of sales, difficulty growing

sales38.1%

Rising cost of essential

materials/supplies34.8%

Rising cost of essential

materials/supplies36.8%

Shortage of skilled production

personnel38.1%

Shortage of skilled production

personnel30.4%

Rising cost of healthcare

benefits34.2%

Workflow inefficiencies 36.9% Workflow inefficiencies 27.5% Workflow inefficiencies 28.9%

Showing clients how much more

we can do for them32.1%

Showing clients how much more

we can do for them26.1%

Showing clients how much

more we can do for them28.9%

Biggest Obstacles by Segment

Page 38: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

Tactic

Human ResourcesAttracting and retaining more skilled, productive (or trainable) employees. Offering higher wages, more

attractive benefits. Greater investment in training. Establishing/expanding mentorship programs. New

recruitment methods. Becoming a "destination" employer.

Efficiency"Working smarter." Minimizing steps and touches, companywide not just in operations. Lean manufacturing,

continuous improvement, etc.

Capital InvestmentInvesting in new or upgrading current equipment/technology. Increasing productivity, speed and automation.

Expanding production capabilities to capture new markets, offer new products, and create WOW power.

CustomerPaying more attention to the customer, particularly to what the customer really values. More contact with

customers. Faster, more complete responses to customer questions and requests. Eliminating habitually

unprofitable clients to focus on recruiting, retaining and developing profitable ones.

Overcoming the ObstaclesHow are you addressing the obstacles? Nearly 10.0% responded, “We aren’t,” “We aren’t

sure how to” or “We are not at this time. We’re too busy!”

Page 39: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

Overcoming the Obstacles (cont.)

Tactic

ManagementPaying closer attention to and developing more effective KPIs: operational, financial, and overall. Closer attention to

strategic planning, financial analysis — particularly cost and debt analysis— and new business development.

Encouraging innovation/finding new, more efficient ways to work.

SalesAdding sales personnel. Better management of sale process. More careful analysis of the cost of sales. Focus on

selling value rather than commodities, consultative sales rather than transactional sales, and selling to marketing

executives, creative directors and others who set media strategies, rather than print buyers and purchasing agents.

MarketingBuilding/refreshing our brand. More resources devoted to marketing, including social media marketing, to better show

clients and prospects who we are and how we can help them prosper.

DiversificationAdding new products, services, end markets.

OtherRaising prices, working with supplier partners to reduce costs of essential materials, M&A.

Page 40: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

In Their Own Words

Increasing Profitability

▪ “We have fired unprofitable customers. We are also working on a training program to find unskilled labor and turn it into skilled labor.”

▪ “Trying to grow sales by putting significant resources into a comprehensive

marketing program so that we can go with a smaller sales force that has a

much high close rate rather than the traditional large, inefficient sales

force.”

▪ “Much different marketing and sales effort: Focus on defining what VALUE

means to the customer.”

▪ “We are increasing our wages to attract a better and more productive

workforce, as well as revamping our benefit package to hopefully make our

company a destination work company, rather than just a job.”

Page 41: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

▪ “We’re paying more for high-quality people and weeding out lower-

productivity workers. You can't afford low-output personnel at today's pay

rates.”

▪ “Developing and launching a new website. Hosting lunch & learn events.

Building out our custom showroom and demo center. Implementing improved

in-house training practices. Sending select personnel to paid off-site training

and educational programs. Introducing a new incentive bonus program

based on productivity/profitability benchmarks.”

▪ “We’re always re-working processes to find blind spots and learning from

mistakes.”

▪ “Through KPI's, company initiatives and focus. Bottom of customers by CM

fired. Looking for new employees to replace bottom 10%.”

In Their Own Words

Increasing Profitability (cont.)

Page 42: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

▪ “Due diligence to ensure proper control measures are in place.

Establishing mentoring programs to attract new recruits. Constantly

reviewing innovative technologies.”

▪ “Consolidating facilities. Ensuring minimum markups on low value-

added jobs. Getting rid of the lower priority work/customers.”

▪ “Continuous improvement initiatives and cost of sales analysis.”

▪ “Managing labor cost aggressively — both direct labor and indirect labor —

keeping head counts right and flexible staffing.”

▪ “Expanding our inside sales team. Hired a promotional products champion

to generate new revenue stream for the company. Continuing to invest in

lead generation for our e-commerce platform.”

In Their Own Words

Increasing Profitability (cont.)

Page 43: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

In Their Own Words

Prudent Capital Investment and KPIs“We were running three shifts on two offset presses. We didn’t want a

third press. But the new generation of offset presses is so much better:

10-minute makereadies, much higher quality, much better color

consistency — just everything about them. We were running lots of

overtime on weekends, with three shifts on two presses. Now we have two shifts on two presses and have minimized overtime.

“And the beauty of the work is unbelievable: UV coating, reticulation and

all the other effects. You show that around and people take note. It’s

not just standard print — it’s got a huge WOW factor. That’s where

our growth is coming from.”

Page 44: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

▪ Track estimated cost vs. actual cost, job-by-job and customer-by-

customer. Know immediately when actual cost significantly

exceeds estimated cost — “Not two weeks later when no one

can remember what happened.” Share actual vs. estimated cost comparisons daily with management.

▪ Hyperlink job numbers to:

o MIS so management “can see not only the job instructions

but everyone who worked on it.”

o Financials, where actual vs. estimated costs can be

related to EBITDA: “We watch EBITDA very closely. I

programmed EBITDA right into our income statement.”

In Their Own Words

Prudent Capital Investment and KPIs (cont.)

Page 45: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

▪ Vital-few metrics report provided to key staff every Monday morning.

▪ Provides “a view from 20,000 feet” of what’s happening.

▪ Metrics include:

▪ Weekly values are presented, along with multiple-week moving

averages to identify trends.

o Number of estimates

o Sales

o Work-in-progress

o Payable balances

o Receivable balances

o Cash-on-hand

In Their Own Words

Prudent Capital Investment and KPIs (cont.)

Page 46: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

Identifying the Consistently Profitable▪ They are NOT companies of particular size. They

do not operate a particular mix of technology or

offer a particular set of products and services.

Some have diversified beyond their core and some

haven’t. Some are participating in printing industry convergence and some aren’t.

▪ They ARE companies able to consistently capture

profitable work — work that fits — and shepherd

growth to the bottom line.

▪ They ARE companies that are making investments

that may depress in the short-term but are likely to

boost them over the long term.

“Our profitability was down last

year because we were dealing

with tariffs, but also because

we were transitioning into

new product offerings and

implementing lean initiatives

that will address many

shortcomings.”

SGIA Industry Benchmarking Survey

participant

Page 47: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

The Metrics1. Gross SalesSales from all sources, including brokered sales.

8. Selling ExpensesTotal cost (including payroll taxes) of compensating sales personnel, including sales

management. Includes advertising, travel/entertainment, vehicle and other sales-related

expenses.

2. Outside Materials and ServicesCost of all materials and services purchased from other companies to produce jobs.

9. Administrative ExpensesTotal cost (including payroll taxes) of compensating executive, office and administrative

personnel. Includes accounting, legal, collection, insurance, office supplies and other costs of

running the overall business.

3. Value AddedGross sales (1) – Outside Materials and Services (2)

10. Income Before Interest and Taxes (EBIT)Gross Profit – Selling Expenses – Administrative Expenses

4. Total PayrollEverything associated with paying employees, including payroll taxes. Includes

all working owners at fair compensation — i.e., what it would take to replace them.

11. Income Before Income TaxesEBIT – interest expenses + non-operating income, if any.

5. Factory/Production PayrollTotal cost of compensating (including payroll taxes) employees who are directly (press/equipment

operators, production supervisors, etc.) or indirectly (estimating, job planning, packing, shipping, etc.)

associated with production.

12. EmployeesAll full-time personnel plus the full-time equivalent of all part-time employees.

6. Factory/Production OverheadEquipment rental/leases, utilities, real estate taxes, rent, depreciation, repairs and maintenance, etc.

13. Sales PersonnelAll full-time outside salespeople, including selling owners.

7. Gross ProfitGross Sales (1) – Outside Materials and Services (2) – Factory/Production Payroll

(5) –Factory/Production Overhead (6)

14. Days of Sales Outstanding for a Month(Accounts receivable balance on the last day of the month/total credit sales for the

month) x number of days in the month.

Page 48: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

Among the Questions

▪ What are you doing better today than you were six months ago?

▪ What will you be doing better in six months than you are today?

▪ Why do you miss opportunities?

▪ What are you doing to create even greater value for your clients?

Page 49: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

The EconomyPercent change in private capital investment (equipment, software and structures), after-tax corporate profits and

GDP. All change is during the six months ending on the date indicated, over same period of previous year.

Page 50: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

International Economic Brinksmanship

▪ In January 2018, America targets solar panels, washing machines, steel and

aluminum.

▪ China targets our sorghum, aluminum waste, pork, fruits and nuts; the

European Union our cranberries, bourbon, Harley-Davidson motorcycles and

jeans; and Canada our steel, aluminum, agricultural products and food products.

▪ Over the next 18 months, goods from luggage to yachts are added to the hit list.

▪ Tariff hikes are announced. Some are enforced and some delayed. Exemptions

are granted. Some are honored, some rescinded and some replaced by import

quotas.

▪ Who knew what was next?

Page 51: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

Further Slowing LikelyPercent change in GDP over previous year. Projections for 2019-20 are consensusof economists surveyed by the Federal Reserve Bank of Philadelphia.

• Economy’s growth expected to slow to 2.2%

this year and 1.8% next year.

• Matters because growth of 1.8% reduces

GDP by $210.0 billion from what it would

have been had growth continued at 3.0%.

• Last year, textile and apparel manufacturers

had sales of $69.6 billion, beverage

manufacturers sales of $104.9 billion and

TV and radio broadcasters sales of $169.1

billion.

• The slowdown is the equivalent of losing a

major industry.

Page 52: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

But Recession Isn’t LikelyAt least not over the next 15 months.

▪ Economic expansions do not die of old age — i.e., we are never due for a recession. They die of:

▪ Excesses, such as the real estate bubble prior to the Great Recession of 2008 - 2009 or the dot-

com bubble prior to the recession of 2001.

▪ Policy errors, such as excessively tight monetary policy, poorly designed, timed and executed tax

increases and innovation-stifling regulation

▪ Exogenous shocks, such as the OPEC oil embargos of the 1970s.

▪ There is no evidence of excess severe enough to cause recession. The Fed has stopped

tightening credit. Economic policy isn’t Washington’s current priority. And the increasingly diverse,

adaptable American economy is not as susceptible to exogenous shocks as it once was.

Page 53: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

Housing Starts Rising AgainThousands of units, six month moving average.

▪ One of the most reliable leading

indicators of recession.

▪ Have declined during the 12 months

prior to every recession since 1960.

▪ No economic indicator is perfect. And no

two recessions are identical.

▪ But the recent rebound in starts is

encouraging. With interest rates falling,

continued gains are likely.

Page 54: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

Hoping for the BestHopefully:

▪ Phase One agreement reached between America and China October 11 leads

to a more comprehensive Phase Two agreement. No guarantee it will.

▪ United States-Mexico-Canada Agreement is ratified by congress.

▪ Brinksmanship ends

▪ Global economy heals rapidly.

▪ But with brinksmanship, one never knows. It’s a slippery slope that leads to a

trap door.

▪ Slide through the door and the outcome is something, such as global

recession, no one intended and from which no one benefits.

Page 55: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

Best in Business IntelligenceActions printing companies can take right now to build and maintain superior margins.

Increasing Client Retention

▪ Completely Satisfied? Or Just Satisfied? It makes

a big difference in client retention.

▪ What Are We Doing that Annoys You? Uncovering

and correcting the minor annoyances that reduce

customer retention.

Attracting New Clients

• Defining Our Competitive Advantage. Drop the

generalities and get specific.

• Creating a Superior Customer Experience. It’s

about a lot more than customer service.

Attracting/Retaining Quality Employees

▪ Building Our Employer Brand. Building a workforce

that will get us where we want to go.

Sharpening Execution

▪ Managing by Objectives and Key Results (OKRs).

Achieving our most important objectives.

Picking Our Shots

▪ Opportunity Evaluation Matrix. Deciding what’s

really an opportunity given my company’s specific

resources, capabilities and goal.

“We’re looking outside our company for answers.” SGIA Industry Benchmarking Survey participant

Page 56: Key Industry Trends and Insights - Map Your Show · 2019-10-22 · Key Industry Trends and Insights Olga Dorokhina and Andy Paparozzi, SGIA October 23, 2019

QUESTIONS?

Research & Analytics [email protected]


Recommended