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Manpower vs Horsepower

By Randy Rasch, President

Today's market presents enormous challenges for the business owner. Decisions of today mean the profits of tomorrow...or the lack thereof. The printer's bindery consumes more resources than any other department in any typical printing company. Space requirements per sales dollar are four times that of the pre-press and press departments. Throw a lot of people at a bindery problem and it can be solved without a doubt. Does this translate into a money pit where profits are eaten away so fast the rest of the company must suffer to subsidize the stepchild, the weak link in the money chain to the bottom line. Hire more bodies and all will be peaches and cream. Maybe!

Figures don't lie, so let's look at some hard cold facts:

  • Minimum wage: $5.15
  • FICA 8.35%: .43
  • 2 Weeks vacation: .20
  • Health Insurance: .20
  • Workman's Comp Insurance: .25
  • Other (Sick days, holidays, etc.): .15
  • Total cost per hour = $6.38

This means the actual cost of a new employee is 20% higher than their hourly pay. The lesson learned is to be very sure you need that added expense of a new employee before you take on that permanent added commitment. What do I do, it ain't getting done as things are now, so what choice do I have?

The company has multiple choices. The trick is to research and decide what is the best long term solution while not dissolving profits by making a poorly designed plan to fix the short term problems.

Automation should be considered. Today's technological advances in the bindery are truly amazing. Each production finishing machine requires bodies at the end of the line to tail, pack, and box finished products. Automated robotic stackers can do the work with much less human interaction. These machines require no vacation, health insurance, and other benefits and are never late to work and earn no overtime pay. The expense is minimal when compared to the costs associated with a new hire. Talk to your machine reps to discover what is new in bindery robotic technology.

If your problems of overload are seasonal, try temporary labor services. Many of the odd jobs can be filled with inexperienced help, freeing up those select few experts on the payroll to over see the temps and add to the bottom line at the end of the day. Although the hourly cost of the part-timers can be double, you don't have any obligation to anything other than the project at hand. When complete--see ya later temps. No fuss, no benefits, and no insurance costs.

I hate the over used term, "Think out side the box," but if you look at your company as a box of sorts, go outside for help. Your local bindery/ finishing service already has all the stuff you really don't want nor need on an every day basis. Call for a quote on the project and suddenly an unknown expense becomes a fixed expense and get this--mark it up. Bindery could become one of your best profit centers, and no longer the unwanted step child.

Next time you are faced with a jam up in bindery production, consider more horse power, not simply buy more man power.


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