The printing industry in the meager profit era and the meager profit era in the printing industry
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The printing industry is a processing industry. The processing industry means that there is no product of its own, and it is even less likely to have a product in the brand sense. This determines that it is impossible to have high added value. Because high added value is given by brand or high-tech transformation. Product price levels are not the same as high value added. The price is related to the relationship between supply and demand. The printing industry had a good printing price a few years ago, but this does not mean that it has high added value, but because of the "restriction" of printing companies, the formation of supply and demand. For the printing industry, once the competition is fully developed, the price drop of the industry will be inevitable. Knowing this is helpful for us to deal with the arrival of the era of low profit, which helps us to give up the illusion and nostalgia of high prices. The so-called printing industry in the era of meager profit means that with the full development of the market economy, the seller's market has become the buyer's market, and the entire China and even the world market has entered the era of low profit. The printing industry in the era of meager profit is bound to face huge bargaining pressure. On the other hand, the competition in the printing industry itself has greatly weakened its bargaining power. The interaction between the two has led to the entire printing industry entering the era of low profit.
The Shanghai Pudong New Area Printing Association held a seminar on “China's Printing Development Strategy”. I gave a short speech at the meeting and talked about my experience in the printing industry for several years. After the editorial meeting of "Printing Magazine", I sincerely invited me to put in the text. I feel that I have not entered the printing industry for a long time. I also lack systematic quantitative analysis of the development of the printing industry. It is only my own qualitative judgment. The strong "self-subjective color" has no bottom to what "axiom" is included. However, the editorial sentiment is difficult, and the "axiom" must be more and more clarified, so I don't want to be rude, and write down the following words. I am looking forward to the criticism of my senior colleagues with gratitude.
First. Interpretation of the characteristics of the printing industry
The industry has often referred to the printing industry as “the sunrise industry”, which I feel is not accurate. I tend to call it "an old industry." The printing industry has a long history. With the advancement of human science and technology, the printing industry has also achieved industrialization and informationization. But this does not mean that the printing industry is a sunrise industry. Many traditional industries have also experienced industrialization and informationization. The modernization process. The so-called sunrise industry has a distinct era, which means that with the advancement of human economic life and science and technology, new industries such as biology, medicine, and electronic information have been born. Although printing does not belong to the category of “sunrise industry”, it is obviously not a “sunset industry”. As a long-lasting human needs, paper products (packaged products and books as cultural and information carriers) are unlikely to fade out of human life. Although the paperless trend of online and electronic publications is greatly enhanced, I have put more It is seen as an information carrier that can coexist, not simply a replacement relationship. Some people say that as long as human beings exist, there will be prints. So I said that the printing industry is an old industry.
The printing industry is a processing industry. There will be no objection to this. The processing industry means that there is no product of its own, and it is even less likely to have a brand-name product, which determines that it is impossible to have high added value, because high added value is given by brand or high-tech transformation. Product price levels are not the same as high value added. The price is related to the relationship between supply and demand. The printing industry had a good printing price a few years ago, but this does not mean that it has high added value, but because of the "restricted" creation of printing companies.
Formed by supply and demand. For example, the cosmetics industry, fierce competition, price competition, but internationally renowned brands still rely on its strong brand
The popularity supports the high price of its products, which is called high added value. For the printing industry, once the competition is fully developed, the decline in industry prices will be inevitable. Knowing this is helpful for us to deal with the arrival of the era of low profit, which helps us to give up the illusion and nostalgia of high prices.
The appeal of the processing industry is that its risk is relatively low. Because it does not have its own products, it purchases raw materials according to customer orders and arranges production, so large-scale product backlog is almost impossible. The overnight collapse and devastating blows are rare in the printing industry. Printing companies will not get rich overnight, nor will they be ruined by accidents. This is a feature of the printing industry as a processing industry. Knowing this will help us to have a good attitude when we are involved in this industry.
The printing industry is an industry with low barriers to entry under the market economy system. Just if you have a certain amount of money, you can buy printing equipment, recruit workers, and you can take over the business. There is no threshold for the initial scale, and one or two small machines can also operate. Since the printing industry is related to ideology, there is a certain limit in the entry of the printing industry in the long process of planning the transition of the economic system to the market economy. The high printing price of 60 yuan to 80 yuan one color order appeared in this situation, and this just misled a large amount of money into the printing industry. To this day, many regulations restricting the industry have basically disappeared, and the printing industry has restored its low threshold. As a result, the printing industry is now a fully competitive industry and has entered its own meager profit era.
The so-called printing industry in the era of micro-profits means that with the full development of the market economy, the seller's market has become the buyer's market, and the entire Chinese market and even the world market have entered the era of low profit. The printing industry in the era of meager profit is bound to face huge bargaining pressure. On the other hand, the full competition of the printing industry itself has greatly weakened its bargaining power. The interaction between the two led to the entire printing industry entering the era of low profit.
Second, from the online bidding to see the prosperity of the printing industry
In the past two years, many printing houses have had painful experiences of online bidding. The Shanghai People's Printing Eight Factory, where I am located, has accepted online auctions from GE, Tianjin Shike, and Shanghai Johnson & Johnson. The traditional bidding method is the quotation of several suppliers, and finally chooses according to the price/performance ratio. This offer is one-off. Online bidding is a direct flesh between competitors, prices from high to low, no bottom. The price reduction for each bid is 30%, and the product gross margin is only 10% at the end, which is actually a loss from the perspective of financial accounting. Faced with such a strong competition, even if you can earn a little depreciation or workers' wages, you have to do it. After each bid, I fell into deep thought. I have always wanted to understand what the results of the online bidding indicate. I think, one shows that the printing factory does not have brand value added, and at most only the brand ordering ability. The brand of Shanghai People's Printing Eight Factory will only play a role when it is given the bidding qualification or the same price to get the order. The buyer does not accept the price higher than others because you are the People's Printing Eight Factory. This is completely different from the same printing machine. The price of Heidelberg is higher than other brands. Second, the printing industry has entered the era of price-driven meager profit. In 2003, the number of imported offset printing machines in China was more than 1,000 (more than four colors). In the past 10 years, it has almost reached nearly 10,000 units. With the domestic printing presses, the quantity of our offset printing machines has been the same as that of developed countries in Europe and America, so the relationship between supply and demand occurs. The fundamental reversal.
From this, I think of the printing industry boom that has permeated in recent years, based on the fact that the proportion of the printing industry is much lower than that of developed countries in Europe and America. The ruthless results of online bidding have forced me to doubt this. Just like building a Disneyland in China, it is a subjective and high-speed return to subjectively imagine that every Chinese person will go there once. China has a large population, and it is only misleading if the total economic output is not per capita.
The rise in raw materials and the sharp fall in sales prices are unique features of the overheated economy with Chinese characteristics. The two-head extrusion has made the printing industry almost unprofitable. Our factory spent 4 million yuan in 2004 due to the increase in raw material prices, and the price fell.
Another loss of 4 million yuan, two total of 8 million yuan, with a gross margin of 20%, must increase the sales of 40 million to maintain the operating level of previous years. More than 40 million sales will increase financial expenses, production costs and management costs, and the gross profit margin will decline. Expanding the scale of sales will inevitably require expanding production capacity and increasing investment in fixed equipment, which in turn will further worsen the relationship between supply and demand. Under such circumstances, I don't know whether the incremental funds induced by the printing industry boom are invested in the printing industry. ! The truth is against the ears, but it is causing my colleagues to ponder. In my personal opinion, the total amount of offset printing has become saturated. For investors who are interested in investing money in the printing industry, my suggestion is two sentences: First, flexo printing is better than offset printing, and flexo printing will have a big development in the next few years; second, whether it is flexo or offset printing, equipment Do not purchase standard configurations, and try to introduce non-standard configurations.
Third, the response strategy of printing enterprises in the era of low profits
I am the vice chairman of the Shanghai Pudong New Area Printing Association and I am familiar with the status quo of Pudong printing companies. Pudong New Area has gathered many excellent printing companies in Shanghai. Shanghai's printing industry has one of the best sales in the world, and many of them have gone out of their own characteristics. Here are a few companies that can be instructed by the tactics of the printing companies in the meager profit era.
1. Differentiation
American Asian Paper Company produces milk roof boxes, and Shanghai Minhua Printing Factory produces transparent window envelopes for mailing telecom bills. It is a road to differentiated strategy. They choose
Take a target market in the market segment, avoid the mainstream packaging market, and achieved good results.
2. Technology leadership
Like the Pudong New Area Printing Factory, which has passed the technical research and printing of bank passbooks, Jielong Printing Factory has printed and printed the Shanghai Museum Painting and Calligraphy National Treasure Exhibition. Shanghai People's Printing Eight Factory successfully developed the “WP Waterborne Environmental Protection Process” and won the Sixth Ministries of the State Technical Quality Supervision Bureau and the State Economic Commission. High-tech product certificates, these are successful examples of technology leadership
. But for printing companies, technology leadership is often limited to a certain product, and it is difficult to rise to the winning strategy of the entire enterprise.
3. Business support
This is divided into two categories: one is the administrative relationship as the link, such as Shanghai Tobacco Industry Printing Factory, Shanghai Printing Bank is an administrative monopoly business relationship: Second, the use of assets as a link, such as Shanghai Rencai Printing Co. The joint venture with Moutai Co., Ltd. has steadily obtained the printing business of Moutai packaging. However, the above two types of business rely on strategy, can only meet but not demand, not universal.
4. Enter the international market and take the road of foreign trade
Many printing companies in Shenzhen are investing in Hong Kong. With the status of Hong Kong International Trade Center, they have taken on a large number of foreign trade orders. As the economic center of China, Shanghai has rarely received foreign trade orders. In the case of full competition in the market, entering the international market is one of the ways to resolve the contradiction between supply and demand. Shanghai People's Printing Eight Factory began to undertake foreign trade orders in 2001. After continuous efforts with foreign companies, including the establishment of quality management system certification, social responsibility system certification and other measures, the company actively pursued the direction required by foreign companies. In 2004, it has reached 60 million yuan in sales. To a certain extent, it has made up for the gap in domestic trade.
The Shanghai Printing Industry Association can take the lead and coordinate to make a difference in the way Shanghai printing companies go to the international market.
5. Design to drive business
Shanghai Chunhua Design Color Printing Co., Ltd. is an example in this regard. The company was founded by Zhang Peijun, a well-known Chinese designer, and Zhang Peihua, a younger brother. The company is designed to lead the printing business, which makes the company uniquely competitive. Once upon a time, Shanghai Bump Color Printing Factory and Shanghai People's Printing Eight Factory had a strong design team. The undertakings were like Chinese cigarettes, Maotai wine, Huangtai wine, etc. Most of them were driven by design. This excellent and effective tradition has been largely ruined by the emergence of a large number of professional advertising design companies and the management of the company's designers. The printing company and the professional design company form a strategic alliance, and a road to design and drive printing is a path worth exploring.
6. Homemade products
Like unbranded greeting cards, photo albums, and branded “Yao Ji” playing cards, it should be said that these are the best ways for printing companies to cope with the era of low profit. I often think that the market of portable paper bags in Europe and the United States is huge, and the domestic market will eventually form a professional market for portable paper bags. Can printing companies make plans in this regard?
7. Leading the total cost
Most printing companies are homogenized, focusing on books and magazines. The homogenization phenomenon is very serious, like the subsidiaries of Shanghai Packaging Group and Shanghai Printing Group. For companies that compete for homogenization, the necessary equipment size and cost control are the only viable options. This is a painful road, a painful road with no choice. Its biggest challenge for printing companies is how to win with management innovation.
Fourth, the challenge of managing innovation and meager profit era
Cost control is a system engineering, from production cost control to cost control of non-productive management, human resource cost control, raw material procurement and outsourcing processing cost control, etc. The most challenging of these is the cost control of the production process. This is reflected in two aspects:
First, printing companies have so far been basically an industry of experience management. Standardized production is an effective form of cost control, but printing companies cannot achieve standardized production. I have been joking that the printing factory is a "restaurant" in the industrial industry, and the quality of the products is all in the head chef (captain). Different chefs will taste differently. The same chef (captain) does the same dish, and today and tomorrow will be different, the reason is that all rely on experience, not the standard operation of data. My metaphor may be a bit exaggerated, but the truth probably won't be biased out. Improving the status of this empirical production, on the one hand, is subject to the high degree of dataization and standardization of printing equipment, and on the other hand, it has made unavoidable innovation requirements for our management. How to establish technical data for all products, and strive to be close to data and standardized operations. For printed products, there may be different orders every day, which makes this effort confusing. Its deep-seated problems have yet to be solved by technological innovation.
The understanding of paper performance, the relationship between paper and ink, glue, the effect of air humidity on printing, etc., requires a lot of data, long-term accumulation, summary.
Prepress and printing still have some basic theoretical guidance. The post-press technical summary is basically blank. For example, when we organize employee training, the post-press kit does not have a guide textbook at all, and it is all taught by the “master”. So far, the training of the captain of the printing press is like the traditional craftsmanship, and it is also the mode of “masters with apprentices”. To achieve standardization and dataization of printing production, the research and development of individual enterprises is obviously weak. It is recommended that industry associations take the lead in organizing, and each enterprise will contribute money and spend five or more years to establish a database. It may be possible. solution.
Second, a challenge comes from the “workshop” model of printing companies. Comrades in the paper industry often joked with me that the printing house is "stepping on the sewing machine." One machine is a printing factory, and ten machines are a large printing factory. Has this completed the “large machine production” from quantitative change to qualitative change? Is it not a simple superposition of a single machine, not a "potato in a sack", but becomes a system organic whole of 1+1>2? of course not! We now have an ISO9001 quality management system, but everyone is very clear that this system is very difficult in the implementation process, not only to establish a set of guiding macro management system, but also to establish a set of assessment to the machine, the team's micro The assessment system is undoubtedly an effort to work in this direction. If we can achieve quality management system + ERP management + machine evaluation + technical standard system, the production management of printing enterprises will appear an overall improvement. To achieve this goal, the road is long and it requires us to make extraordinary efforts.
The above is about the innovation of system management of printing production, and the innovation of mechanism is another level worth exploring. Consumer goods industries such as Danone, Johnson & Johnson and many beer companies are separate from sales and production, and production becomes a processing and cost center. I put forward the "internal market subjectivization" in the factory, and the essence is the independent accounting, which makes the workshop become a self-financing market entity, and forces the workshop to grasp the quality, grasp the technology, and grasp the cost. After three years of exploration, some achievements have been made, but there is still a long way to go before realizing the separation of sales and production operations.
V. The Dilemma and Outlet of State-owned Printing Enterprises
In the printing industry in Shanghai, state-owned enterprises still occupy a considerable proportion. The revitalization of state-owned printing enterprises has played a pivotal role in the enlargement and strength of Shanghai's printing industry. Where is the dilemma of state-owned enterprises? In the tide of market economy, state-owned enterprises have completely been the main market players. Their funds and business are all from the market, and they are self-financing, but state-owned enterprises are carrying heavy historical burdens to compete in the market. It’s a “dancing dancer”. As a state-owned enterprise operator, I often feel that I am participating in an unfair competition.
State-owned system
Carrying heavy historical burdens, but also making it impossible for enterprises to unload these heavy historical burdens, just like the curse on Sun Wukong’s head, the more and more tight, the breathless. Take our People's Printing and Eight Factory as an example. The main institutional burdens are:
First, the quality of assets is poor.
The original accounting system is not to mention bad debt preparation and inventory loss preparation. It has accumulated over several decades, and the bad debts have reached hundreds of millions of yuan. The annual profits are still paid according to the report data. . The consequence is that the assets are blurred and the quality is very poor.
Second, the financial burden is heavy and the cash flow is tight.
This is the inevitable result of the previous point. Business traffic is tight
Zhang, had to borrow money, and the annual financial expenses reached more than 8 million yuan for the bank to work. Raw material procurement due to long payment period, high price, affecting income, vicious circle.
Third, there is a lack of re-investment and renewal capabilities.
Due to the tight capital and the low quality of economic operations, the company is unable to update the equipment. Whether it is a connotative technology upgrade or an extension of the scale, it can only be sighed.
Fourth, people are overstaffed and labor costs are high.
The labor cost of private foreign-invested enterprises generally accounts for 6% to 8% of sales, while the People's Printing and Eighth Factory accounts for 17%. Even with the same sales, it is impossible to have the same profit.
State-owned enterprises have high labor costs. First, the wages of the “four golds” are significantly higher than those of private enterprises. Second, there are too many employees in state-owned enterprises, and it is difficult to “reduced staff and increase efficiency” due to institutional reasons. The per capita output value of the low value-added processing industry should not be less than 200,000. This is the bottom line for survival. There are more than 1,200 employees in the eight factories in 2001, and the per capita output value is always on the verge of survival.
Fifth, the above four points are all that “the tangible burden is more serious is the “invisible burden”. It is the inefficiency caused by people’s overstaffing. The employee concept caused by the employment system lags behind, and the rewards and punishments for all employees including the operators are rewarded. The mechanism is missing, etc. These injuries to the business of the company are deep and heavy.
Some people have accused the state-owned enterprise operators of taking the responsibility of state-owned enterprises into account. I have no intention to justify the state-owned enterprise operators, but it is helpful to understand that the essence of the matter will help the state-owned enterprises out of the predicament. In the face of the plight of state-owned enterprises, I once sighed with great enthusiasm and calmly and rationally, saying that "it is difficult to do a good job in state-owned enterprises, but we can make it better than today." It is by no means a panacea, only the mechanism of life is evergreen." Expressing a kind of The matter is in people, the willingness to do things, the series of people in the eight factories in the mechanism to control costs as the core of the exploration, in the business strategy to the international market, after more than four years of efforts to achieve some results, corporate cash flow increased, Bank loans have been compressed, and more than 65% of workers have increased their wages. They have also invested more than 2 million yuan to upgrade their equipment. However, there has not been a fundamental change in the institutional dilemma. In the face of pressure from the meager profit era, the future is worrisome.
Fortunately, "the mountains and rivers are full of doubts, and there is another village when the flowers are dark." With the deepening of the reform of state-owned enterprises, the Shanghai government’s policy of “putting small and letting go to the mountain”, the property rights reform and system transformation of state-owned printing enterprises including our factory are being actively promoted, and the future is bright.