Welcome to the Twist Print family!
We want to start by saying thank you for trusting us!
Twist Print is the first Operating System for the graphics industry and is built between all companies and people who belong to the network. So we invite you to collaborate to find together, best practices and new possibilities of automation.
If you're reading this it's because you probably liked Twist and think it can boost your business. We are convinced that the best attribute of Twist is its simplicity, but we also know that it is not easy to keep things simple.
In order to be aligned and make sure we conduct this change with maximum diligence, we ask you to please study each of these 5 points.
Part 1: General Considerations:
Have you heard about the Change Curve? Implementing a new technology is a change process that is sometimes very costly and forces you to rethink the internal processes of the company.
We know that the road is not easy, but we are convinced that if we do it together we will reach the best outcome.
It’s important at this point to know that emotions during this process are a roller coaster. From the initial optimism you are likely to move to a slight rejection, total rejection, exploration phase and final satisfaction.
We also invite you never to evaluate an unknown technology taking as reference what you know, because it is very probable that the requirement you have in mind is covered but in a radically different way to what you have preconceived.
It is very common during the rejection phase to hear phrases like:
"This doesn't work for me, because I usually register the data A, B and C in order. However, in this system only the data C appears on the screen.”
If the C data is a constant in 99% of the works, and in order to make the processes simpler, many times fields are not put in the main views (which can be consulted when required), thus avoiding filling the screen with numbers that make a bad user experience, especially for operators and administrative staff.
"We used to assign customers to an executive. Twist does not allow it, this does not work for us, we must assign customers.”
In Twist the clients assign themselves, each executive can only see the sales made by themselves. The same desired effect is achieved without the intervention of a person, avoiding doing a mechanical task and low value.
In each implementation we learn something and over time we have created "profiles" or "stereotypes" of customers. If you feel identified by this experience, maybe you are one of them!
Knowing these profiles allows us, both parties, to take the necessary care to achieve successful implementation.
Part 2: Making things simple
We are convinced that making things simple adds value to business, putting the central focus on the customer rather than on the company itself.
If we all prefer simple things, why are collection systems usually so complex? This is an impossible question to solve, but we have some ideas.
Each time a new person arrives at the organization it occurs to them to add a new field in the quotation, procedure or rule of collection that generates more complexity in the systems and makes them more focused on the needs of the managers or headquarters and less on that of the clients.
Sometimes the simple solution that fixes the problem at its root is not evident and it is easier to fill ourselves with rules and procedures than to stop and analyze the hidden simplicity.
Another important source of complexity, and loss of focus by the client, is corporate democracy.
In order to meet the demands of all parts of the company such as operations, business, finance, products or systems are generated that may meet the needs of each area, but do not necessarily meet the needs of customers.
Imagine an automobile company, the commercial management is working on the design of a new luxury sports car that is going to be sold at an average price of US$30,000 but the operations management determines that it is very complex to manufacture this product and takes away its main attribute (the convertible roof), then the finance management indicates that given a fall in the annual budget it is required to increase the value of the product to $40,000.
Finally we have a $40,000 product without a convertible roof, which does not meet the needs of the luxury market. It seems to meet the needs of the corporation but definitely not those of the customers.
For this reason, we present the American acronym KISS: Keep it Simple, Stupid. Although not very politically correct, it clearly indicates that the value is in keeping things simple and logical without sacrificing quality.
Part 3: Cost structure
The Twist costing model is extremely simple and here we present it to you:
While you can set your costs at your discretion, in order to get the most out of Twist this technology is designed to be operated in a specific way and yes, simple!
What is the price of a job?
Cost of paper
Cost of plates
Cost of printing (ink + maintenance + energy)*.
Service cost (laminate, stamp, uv, double, hot melt)
Finished cost (provision per unit)
Machine hour cost (opportunity cost)
Total cost (1+2+3+4+5+6)
Margin and discounts
* Printing cost is the "click" cost of passing a print through a printing body (ink, chemical, maintenance, energy), does not include depreciation or the operator (these items must go in the cost machine hour).
Why occupy this model?
Well, once again, it is simple and easy to control and allows pricing to control the level of filling of the plant with what we call "The philosophy of the 3 levers
Lever 1: raw materials and services.
Lever 2: cost of machine hour (opportunity cost).
Lever 3: margin (on raw materials and hourly cost of the company).
When we negotiate the value of a job, we must resort to one of the 3 levers.
Lever 1: make an effort to negotiate raw materials.
Lever 2: Although the cost of the machine hour is the cost of occupying a fraction of the plant for a given number of hours, in a low-demand scenario, it is possible to partially charge the cost of the machine hour.
Lever 3: how much margin I want to earn according to the risk/ complexity of the job.
To support us in making business decisions, we have two indicators that are very important: Gross Margin (% profit in relation to raw material) and Total Margin (% profit including machine hour).
Let's review the concept of "opportunity cost".
When we take jobs at a certain selling price, we occupy our plant and implicitly reject jobs (ideally of lesser value).
Imagine that you have two quotes and you have to choose which one to take:
#Project A, Selling price : $100, Direct cost: $10 (90% gross margin)
#Project B, Selling price : $100, Direct cost $80 (20% gross margin)
"A" looks more attractive, right? But how much of my infrastructure do I sacrifice/ occupy to take that order.
Suppose project "A" occupies 9 machine hours, vs. "B" which only occupies 1 hour.
Then the first one leaves $10 for each machine hour vs. the second one that leaves $20 for each hour. Project B that only has a gross margin of 20% is the most attractive!
Let's remember that a month only has 30 days with 24 hours each day (720 hours to produce maximum). You can have gross margins of 90% but if in those 720 hours you don't make enough money there is no way to make the company profitable.
With the model of the 3 levers, the hours are valued and allows us to make sure to optimize the level of filling of the plant, having workload at the highest price available in the market.
Part 4: How to Calculate Machine Hour Cost
The real estate expenses, financial, salaries and including the press station and capital cost of the machinery, must be charged to the hourly cost of the machine.
What is the capital cost? We recommend doing the following exercise based on last year's Income Statement or projection for this year.
Instead of using a Cost of Capital we suggest to do the calculations to have a X% of profitability with respect to the sale. After this exercise, analyze if this X% is a reasonable profit for the percentage of capital invested in the business.
(1) Own capital: $1,300,000.
(2) Expected year sales: $4,500,000.
(3) Expected fixed costs: $2,500,000 (Salaries, rent, financial expenses).
(4) Expected variable costs: $1,000,000 (raw materials, services, terminations).
(5) Expected result: $500,000.
(6) Return on capital: $500,000/ $1,300,000 = 0.38%.
(7) Average company margin (4)/(2)$1,000,000/ $4,500,000 = 22%.
Suppose we have 3 machines "M1", "M2" and "M3" the first works 400 hours a month, the second and third only 200 hours. Of the total hours, let's assume that only 60% of them will be sold (60% efficiency).
On the other hand, we know that the M1 receives 50% of the load of the plant, the M2 and M3 only 25% respectively.
From the Income Statement we have that all fixed costs (3)* for the year were $2,500,000.
So this is what we have:
M1: 400*0.6 = 240 hours * 12 (months) = 2.880, Cost: $2.500.000 *0.5 = $1.250.000. Cost/ hour = $1.250.000/2880 = $434/ hour.
M2, M3: 200*0.6 = 120 hours * 12 (months) = 1.440, Cost $2.500.000*0.25 = 625.000. Cost/ hour = $625.000/1.440 =434 $/ hour.
* The total fixed costs for model effects are: administration salaries, finance, sales, pre-press, press and cut. In addition to general expenses. Labor related to terminations and services should not be included.
Part 5: Why is productivity so important?
Finance managers are concerned about liquidity and security in payments, often at the expense of sales growth. Commercial managers are concerned about increasing sales, often at the expense of the contribution margin. Operation managers are usually worried about lowering costs, often at the expense of productivity, liquidity and sales growth.
But if everyone works for the same company and they all have a common goal, shouldn't they have a common indicator?
This indicator exists and is called "Hourly Profit". Time is the most limited resource we have! The month has only 30 days, with 24 hours. We can ask the bank for money but not time. More important than the jobs we are going to accept, are which ones we are going to reject, or in other words, which ones are not properly compensated for the time invested.
This concept is summarized in productivity, which is achieved by optimizing the total resources and not just the cost of paper or raw material. Twist automates tasks and digitizes processes aimed at increasing the productivity of production plants.
Part 6: Forms
We are obsessed with data and are convinced that only with data you can have a customer-centric culture. For this reason, we ask you to help us maintain these 5 principles that will help speed up the implementation process:
Written record: any request for help or support must be requested via the support chat. If you require a meeting or videoconference, this should also be requested by that means. The only way we have to improve is with data.
Follow-up: we will schedule 4 meetings during the first month of implementation, to support you in the process, if you have disagreements please express them in those meetings and make sure the problem is recorded in the chat. What is not measured is not managed.
Collaboration: we are a platform and what you see is the result of the collaboration of hundreds of clients/ people in different countries, if you have an opportunity for improvement or any problems, please let us know. We will see how to solve it without resulting in complexity, all together we are stronger than each individually.
Simple: remember, we love simple things, we don't give space to complexity. Help us keep the system simple. If we don't know an automatic way to do something, we prefer not to do anything, digitization only happens when there is automation, the opposite is pure data recording.