Artgrafix Blog

Business has been holding steady and is off to a pretty good start in 2007.  Given everything you hear on TV about interest rates, China, oil, and more I am pretty happy with how things are.  Not relaxed, but happy.  What keeps us from relaxing is higher cost pressures and longer lead times.  Keeping an eye on these and planning will be critical to both keeping customers happy, costs in line and profitability.

What we do see in our business is lengthening lead times to get products, still some upward pressure on costs and manufacturers looking for longer runs and therefore larger orders.  Our leadtimes have moved out a couple of weeks on average from about 10 days to over 3 weeks for our basic materials we fabricate.  While it is due to a number of understandable factors, the industry does not always have the mechanisms in place to communicate the changes in longer supply times.  As you move closer to the end user of the product, this compresses the time we all have to turn items around to meet the promise dates we all have.  We can not ask customers to stock more as they do not have the space or are seeing the same economic predictions we see.  For us, more inventory is a quick fix for this (but it takes time to build it up because you are playing catch-up) or doing more fabricating (cutting and adhesive coating in our case) and of coarse all this costs more.  We do see competitors who do not have items in stock and their customers call us for supply, our challenge is to make these customers permanent, have supply for them and our current custmers.  It is a balancing act and sometimes it’s tough to keep your balance.

Costs, notable electricity and fuel continue to climb like a rocket.  Even with oil down from $75 to $60 a barrel, our energy costs have gone up more than 40% from 2006 and they do not seem to be headed down.  After an inital spike of price increases at the end of last year, we are seeing folks try for another round of increases now, but they are not sticking as well as last fall and are not as aggressive yet.  Companies are increasing the orders required for shipping to keep costs in line but eventually we see increasing costs for raw materials. 

Whether its bigger shipments, higher costs, doing more or whatever, the pressure on costs and prices is coming.  The fact the economy stays strong certainly helps with dealing with these pressures.  The choices, while not always pleasant, are not the difficult ones we have all faced in the past.  It’s just important to stay on top of things and make the best decisions to insure service levels and to meet our commitments.

Anybody who ships fragile items via UPS, knows of the monster who lives in their automatic conveyor sorting system.  We believe that the monster has a particular fondness for foam board products and waits for our large boxes to take a bite out of them.  Anyone who has had damaged shipments from the monster knows UPS covers for him (or her) with an almost automatic email titled “insufficient packaging” anytime you make a complaint.  I am sure that Fedex, DHL and others all have similar situations and damaged boxes are not infrequent. 

What we have done is purchase overpack sleeves for may of our foam board box sizes.  We do run into the “oversized limitations” on some of our bigger boxes of foam boards and for those we have changed all of those boxes to double-walled stronger test corrugated board.  For the moment, the monster seems to be tame but I am sure he will make a return from time to time.  As you can tell, our changes may have not been the least costly to make, but first of all we needed to reduce shipping damage significantly.  I am not so sanguine to believe that we have tamed the monster forever, but we will always be on the lookout for better ways to package products.  Any other ideas on this will be read with great interest. 

We are getting a lot of inquiries for how to mount (and less so overlaminate) fine art or giclee prints in roll laminators.  The major needs as we have been told are for the adhesives to be acid free, non-yellowing and last at least 50+ years.  We have found cold or pressure sensitive adhesives to be the best choice as the thicker papers make heat activated adhesives more difficult in a roller press (dry mount adhesive in a press would be easier and archival dry mount adhesives are available).  We have identified acid free acrylic adhesives and are testing them now.  While they seem fine to us initially, any experience others have had would be appreciated.

In our previous post we described improving the sleds or non-stick support board used for laminating.  One of our goals was to be able to ship a sled roll-up to minimize damage and UPS shipping charges.  What we are testing currently is a sled made from 20 mil polyester film (10 mil sheets laminated together).  It is pretty rigid and only rolls up into a 12″ diameter, but our test results here have been pretty good.  It is not quite as non-stick as we would like, but minor adhesive on the surface is easy to remove with rubbing alcohol and the prints easily remove from the polyester.  We’ll keep you posted on our further tests this month.