Colorscope, Inc. Harvard Business School Case Case Software #!S"1$
197040
Cop%ri&ht ' $010 (resident and )ellows )ellows of Harvard Colle&e. *o part of this product +a% e reproduced, stored in a retrieval s%ste+ or trans+itted in an% for+ or % an% +eans-electronic, +echanical, photocop%in&, recordin& or otherwise-without the per+ission of Harvard Business School.
Exhibit 1 (rice trend of color separations to scan, asse+le, proof and output printer specified fil+ for a h%pothetical direct +ail catalo& pa&e with one i+a&e
Price/Page of work ($):
1991
199$
199
1994
199/
Colorscope
1,100
900
7/0
/0
00
400
4$/
4/0
47/
/00
Service-Brea!
$ Service "Bureaus such as in2o3s and lpha&raphics t%picall% do 5os that are cheaper, and involve fewer and6or s+aller pa&es.
Exhibit " 8i+e6Cost Brea2down for the Catalo& (roducer
irect +ail catalo&ers constituted over 90: of Colorscope3s custo+ers. 8o produce an avera&e pro5ect run, in this e;a+ple, 1 +illion copies of a /$"pa&e catalo&, costs would rea2 down as follows<
esi&n = wee2s>, writin& cop%, producin& la%outs, &ainin& +ana&e+ent approvals.
(hoto&raph% =$ wee2s>, $00" 00 i+a&es, studio and location shots.
(repress =$ wee2s>, $ rounds of proofs to the pro5ect +ana&er.
(rintin& = da%s>, cuttin&, indin&, addressin& for national distriution
istriution =$" wee2s>, second class ul2 rate post.
10,000
/0,000
0,000
1,00,000
1$0,000
Exhibit & 8op +erican (re"press Co+petitors =does not i nclude printers that have inte&rated forward> Co#pa%
Sales E#plo%ees ('$S)
?C@ AS pplied raphics 8echnolo&ies Blac2 ot roup Schaw2, Inc.
acilities Pri#ar% Bsiess (sites)
$00 10 109 104
1,/0 1,00 900 7$9
$0 1 1$ 1$
+a&aines, direct +ail, pac2a&in& +a&aines, direct +ail, pac2a&in& +a&s, dir. +ail, pac2a&in&, oo2s +a&s, dir. +ail, pac2a&in&, a&enc%
+erican Color
7
40
1 +a&s, dir. +ail, p2&, a&nc%, newsp
Inta&lio Divi"Color @nteron roup
0 /
4/0 400
1 pac2a&in& 4 +a&s, dir. +ail, p2&, a&nc%, oo2s
wi2 International Color ssociates 8SI raphics Blan2s Color I+a&in& reer raphics, Inc.
41 7 $7 $4 $$
110 90 1 $0 1/
1 pac2a&in&, a&enc% 1 pac2a&in&, pulishin&, catalo&s 4 +a&s, dir. +ail, pac2a&in&, oo2s 1 +a&s, dir. +ail, pac2a&in&, a&enc% $ +a&s, dir. +ail, p2&, a&nc%, retail
Exhibit : Fos co+ leted in Fune 199E *ob + 1..1 1..! 1.. 11.1 11.! 1!.1 1!.! 1!. 1!." 1.1 1".1 1".! 1". 1"." 1".& 1&.1 1&.! 1.1 1.! 1. 10.1 10.! 1.1 12.1 12.! !..1
Csto#er + Pages 10 1 10 1 10 $ 11 1 11 1 1$ 1 1$ $ 1$ $ 1$ $ 1 1$ 14 1 14 1 14 1 14 1 14 1 1/ 1 1/ 1 1 $ 1 4 1 4 17 1 17 1 1 4 19 4 19 1 $0 1
,evee 9,00 9,00 $,000 1$,000 11,000 11,000 $,000 $$,000 $0,000 /0,000 7,00 ,000 ,000 9,000 9,00 11,000 11,000 $0,000 $,000 1,400 ,000 10,000 4,000 $,000 1$,000 0
00.00 00.00 71.7/ 7/0.00 7./0 7./0 71.7/ 7./0 $/.00 90. 47./0 /00.00 /00.00 /$./0 1$./0 7./0 7./0 $/.00 /00.00 /0.00 /00.00 $/.00 1,000.00 /00.00 7/0.00 "
$,400
40
//
Exhibit : Fos co+ leted in Fune 199E *ob + 1..1 1..! 1.. 11.1 11.! 1!.1 1!.! 1!. 1!." 1.1 1".1 1".! 1". 1"." 1".& 1&.1 1&.! 1.1 1.! 1. 10.1 10.! 1.1 12.1 12.! !..1 3otal
Csto#er + Pages 10 1 10 1 10 $ 11 1 11 1 1$ 1 1$ $ 1$ $ 1$ $ 1 1$ 14 1 14 1 14 1 14 1 14 1 1/ 1 1/ 1 1 $ 1 4 1 4 17 1 17 1 1 4 19 4 19 1 $0 1 &"&
Ell fi&ures are dis&uised
,evee 9,00 9,00 $,000 1$,000 11,000 11,000 $,000 $$,000 $0,000 /0,000 7,00 ,000 ,000 9,000 9,00 11,000 11,000 $0,000 $,000 1,400 ,000 10,000 4,000 $,000 1$,000 0 $1&4!..
00.00 00.00 71.7/ 7/0.00 7./0 7./0 71.7/ 7./0 $/.00 90. 47./0 /00.00 /00.00 /$./0 1$./0 7./0 7./0 $/.00 /00.00 /0.00 /00.00 $/.00 1,000.00 /00.00 7/0.00 " /7./
$,400
40
//
Exhibit 2: Hours cloc2ed at different wor2stations in Fune 199E *5B+
1001 100$ 100 1101 110$ 1$01 1$0$ 1$0 1$04 101 1401 140$ 140 1404 140/ 1/01 1/0$ 101 10$ 10 1701 170$ 101 1901 190$ $001 Idle 8i+e Capacit%
*ob Csto#er + Preparatio 10 4 10 10 7 11 4 11 4 1$ 4 1$ 7 1$ 1$ 1 1/ 14 / 14 4 14 4 14 4 14 4 1/ 4 1/ 4 1 7 1 $ 1 $ 17 4 17 4 1 1 19 $ 19 / $0 1 117 4 1.
6pplie8 Scaig Cost $9/.$9 $ $$1.47 $4 /1.7/ 40 $9/.$9 1 $9/.$9 1 $9/.$9 1 /1.7/ $ 44$.9 4 44$.9 0 ### 10 9.11 14 $9/.$9 19 $9/.$9 $0 $9/.$9 $$ $9/.$9 $0 $9/.$9 $1 $9/.$9 $0 /1.7/ $ 147.4 / 147.4 / $9/.$9 $0 $9/.$9 $0 7.$ / 147.4 / 9.11 19 7.$ 1 ### 1$ ### $ $11411
6pplie8 Cost ,$1$.0 $,409.$$ 4,01/.7 1,0.1/ 1,0.1/ 1,0.1/ ,$1$.0 ,41.0 ,011./ 1,049.9/ 1,40/. 1,907.0 $,007. $,$0.4/ $,007. $,10.07 $,007. $,09.99 /01.9$ /01.9$ $,007. $,007. /01.9$ /01.9$ 1,907.0 100. 1,4/.14 $,10.7
". $ "4!"&72.
7.$
Hours cloc2ed in different wor2 stations include rewor2 hours &iven in @;hiit 10. E ll fi&ures are dis&uised
100.
6sse#bl%
4$ 7/ 0 $ $ / 4 / $/0 $ $ 4 9 40 0 10 11 9 41 11 1$ 4$ $ 11/$ 1$ 1!.
6pplie8 Cost ,04.9 $,74/./ /,419.44 $,17.7 $,0$.$ $,1$.0 4,191.0 4,$4./9 4,191.0 1,04.1 $,1$.0 $,1$.0 $,4/.1 $,01. $,01. $,1.11 $,90.7 4,/.// 7$$./9 794./ $,1.11 $,9$. 794./ 7.11 ,04.9 144./$ ,$4$.$ 9,$49.1 $ 2!4"217.
7$.$
5tpt
1 4 4 4 $ 4 4 4 4 4 1 $ 4 4 $ 1 4 1 1 7 !..
6pplie8 9alit% 6pplie8 Cost Cotrol Cost 1,1/./7 7 04.$/ 1,1/./7 90./7 $,71.1/ 90./7 /9$.79 4 4/.$9 /9$.79 4 4/.$9 /9$.79 /17.9 1,1/./7 / 41.1 1,1/./7 /17.9 1,1/./7 90./7 4,74$.0 0 $,/9./ /9$.79 4 4/.$9 1,1/./7 7 04.$/ /9$.79 $/.97 /9$.79 / 41.1 /9$.79 4 4/.$9 /9$.79 4 4/.$9 1,1/./7 7 04.$/ 1,1/./7 9 77.90 14.$0 1 .$ $9.9 1 .$ /9$.79 $/.97 /9$.79 / 41.1 $9.9 1 .$ 14.$0 1 .$ /9$.79 / 41.1 14.$0 1 .$ $4,1/.07 147 1$,9.$9 /,4.$ 1 1,1$$.1 $ !2427"
14.$0
1.
+++
.$
$40000 00 $00
3otal
9 1 14 / / $ 110 11 110 4/7 /9 70 / 71 7$ 79 110 19 $1 70 74 $0 $1 7/ $191 $49 !"".
Cost
'aterial
,$.0 7,$/$. 1,01.$ /,007.$ 4,$.77 /,$4.4/ 9,/7.$ 10,14.09 9,/$1.4 9,//4.0 /,0$4. ,04.71 /,11./4 ,1$9.47 /,4$. ,1/9./4 ,9.17 9,4$4.7 1,0. 1,$7.1 /,97$. ,$9.99 1,7/.1 1,7/1.19 ,/.9 //.$4 190,10
,100 4,00 4,/00 1,00 1,/00 1,/00 ,00 ,400 ,$00 14,000 1,00 ,100 ,900 $,100 $,000 $,$00 /,100 ,00 00 1,000 $,100 $,/00 $,00 $,700 $,$00 $00 ,00
Cost 'aterial 1,4$.0 11,/$. 17,/1.$ ,07.$ ,$.77 ,$4.4/ 1$,7.$ 1,/4.09 1$,7$1.4 /,//4.0 ,$4. 9,404.71 9,/11./4 ,$$9.47 7,4$. ,/9./4 1$,0.17 1$,7$4.7 $,$0. $,$7.1 ,07$. ,79.99 4,/.1 4,4/1.19 ,//.9 7/.$4 $!04". $1,9.7
###
Sellig Price 9,00.00 9,00.00 $,000.00 1$,000.00 11,000.00 11,000.00 $,000.00 $$,000.00 $0,000.00 /0,000.00 7,00.00 ,000.00 ,000.00 9,000.00 9,00.00 11,000.00 11,000.00 $0,000.00 $,000.00 1,400.00 ,000.00 10,000.00 4,000.00 $,000.00 1$,000.00 " $1&4!..7.. Idle 8i+e
(rofit Gent
C'
C';
=,$.0> "71.17: =$,$/$.> "$.47: /,4.7$ $.: /,19$.7$ 4.$7: 4,7.$ 4$.1: 4,17/.// 7.9: 10,1$.74 44.19: ,41/.91 .$/: 7,$7. .9: =,//4.0> "7.11: 97/.14 1$./0: =1,404.71> "17./: =1,/11./4> "1.9: 770./ ./: 1,9/7.$ 19.9: $,40.4 $4.00: =1,0.17> "9./: 7,$7/.$4 .: =$0.> "10.: =1,4$7.1> -1.172"; =7$.> "0.91: 1,$10.01 1$.10: =/.1> ".: =$,4/1.19> "1$$./: ,44.1 $.7: =7/.$4> 41,79.7 1.$4: =$1,40.00>
###
"41$ "11/
"$//4
417
47 "14/1
### 00.00 ### 00.00 71.7/ 7/0.00 7./0 7./0 71.7/ 7./0 $/.00 ### $ 2.7 47./0 /00.00 /00.00 /$./0 1$./0 7./0 ### 7./0 $/.00 /00.00 $ &.7.. /00.00 $/.00 ### 1,000.00 ### /00.00 7/0.00 " ###
Exhibit 1.: Gewor2 hoursE
Gewor2 due to chan&e in specifications % custo+er *5B+
*ob Preparatio
1..1 1..! 1.1 1&.! 1.1 12.1 3otal
0 0 $ 1 0 1 4
Scaig
" " 147.4 7.$ " 7.$
1 / 4 1 1 /
6sse#bl%
1,0.1/ 0.07 /01.9$ 401./4 100. 100.
10 10 4 41
7$$./9 4./ 7$$./9 /7.07 $1.7 $9.04
$9.04 1,1/.1/ 1,011. $1.7
9alit% Cotrol iitiate8 rework of hose errors *5B+
*ob Preparatio
1.1 1".! 1". 1. 3otal E ll fi&ures are dis&uised
1 0 0 1 $
Scaig
7.$ " " 7.$
9 10 $/
6sse#bl%
01.1/ 90.4 1,00.4 01.1/
4 1 14 7
9alit% Cotrol
5tpt
4 4 $ 1 1 0 1$
/9$.79 /9$.79 $9.9 14.$0 14.$0 "
17$.4 $/.97 17$.4 " " "
9alit% Cotrol
5tpt
1 $ $ 1
$ $ 0 0 0 7
14.$0 $9.9 $9.9 14.$0
1 $ 1 0 4
Cost 3otal 'aterial /,794 ! ,1 !1 $,41 !1 $,70$ 1" 1,4/ & 1,4 17,4/4 22
3otal
.$ 17$.4 .$ "
1. !2 !0 0"
1,99 ,/$9 ,9 1,$40 10,0/
Exhibit 11: Selected )inancial Infor+ation for Fune 199 E
*ob Preparatio
Scaig
,000.0 /00.0 $,000.0 1,11./ 11,11./ 1,000.0
=ages 7 ft7
6sse#bl%
$,000.0 $/,000.0 $,000.0 /,$4/.9 4,$4/.9 1,000.0
5tpt
4,000.0 10,000.0 ,000.0 10,491. 9$,491. 4,000.0
9alit% Cotrol
10,000.0 14,000.0 4,000.0 1,9. $9,9. $,000.0
11,000.0 /00.0 1,000.0 1,11./ 1,11./ /00.0
E ll fi&ures are dis&uised
!aor Hours Idle ctual
H pplied
10 40 1$0 $00 10 4 $ 1$ 7 1 117 1$ 11/$ 1 147 7.$ 100. 7$.$ 14.$0 .$ 7.1: 9/.: 90.00: 1./0: 91.: ,7.14 1,4/.14 ,$4$.$ $4,1/.07 1$,9.$9
Anderapplied %
,174.
$,10.7
11,11.4 4,$4/.90
9,$49.1
9$,491.0
/,4.$
$9,9.4
1,1$$.1
1,11.4
?8le
3otal
1!&4...7. &.4...7. .4...7. !.4...7. !!&4...7. 1&4...7.
1,000.0
,/00
$440
$1$,000.00
9$.$1
9$.$11147/4 1/000
Exhibit 1!: 'aterials ex ese i *e 122@
*ob+
3otal 'aterials expese
1..1 1..! 1.. 11.1 11.! 1!.1 1!.! 1!. 1!." 1.1 1".1 1".! 1". 1"." 1".& 1&.1 1&.! 1.1 1.! 1. 10.1 10.! 1.1 12.1 12.! !..1 3otal Ell fi&ures are dis&uised Includes +aterials for rewor2.
/,400 ,/00 4,/00 1,00 1,/00 1,/00 ,00 ,400 ,$00 1,000 1,00 ,100 ,900 $,100 $000 $$00 ,00 ,00 00 1,000 $100 $,/00 1,00 1,700 $,$00 $00 $0&4...
Csto#er iitiate8 rework
Correctio of hose error
$,700 1,100
1,000
1,000 1,000 1,000
1,/00
/00
1,000 1,000
$4..
$4&..
,100 4,00 4,/00 1,00 1,/00 1,/00 ,00 ,400 ,$00 14,000 1,00 ,100 ,900 $,100 $,000 $,$00 /,100 ,00 00 1,000 $,100 $,/00 $,00 $,700 $,$00 $00 ,00
