Manager's Toolkit: Build Better BHR’s: Get Better Cost Information

Build Better BHR’s: Get Better Cost Information – Make Better Pricing Decisions For many years, most printing companies have used estimating, pricing, and costing systems based on budgeted hourly cost rates, or BHR’s. BHR-based systems are now used in virtually every segment of the printing industry by companies of almost every type and size. The methodologies for calculating BHR’s are taught in university-level print estimating and management classes, and BHR’s are a core element in all major print MIS/ERP software systems. Despite their widespread use, however, traditional BHR systems have a serious flaw. Put simply, they don’t work—at least not very well. This report explains why traditional BHR systems are inherently incapable of providing the accurate cost information that printing company managers need to make sound business decisions. Author G. David Dodd first describes the processes used to calculate conventional BHR’s and shows why those processes lead to cost inaccuracies. Then he introduces enhanced BHR’s—hourly cost rates that eliminate the cost distortions produced by traditional BHR systems. Finally, Dodd provides a detailed, step-by-step explanation (with spreadsheets) of how a printing company would develop and use enhanced BHR’s. For managers who want to improve the accuracy of their job cost information, this is a must-have resource. 47 pages. Available for immediate download as a PDF file.