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It's the Paper, Stupid --Dickeson

October 2003
Continuously measure the capacity utilization of paper. We start our conversion process in commercial printing with a given amount of raw material—paper. Finally, we deliver a portion of that paper to our customer. The paper we don't deliver is waste. The statistic we must measure is the quantity of that waste. That's a key to productive success. The relationship between paper waste and profit is direct.

If we don't measure the utilization of paper we can neither predict nor control efficiency—the effectiveness of the business. We must know the pounds of input and the pounds of deliverable output. Value added to paper is the difference between sales price and the cost of paper. There is no way that profitability can be optimized without measuring paper utilization. You must follow the paper used and its cost.

Weights and Measures

How shall we measure the waste? First, determine the pounds of paper required per thousand units of the finished job. Call that the M weight—the weight of the finished product. When multiplied by the count of actually delivered product units, we know the weight of the output. The pounds actually used are the input. Subtract output from input and the difference is waste—total waste. Subtract the cost of the waste directly from profit. That's the global aspect of waste.

It is, indeed, the paper, good buddies.

What caused the waste? The devil, as always, is in the details. Paper packaging, fiber cores, slab-off, makeready, stops and restarts, running waste, trim, overrun, signature imbalance and so on are the causes. If we would reduce waste, the losses from each of those sources must be measured. That's the granular aspect of waste. Is it important? Only if you want to make some money! You must decide how important it is for the business to make a profit.

The faster we turn over paper, the more profit we make. Follow that paper!

But how shall we follow the paper? Track the time it sleeps in raw inventory. Time becomes the process measurement key. The moment paper is placed in raw inventory the clock begins to tick. How long does it stay in raw inventory? (When it's snoozing in raw inventory we're not making a nickel.) We have to know the date and time each roll or package of paper was received. We need to know the date and time it left raw inventory for a job. Subtract issue time from time of receiving in inventory and you have the paper dwell-time as raw material. The greater that dwell-time, the less the profit. It's that simple.
 

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