Pulp Fact, Not Fiction --DickesonMarch 2004
"It's the paper, stupid." Let's start tracking paper dwell-time in place of labor time. Anything that increases paper time is a constraint on cash-to-cash speed. If you decide to operate 16/5 (two shifts, five-day week), that's a decision that can add 88 hours to the paper time. If you decide to wait until all the cost sheets are in, add maybe 328 hours. If you let 30-day terms on receivables become 45 days, add 360 hours. Don't start berating press crews who took maybe two hours more to finish a job on-press than called for by production standards! What that added to paper time is peanuts.
Before spending $4 million for a new six-color press, look first to the dwell-time of paper that management imposes. Can you increase efficiency by changing those unconscious or semi-conscious decisions far more than you can increase it with that new press? First thing, take the decision out of that unconscious or semi-conscious state by supplying data that makes clear—makes sense—out of what we're really doing.
Get the Answers
How? You know the answer to that one. Lift those self-imposed constraints. Want to know why our printing industry has become overloaded with capacity? Look no further.
Suppose the customer supplies the paper. What do we do then? No different. We're timing, not costing, paper. Not to worry about dollars at this point. Just watch that meter on hours. You know when you received the lots of paper supplied by the customer. You know when the customer paid the invoice.
Let's talk a little about RFID (Radio Frequency Identifier) and how it's making data collection for paper a piece of cake. When you receive the paper lot, regardless of who supplies it, attach a little RFID to it. The chip in the RFID is a wireless transmitter to your basic file server telling you the date and hour when it's received, among many other things. (WalMart is leading the way on this.) We'll follow this technology to make paper quantity, basis weight, location and timing easy, current and accurate. (Cost is around 30 cents a chip today, but predicted to go to 4 cents or less soon. They're even talking about RFID chips on bank notes!)
I told you that what I was going to suggest was radical. But maybe it's not so radical after all. RFID is here and it's now. We know that BHRs haven't worked in the past. In fact, the BHR system has been so flawed for so many years that printing managers have become disillusioned about all statistical systems. We're running our businesses by notebooks out of our hip pocket.
Our GLA—General Ledger Accounting—is out of date, late and quaint. It's a broken rear-view mirror only understood by a priesthood of accountants who keep it for our 10 pounds of revenue code and regulations and the banks. Is it any wonder that we mistrust all statistical systems?
Show me any one of the major system suppliers to the printing industry, anywhere in the world, offering reporting based on paper velocity and cash-to-cash. What are you waiting for? Want Microsoft to make it available in some bug-laden version of Windows? They will if you don't.
It's time to wake up and smell the roses—er—the paper.
—Roger V. Dickeson
About the Author
Roger Dickeson is a printing productivity consultant based in Sylmar, CA. He can be reached via e-mail: email@example.com.