Productivity Trumps Cost—By Miles!
The following post was submitted by 2016 President's Conference sponsor, Heidelberg.
Let’s view the print process as a car manufacturing production line. It’s designed, tested, and highly monitored to achieve the highest level of efficiency at the lowest unit cost and at a set quality level.
Print is a manufacturing process and should be viewed in exactly the same way.
Automation and color monitoring (importantly it must be spectrophotometry!) has led to print being a honed process, not an art. Equipment investment should therefore be judged on its ultimate output cost per sheet.
Productivity of your investment far outweighs any initial premium you may pay for that piece of equipment. If you are hanging onto older, paid-off equipment, I can almost guarantee that the latest equipment used by competitors has a lower cost per sheet, including the fact that their cost rate includes paying back that new investment.
Let’s look at an example in the finishing department, which tends to be the area using most of the older technology, i.e. lacking regular replacement investments to keep pace with technology.
How Can I Save?
Let’s take a look at the average cost to produce a 16-page signature on a two-shift operation:
- With an older folder, manufacturing at just 5,800 sheets per hour, you’re spending an average of .00763 cents per folded signature.
- With a new folder, such as a Stahlfolder KH 82, manufacturing at 11,000 sheets per hour, you will cut the cost down to an average of .00433 cents per folded signature. This means if you are running 2.8 million sheets per month, you have the potential to save over $9,000 a month with the newer machine. That’s an annual savings of $108,000.
The same analysis needs to be carried out across every cost center, plus the combined capacity of linked processes also needs to match. The most efficient printers load the business from back to front (finishing to prepress), therefore maximizing billings, reducing work in progress, and even adjusting cost rates daily to fill the capacity of each cost center.
It’s a waste of investment funds, time, and cash flow if one process is highly productive—only to hit a significantly lower capacity wall downstream. If you ran a car manufacturing line, would you produce 8 wheels for each car?