Transforming a Printing Company Via Benchmarking
Could you imagine turning on ESPN and watching a game in which the players and coaches had no idea what the score is? Sounds to me like a chaotic environment that would get out of hand real fast.
Now how about operating a printing company without metrics to measure—on any given day—if it is successful or not?
In the extremely competitive print marketplace, I believe any company looking to be a leader cannot afford to wait till the end of the month to review performances. To ensure 100-precent cost transparency, it is vital to collect accurate production data and times for devices that are not integrated in the workflow.
I would like to welcome special guest Oliver Demus to my blog this week. Director of business consulting at Heidelberg USA, Oliver brings expertise in helping printers around the country improve efficiency, reduce costs and maximize profit. We’re here to look at what printers are currently doing to benchmark success, what technologies and methods are available to improve performance and the business transformation that can occur when properly implemented.
Is there a large trend associated with printers being unable to truly answer on a daily basis whether they’re profitable due to having a lack of accurate metrics in place?
Demus: Many print shops don’t do job costing at all, meaning actual production data is not collected. Therefore, there is no metric in place to judge if a job was profitable or not. In cases where print shops collect data, the metrics are in place and they are fairly accurate.
How often do you find such companies are actually reviewing their data and what are some of the largest issues that arise from operating a business like this?
Demus: Data is very often only reviewed on jobs where the final cost was higher than estimated. This very often can be too late. Data should be reviewed on a daily basis and investigated if actual varies by too much from estimated. This gives the opportunity to eliminate problems for the future.
Likewise, if performance is better than estimated, the data can be reviewed as to learn why. Then those metrics or process changes can be implemented to improve performance going forward.
What is the typical consulting process when looking to initially establish metrics or improve the current ones in place to more accurately reflect estimated vs. actual costs?
Demus: First, we review the current setting and observe how the actual operations match the assumptions that go into estimating. In a second step, we review the quality of the data. Sometimes the operational structure is setup in such a way that there is plenty of room for interpretation of what is relevant for job costing. So we look for as much detail as we can gather about the structure of the print shop’s operation.
We document the details of how that data is gathered and stored manually, or we analyze the data that is reported automatically via the press’ data center or in the print shop’s MIS system. Clearly, if the data is collected manually, there is less to work with, but even then we can identify room for improvement when you know what you are looking for.
For the companies that are not able to invest in fully intergraded JDF workflows that provide post production job costing, what current technologies or methods offer a solution?
Demus: There are simple components that can help jump start job costing, like counter boxes that can be hooked up to older equipment or basic terminals to enter data manually.
What are the types of business transformations that you have seen from improvement in this area?
Demus: A good example of transformation would be cost savings—especially in the makeready area and paper waste. Usually we are able to help customers to save between $5,000 to $15,000 per month or, accordingly, $60,000 to 180,000 per year.
Heidelberg’s Business Consulting services lead printers around the globe toward success in a wide variety of areas. Could you explain the three main components and what they offer?
1) Eliminating waste in regards to time and material. Heidelberg teaches and preaches lean manufacturing and supports education to increase throughput and output.
2) We very often see lower productivity because of knowledge gaps. So the second important component is to increase knowledge. This could be specific to a piece of equipment or more focused on procedures surrounding equipment or general production flow.
3. Lastly, would be increased awareness of data. We look into the accuracy and the practical uses of the data when collected.
Thank you Oliver for sharing your insight and taking the time to be part of my blog.
More information on Heidelberg Business Consulting services is available online.
He enjoys sharing his insight and involvement within the industry and is always searching for new experiences. Nick’s goal is to lead his generation into the future of the printing industry.