Monday, April 5, 2010

Lean Printing; the benefits of implementing an MIS/ERP solution in small to mid size print shops…

Printing has become a very complex and constantly changing industry. With the rapid advancement of digital technology, the rise in the use of the internet, globalization and the commoditization of the printed products the industry as a whole has seen compressed margins and a new level of competition.

Combined with a weak US economy and lagging consumer confidence this storm has wreaked havoc on US print shops.

Using the Business Register from the US Census Bureau the number of shops has declined from 36,024 in 2003 to 29,550 in 2008 that is a loss of 6,474 print shops in 5 years.(1) It has become a top priority of print shop leadership to find more creative ways to distinguish themselves among the crowd and to maintain profitability. Today, commercial printers have difficulty differentiating themselves from one another; this has come from the elimination of craft positions and increased reliance on automation to maintain profitability. One of the ways that companies can get the most out of their organization is through the implementation of a MIS/ERP solution to help keep inline with lean manufacturing principles.

Lean manufacturing is a combination of practices, polices and philosophies that allows an organization to shorten the time between order placement and product delivery by eliminating waste in equipment usage, labor resources, and materials to produce higher quality products and greater profit margins. (2) Even though Lean Manufacturing principles have been around for ages the printing industry has been slow to adapt them. (3) In fact, it is a common misconception that you must be a large organization to benefit from Lean.

NAICS 323 Printing - from the Business Register of the Census Bureau
Enterprise Size
2008 % of Total  
1-4 employees
5-9 Employees
10-19 Employees
20-49 Employees
50-99 Employees
100+ Employees

 In the US the Small Business Administration classifies a small business as a company with less than 100 employees. In the European Union a small business is any business with less than 50 employees. In 2008 almost 93% of all print shops in the United States had 49 or less employees. Yet when we look at these companies we find that less than 5% of small firms and less than 20% of large firms have an Enterprise Resource Planning (ERP) System. (4)

According to a 2004 Gartner, Inc. white paper entitled, "ERP Applications Help Achieve Lean Manufacturing," there are five areas in which an MIS/ERP solution can be leveraged to build a successful Lean Manufacturing operation:

  1. Product Data Management

  2. Forecasting

  3. Line Design

  4. Line Scheduling

  5. Flow Visualization
MIS/ERP solutions offer manufacturing organizations many benefits, it can help with value stream mapping of individual processes and help to increase the flow of information to the leadership to increase response time and limit buffering for problem correction. It can be helpful to human resources managers to monitor and asses the strengths and weaknesses in the organization's employees and give them and the production manager's feedback on employee's productivity and effectiveness.

MIS/ERP solutions can affect not only the pricing and estimating strategy but also can affect the days sales outstanding by making the billing/invoicing systems more efficient. Due to the high importance of cash in running a business, it is in a company's best interest to collect outstanding receivables as quickly as possible. By quickly turning sales into cash, a company has the chance to put the cash to use again. Printing is a capital intensive business and the proper use of all resources is critical.

Indentifying, assessing, and implementing a successful MIS/ERP solution can be a daunting task. Not only are the systems to be implemented important but equally important is the company doing the implementation. The analysts and sales staff must be familiar with the intimacies of print shop operations and it is even better for your salesperson to have worked for a number of years in the areas of the shop to be affected. If your salesperson has not "walked the walk" it is almost like giving someone a heart transplant after reading a book. To be successful leadership must consider the following three areas for assessment: 1) Technology 2) Human Resources 3) Systems after the assessment leadership must look for ways to implement the simplification of the identified processes and lastly place policies to safeguard performance with metrics for measurement.

Value mapping a process can help identify "cost added" activities and "value added" activities. A "cost added" activity is any activity that does not directly increase the value of the product. When looking to streamline a process the RIT Center for Excellence in Lean Enterprise has identified 7 different kinds of "cost added" activities.(5) 1) Transportation; movement of material in the plant 2) Inventory; anything of value waiting in process 3) Motion; excess movement of people 4) Waiting; idle operation of machines 5) Overproduction; producing more product at each step that is needed downstream 6)Over-Processing; performing extra processing steps that do not add value 7) Defects; materials spoiled in the process.

Until the advent of the proliferation of digital technologies the printing industry has fought against using many manufacturing techniques to save the impression that it is a "craft" done by "artisans" instead of looking at the productivity and effectiveness at its employees and processes. Until the digital age the printing industry was filled with highly skilled workers that could output the day's jobs using their "craft" to uniquely produce each job. This lag in adopting "lean manufacturing" has positioned the industry to be caught up in the "perfect storm." Michael Baker in his blog, "Lean Manufacturing Blog" (5) states,

"Lean manufacturing may be the last hope for the printing industry. Because of the promises, the forecast and expected savings companies can reap from implementing lean manufacturing principles: the printing industry is believed to be the most and primarily boosted and lifted up by the lean manufacturing approaches.
The printing industry has somehow turned into a damsel in distress. With the lean manufacturing, figuratively, its knight in shining armor."

Using Lean Manufacturing as our armor, technology then becomes our sword. Technology is one of the most valuable "keys" to unlock the door to reducing the costs of business and manufacturing processes. Having access to the proper information is critical for all areas of a printing organization from the receiving or taking of the order through every step in the process to the point that it is delivered to the customer and eventually billed and the payment received. It is estimated that there is a 60% chance that a job will get delayed somewhere in the production process. The delay ultimately will be caused by the lack of information. These delays cause jobs to have to be expedited to maintain delivery promises. This sacrifice of efficiency to maintain "service at all costs" puts an organization in jeopardy.

The effective implementation of a MIS/ERP system to allow for the critical exchange of information and the proper allocation of resources can be tantamount to the long term success of an organization. MIS/ERP systems have come a long way now integrating every area of the shop. From web submission to the ordering of inventory, efficient pre press workflow, maintaining job ticketing information and feedback to production managers of bottlenecks or potential shop problems, to the dissemination of business intelligence to the leadership and the eventual shipping and invoicing of the job to the client.

Due to the varied services and product offerings of today print shops, a solid MIS solution must be modular and offer flexibility in designing an end to end solution for your organization. It must not just automate the simple tasks in the production organization but must also provide real time feed back to production managers and shop leaders so they can monitor the key performance indicators that had been identified in the original analysis. One of the key factors in lean manufacturing is that the employees must be surrounded in a culture that promotes thought and the questioning of all processes. Leadership must have the business intelligence real time to minimize the buffers so that they can be quick to react to opportunities to impact and improve shop efficiencies.

As JDF/Cip4 technologies develop and come to the forefront you will want a MIS/ERP solution that can help you manage your equipment workflow and address challenges that come from improperly or inefficiently installed pieces of equipment. These inefficiencies can create "islands of automation" which can contribute to "cost added" activities which will undermine your lean efforts. Leveraging CIM principals can enhance the areas of 1) Improved quality 2) Increased productivity 3) Lowered costs 4) Shorter customer lead times 5)Reduced waste, labor and inventory 6) Greater flexibility and responsiveness - all are parts of a good lean strategy.

This use of lean manufacturing principles and techniques will further separate the leaders from the challengers as the competitive field narrows through attrition. Only the companies that embrace the emerging digital technologies and proven manufacturing processes and strive to continually improve those processes will survive.

Happy Sale'ing
Pirate Mike

  1. Frank Romano and David Broudy, "An Investigation into Printing Industry Demographics—2009" RIT 2010
  2. Chris Faust, Paper Film and Foil Converter, Apr 1, 2003 12:00 PM, "Think Lean"
  3. Sandra Rothenberg PhD and Frank Cost, "Lean Manufacturing in small and mid-sized printers" RIT December 2004
  4. Frank Cost and Bret Daly, "Digital Integration and the lean manufacturing processes of US printing firms" RIT October 2003
  5. Frank Cost and Bret Daly, "Digital Integration and the lean manufacturing processes of US printing firms" RIT October 2003
  6. Michael Baker, "Lean Manufacturing Printing Industry", Lean Manufacturing Blog,

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