Skip to content

Product Optimization: Six Core Area For In-Plant Cost Optimization for Executives

December 14, 2012

ImageProduct Optimization: Six Core Area For In-Plant Cost Optimization for Executives

Design is the fundamental soul of a man-made creation that ends up expressing itself in successive outer layers of the product or service.  Steve Jobs

Love the Product.  Love the Customer.  Love Each Other.  Phil Larson

That mantra has served me well for decades.  Loving your products and services builds professionalism and excellence into all you and your team produce.  Loving your customer causes you to find inventive ways to serve.  You listen and adapt to their needs.  Loving the other members of your production team causes you to believe in them and work to see them grow.  It works together.

Ingenuity inside a performing enterprise takes dedication to the voice of the customer in product optimization. 

One shop had worked for years on shifting priorities of several companies.  A particular product needed in a particular manner eluded their capabilities. Both the people in the company needing service and the people in production were stumped.  Eventually, a bright-minded setup tech invented a plan.  With some modifications in production and some workflow adaptation in order intake and online systems, the product was brought successfully into plant production.  The department saved thousands of dollars a month and reduced lag times on orders.  They also moved from a static mode to a dynamic mode.  They also eliminated the need for a complete position and the person in that position moved up into a higher contributing spot.  What a win-win-win-win!  The production team loved servicing the product line and it filled in for a dropped product line.

Product Optimization is getting the right product mix that is profitable and fit to the location, equipment, and people.  Make it important.  Pricing has to be right.  Prioritization has to be right.  Process has to be right.  Effective turnaround on the products that are bread and butter and keep the shop running day to day has to be protected.

Let’s look at those components of product optimization.

Props: Tools and Technologies

Adding a new product or service can entail huge shifts in people skill base.  There has to be time to build the new skills and knowledge.  Plan it in.  Make sure your budget planning includes expanding tools and technologies and integrating training across teams ahead of product launch.

When implementing UV coating, it became apparent it was not as simple as we thought.  Finishing techs were excellent at folding, perfing, bookmaking and other areas.  UV is almost an art of temperature, paper type, speed , thickness, machine, and coating.  It is certainly a craft where skill, expertise, and art combine.  There were many trials and errors before we could brag about capability.  However, once launched, the demand was continual.

Pricing

Custom work means custom pricing.  Many in-plants are not set up for custom anything.  People who have used the service are used to pay per piece or pay per page or pay for nothing just make the budget work.  That can be limiting when products and services need to be customized for one area though not all need them.  Budgeted hourly rates, production turns, machine setups, people time in workflow, and supplies all have to be put into pricing calculators to then match to market bearing numbers.  This is tough work and necessary.  No one can operate on cost alone.  A fully loaded cost contains many factors including profit.  Profit for an in-plant means allocated dollars for increasing equipment and skill training to always improve for the people you serve.

Pricing reflects value.  Value reflects dignity.  Dignity reflects ownership.  Ownership makes for great results.

A client was ready for custom one-off book production.  Anyone who has ordered a photo book online understands the high dollars charged.  This client balked at even a low charge.  Entitlement thinking had prepped them for simply not having to pay any extra for custom, labor intensive work.  Negotiation and clear-headed thinking prevailed and a new product was co-invented for the client that revolutionized sales results for one company.  The sales teams received access to custom proposals in high quality book form that set them in much higher esteem with prospects.  A simple pricing negotiation between the in-plant and the creative released power for an entire sales team.

Prioritization

Every shop has a mix of people served.  Every business unit served and every department has different business demands and workflows that have to be met and matched.  This balance keeps the symbiotic excellence for a performing enterprise that is so necessary for complete productivity.   New product and altered product requires prioritization changes communicated at every step of the process.

Blow out of your mind the thought of levels of the process when considering priority.  Thinking of levels of people will get you in trouble.  Every person in the process chain needs to understand prioritization of performance in relation to the other items on which they work not “the president wants this right now”.   That form of prioritization is surely necessary at times and managers have to adjust to make it happen while keeping the flow of all the business considered.  An open channel for emergencies has to be in place.  But, the normal flow of product and service has to have a regular prioritization all can understand.

Process

An in-plant with good service means a busy in-plant.  Move one item and five others are affected.  In one plant, we had over 250 steps for each print order.  From file prep to print to finish to distribute to allocate $$, it all had to be done and communicated.

This is a good place to make a note about humanizing services.  A great lesson for me was finding a way to allow the people we served to look into our processes without turning control over to them.  One person loved to walk up to the production team and shift their priorities either through smoozing or scowling.  Neither helped anyone.  I’ll never forget a twenty year professional broken down in my office, nerves shot, and eyes red from trying to serve this person.  The person needed influence, but not in the middle of production processes.  We altered our customer service approaches to be more inclusive of them and others along with spending time communicating our process methodologies.  The interruptive visits went away.

Protection

Our votes(decisions) must go together with our guns (force of need). After all, any vote we shall have, shall have been the product of the gun. The gun which produces the vote should remain its security officer – its guarantor. The people’s votes and the people’s guns are always inseparable twins.  Robert Mugabe

Executives and directors, I encourage you to protect what you value.     You don’t have to pull out a gun to protect prior decisions, but you certainly should think protection.  Decisions have been made with great thought and foresight.  There was force of need that implemented past decisions and force of need that makes new ones.  When you implement change, you need to address protecting prior decisions so the team understands value of loyalty and service.  Otherwise you look petty and political and might make some costly mistakes.

Okay, that is enough thinking on this subject.  The online book can give you more insights.

Next up will be online support and pdf workflow optimization.  If you have an in-plant, Mr/Mrs/Ms  Executive, you must make this happen.

Responsibility and Sustainability

Pain Points

Removing Workflow Constraints

Profitable Cost Reduction

Value Add

Advertisements
Leave a Comment

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: