These two gentlemen represent a great event in a production shop. What really is the beginning of such powerful events? Oh, the event? The team had kept key equipment up and running and productive for 30 days with no vendor calls. Amazing. Especially considering the fact that prior to this the equipment required calls every 2-3 days for many years. They are holding an award for the historic event. Now, back to the question. What really is the beginning of such powerful events?
Think about why you need these events? A friend used to call them “Big Days”. Big Days build strength in an organization, overcome defiant obstacles, and release energy of the team in a positive manner that is brooding in a negative manner. For those reasons alone, you need to engage the next three points.
One: Get dissatisfied. Yes, that is the beginning of all great change. If you are comfortable and content, change is a threat. You must engage vision for the future with passion and be dissatisfied with the status quo.
Two: Spread your dissatisfaction. Now, you don’t need to get people upset over nothing. But if the people you are serving can’t get their jobs done or their product delivered or their services received on time, you need to get some partners in your dissatisfaction. Other managers, co-workers, staff, key customers, executives and others probably are already dissatisfied. Let them know you understand and listen to their view points.
Three: This is where real change starts. Pick a key point over which everyone is dissatisfied and attack it with passion and purpose. Dig for a root cause that will help everyone in the process. The theory of constraints explains that when you dig out a major point of constraint, you loosen up other constraints to become visible so they can be resolved. In other words, break the dam!
You will be amazed. This team went into overdrive for customer satisfaction when they found this one barrier to productivity resolved. They annihilated this bothersome downtime issue on key machines, developed new procedures for maintaining the equipment, gained independence from the vendor, improved production turnaround times, and improved the entire shop morale.
Just a thought today for those looking to do something good for themselves and those they serve.
Product 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.
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.
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.
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.
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.
Reviewing the cost power of in-plants is important for any executive wanting to make key decisions regarding cost and value and profits. Many make the mistake of simply categorizing in-plant production as a cost reduction or expense area. That can blow costs up in many other areas of the company. However, an inefficient in-plant that has not worked hard at value add may provide cost reduction after all. Unless, you work on the value add.
Profit leaders in commercial print plants keep Value Add at 65% or better. An In-Plant can do better. I’ve seen plants up to 85% where materials are not of high significance. Part of the problem is that corporations and organizations outside of manufacturing don’t get the concept. Even companies in manufacturing forget to apply costing and planning principles to individual departments that are applied to the entire company profit and value calculations.
What is Value Add?
Value Add is simple. Value Add is what your shop produces minus materials (paper, ink, plates) and minus what you shop out and outsource to others (mail list handling, large runs, design, etc…) When you shop out the work, you are not adding value for the client, the departments, or your business. Someone else is adding value. It devalues your overall business proposition.
Managers and executives, no one can do 100%. We need to measure today and work to move it above the 65% line. This is long term value for you as a business. You can be making profits off of this work and improving your single source provider influence in the mind of the customer. Customers want to go once place and get service from you, the provider that understands their needs.
So Where Can You Improve an In-Plant Service?
Simple. Ask the people sourcing work out of the company and organization.
Are there posters and banners and event collateral being serviced down the street for three times what could be produced in-house? Trust me, if you are doing these types of work and not enabling the in-house team with equipment to produce, you are losing money. It is costing you profits.
Is direct mail being serviced outside? Your in-plant should be working to integrate that into their digital offering. If your in-plant is already out-sourced, you should challenge the provider in this area.
Are you supporting online and variable print collateral across your organization? It is expensive out of house. A committed in-house or commercially provided in-plant can make that area work excellence for your organization.
What does your organization need?
Are you doing finishing at a secondary site and adding confusion, less reliability, and production lags in delivery? Think it through.
As an executive, you should be challenging the provider whether your in-plant is in-house or commercially provided. As an in-plant manager, you should be actively seeking product and services that build the value of the offerings to the business or organization.
Value Add builds business value, expands worker capability and contribution, and reduces production mix ups and lags due to outsourcing.
Next up? Product Optimization… a real place to get costs down and profits up.
Before we take a look into the six areas, let’s look at why these areas need addressed.
What is driving this fear of out of control print and media costs? What worries the executive? Pain points to the problem. It does not always point to the solution.
There is a valid fear among CFOs that continued dollar loss is unavoidable in print and related communications services. Studies show that in excess of 70% of CEOs distrust the marketing engine. The inability of marketing and communications areas to relate expenses back to profitable company growth stymies a financial analysis. Why settle for this? There are gains to be had. There are profits to be built and encouraged. The activity can be and should be measured with a hard look at Return on Marketing.
Another pain point is the threat of new media channels and mobilization demands. Marketers and executives alike tell analysts they are afraid they and their organizations do not understand what they need to know to adapt. They are thrashing and reading statistics of other attempts in similar organizations in disbelief and despair. What to do? Where to start? How much to spend? Will the long term value traditionally obtained through customer loyalty and persistency be affordable? How many channels of communication need to be engaged to be effective? Which will be life threatening if you don’t engage now even if the expense is unmanageable and lacks decent measurement points?
IT Collision Course
Add to those two the collision of IT and marketing that plagues most companies. IT has been the technology driver and owner of control of data assets. A continual emphasis on security and access and controls has made the information inaccessible and hard to understand for most marketers and communicators looking to take deep dives into segmentation and determine relevant categories of buyers on which to focus. Proliferation of disparate systems within most organizations means the data is not congruently analyzed. Add to that mess, the data was accumulated for operational purposes not for human communications and conversation and concern. It is dry and most times irrelevant. To work in the conversational communications of people to people in which marketing happens, the systems of accumulation and the intelligence behind them must be reworked. You cannot take a financial programmer and build a human sensitive interactive analyst. The change does not work in most instances. Certainly attempting to do it in the speed needed by marketing and communications and sales tasks most companies well beyond the capability of their human resources departments.
Late Adoption of New Media Marketing
Face it. You’ve waited too long. The competition is racing and working with new media and you just got your facebook presence online. It is static and not getting feedback from the right people. Forget about customers in this world. Focus on people. It is people that buy your products. And they are not talking to you. You have done something, but it is just not working. How do you leap frog over the inaction of the last few years when you should have been an early adopter?
Summary and Setup
If you agree with the dilemmas posed above, you know you have to do something about that massive print engine. It is a powerful tool in the Marketing 3.0 Blueprint. Trust me. All those other channels need print to bring them to life. That is one of the lies of the technology thought base. If you buy a lie in the beginning, you will suffer and suffer and suffer. Print is not gone. It is radically changed. It is interactive. It is humanized. It is responsive and direct and timed. It is focused and integrated. Using it in flat and traditional manners will get you decreasing return on your marketing and sales dollars. You need to optimize the engine and take quick advantage of the power of customization and integration of print media with other channels of communication. It is not cheaper to skip print. It is foolish. Neither is it smart to print like you have been printing. That won’t work. You need a new print engine that is dynamic, customized, interactive, data driven, communicative, and humanized.
We will begin to look at the six core areas that must be addressed in a print engine overhaul to build the powerful and competitive approach for your organization. You must.
Discussions with shops around the nation result in a few inevitables.
1. How do you get people to move forward?
2. How do you get other people to move forward?
That is a purposeful pun.
It really gets to be all about people in our efforts to change products and processes. Those changes always mean changes in people, projects and props (the tools and technologies). But the people are in the center of it all.
Product change means marketing and selling customers and investors. For an In Plant, they are the same. Customers are investors. They are the source of income and many times the only source. Sure, the CFO, COO, and CEO have strong opinions and input especially for transactional product lines. Yet, more and more effective print and distribution management for In Plants must engage the Marketing and Sales customers. That is high powered growth. Transactional has a high likelihood for being sourced and reduced significantly. You must move forward.
Process change is the same. Your highest sell is to your internal production teams. Next comes the customer. Many processes can be changed without engaging the customer. Yet, you need to ask yourself why you are doing changes if the customer does not benefit? They have an interest, even if it is just to know you are working on cost improvement or cost containment for them.
Prop changes are for the products and processes or they should not be done. Nuff said. You should not be retooling just to get the next fancy wangamahoochie. Technology must meet real business demand to go through the pain of change. Your production team must understand how the customer will benefit along with the product and the process. Your production team should improve skill and contribution and have more fun when you change technologies and tools.
Projects are what implement changes. Have them or die. A defined way to analyze, define, plan, implement, and optimize goes with every change. There are budget approvals and customer approvals and departmental approvals and worker approvals and self approvals and vendor approvals and IT approvals and on and on and on that must be planned and coordinated along the path to productive and prosperous change.
So people are involved in every step and every area of change. Those murky, hard to understand, mental, emotion, physical, and spiritual beings can make change heaven or hell.
Just for fun think of four types you will encounter.
Mundane Mary: The person will ask question after question. She will want to understand the universal and specific reasons for the change. Put her on the analysis team with a specific deadline. She might drive you insane, but she might find a hole in some plan that saves your hide.
Slap Happy Sam: The person will want to implement without a thought. Every day is an opportunity for a new party. He can get inclusion guaranteed as long as he is armed with a few facts to support his sales of you and the project. Make friends with him. Get him to understand how this change will improve happiness for someone.
Hard Ball Bart: Whew.. he will want profitability or cost reduction. This guy is important. He will make you justify in the right manners. Convince him. Do your homework.
Amiable Amy: She just want to get along. So make sure she is on the implementation and training track. She will work until it works for everyone else.
This is a blog not a book. So I am ending here. Just some thoughts to stir you up on the path to progress.