Business Management - Productivity/Process Improvement

Production standards are predictions of the amount of time and materials required for a form or job for purchasing, estimating, pricing and scheduling. Predictability is essential for process management of printing. Is the process of printing so nearly chaotic that time and materials can be forecast no better than next week's weather? Or can production time and materials be predictable—at least within ranges? The Central Limit Theorem (CLT) of statistics tells us that the averages of a group of individual samples will be approximately "normally" distributed. (CLT is the theory used by Deming/Shewhart in charting control limits for product variances.) For printing it

Peter Doyle of Action Printing in Fond du Lac, WI, and I have concluded that printers use job costing simply for the purpose of pricing jobs. Most don't do post-production variance analysis or compare actual results with estimates. Nor do they do any variance analysis comparing actual job costs with General Ledger results. If they did, the variances would be devastating. Maybe they did so a time or two in the past but, because we're so frustrated by the differences, they just toss a dust cover over that "elephant in the living room." So why do we persist in using job cost estimates

BY MICHAEL RODRIGUEZ Over the last quarter century Specifications for Web Offset Publications, or SWOP (www.swop.org), has become a major factor in the success of the publication industry in the United States and a widely recognized acronym around the world. This has been accomplished in a diverse business and technical environment by means of reasonable specifications put forth by a group of dedicated volunteers. These volunteers understand that the printing industry is a manufacturing business which, like other manufacturers, can streamline its production process when the input of information is standardized. SWOP specifications help everyone in the production chain—from advertisers to prepress

Commercial printers convert paper for customers for many types of jobs: books, pamphlets, newspapers, business forms, catalogs, lists, leaflets, magazines, posters, bibles, hymnals, greeting cards, programs, calendars, albums. There are thousands of printers throughout the world, from Helsinki to Auckland, from Vladivostok to Capetown, from Beirut to Hong Kong. No two print jobs are identical, no two print shops are the same, and the needs of no two print customers are exact counterparts. The basic economic problem of printers is pricing their conversion service for hundreds of different jobs using technology that is shifting—even as we write. Price is what customers will

Profit Leaders in the PIA (Printing Industries of America) Ratio Studies for the Year 2000 were the top one-fourth of 785 printing firms reporting. In this upper quartile were 198 companies with the highest reported profits for the year. The remaining 587 companies were the lower three-fourths of the total. It may, or may not, be a "representative" sample since the 785 reporting companies weren't randomly selected. But we do have a large enough group of companies to be deserving of comment and study. The table shows the key figures. ItemAll FirmsUpperQuartileLower 3Quartiles Sales100.00%100.00%100.00% Materials/DOAs35.97%35.72%36.22% VA/Contribution64.03%64.28%63.78% Oper. Expense56.46%49.36%63.56% EBITDA7.57%14.92%0.22% Number of Firms785198587

A few weeks ago I asked for an annual sales summary from Fictitious Press, a printing company. I wanted to see how the sales stacked up account-by-account for the year—to do some internal benchmarking. What I received was an ugly dot matrix printout with neither dollar signs for currency nor percent signs for ratios. Each account was on two lines, making it difficult to read the columns vertically. There were fields for sales, value added, margin and percent margin. The 365 accounts were listed alphabetically by company name. There were no product-type classifications for the accounts or salesperson designations. The report was

I have a truck with a load capacity of 1,000 melons. There's an area near the Mexican border where they grow the most delicious honeydews you've ever tasted. In addition to my truck I have $1,000 in free cash. Being an entrepreneur, I drive my truck to that border spot and buy a thousand melons from the farmers for a dollar a piece. I head straight to Phoenix where I sell the honeydews to the wholesaler for $1.50 each. I've just made $500 gross profit. But the trip cost me $250 for expenses. So I netted $250 on my free cash in two

Ordinarily I receive an e-mail response or two to my scribblings here, sometimes none at all. But my column in January must have touched a nerve. It was headlined by the editor, "Goodbye Job Cost Accountancy." Half a dozen readers posted e-mails, one from as far away as South Africa. Printing Impressions is demonstrably an international journal. I've had postings from Birmingham, UK, and Beirut, Lebanon, just in the past weeks. The monthly database I keep for web printers has included firms in Austria, Canada, Australia and Sweden. Yes, it is a small world growing smaller by the hour with the reach

Productivity increase is credited as the factor that has made the economy of this country so buoyant for the past decade. The rate of annual productivity increase has far exceeded expectations. It's created billions of dollars in national budget surpluses. By developing an information base from new technology and taking the oftentimes-painful actions mandated by that information, we've succeeded in the transition from a manufacturing to a knowledge economy. We've downsized, outsourced and become increasingly efficient based on information. Our printing industry, however, hasn't really participated in this new, knowledge-driven approach to increasing productivity. Why is that? Why have we lagged behind?

The health services industry has an error record worse than printing. But they bury their mistakes, while much of the time we must redo and remake our boo-boos. In commercial printing, in common with medicine, we have millions of customers with an amazing array of demands. And we also have thousands of practitioners. Communication of customer/patient needs and demands, the raw materials, equipment, training, technologies, interpretations and complexities are almost beyond the grasp of mortal printers and physicians. It's an environment that breeds mistakes and dissatisfactions. Both industries seek to throw a dust cover over this elephant in the living room and