Improving Competitive Position Through Operational Efficiency:
Reducing Waste Through Improved Processes and Planning

THE CHALLENGE:
Our client, a printing company traditionally know for it's unique capabilities, high quality, and fast turnaround, was facing a dilemma.  As a premium manufacturer, they were not structured to react competitively to the increasing cost pressures in the marketplace.  Overcapacity in the industry was putting downward pressure on prices, and they were finding themselves unable to compete for new work with existing customers.  As a result, they were losing bids to competitors, which further exacerbated the excess capacity in the facility.  Facing an eroding base of customers in a shrinking industry, they need dramatic cost improvements, and needed them quickly.

THE PARTNERSHIP:
Analysis: A short diagnostic revealed the most dramatic area for cost improvement lay in waste reduction.  By its very nature, this business tended to have high waste levels, but our analysis revealed a significant opportunity resulting from an improvement in material utilization.  To capture this opportunity, they would need tools to manage material usage, a planning process focused on minimizing waste, and a tracking process to ensure these savings were captured.  The changes would affect nearly every area of the facility – from planning and purchasing, through production and inventory control.

Implementation Plan: The approach for the project followed three main streams of work.  First, the diagnostic group was transitioned into a tracking team, which was able to identify the largest areas of waste in the facility and begin weekly reporting of waste to the entire team.  Next, traditional notions of equipment capabilities were challenged in key areas to allow for more options when laying out a job.  As a result, job planners were able to take better advantages of the raw materials available to them and build less waste into the product from the onset.  Concurrently, a joint team of shop floor personnel and job planners began re-evaluation standards across the facility, and refining the standards used throughout the facility based on both past performance and a few key characteristics of the job.

Execution: The job planning team began seeing dramatic improvements very quickly; so much so that the rollout was expedited for other product lines to begin capturing savings more quickly.  Improvements in job standards were slower but steady, as standards were gradually modified to reflect true sustainable capabilities across the plant.  An overly aggressive production standard ran the risk of shorting a job, which in many cases would result in an expensive, low-volume rerunning of the job.  VertiSync worked day-to-day with the client teams for the first six weeks, gradually disengaging from the project until a full handoff was made at the three-month point.

THE RESULTS:
The implementation of the new tools and process had an immediate impact on material utilization, 80% of the annual savings were captured in the first three months, generating enough savings to position for cost-competitive bids without destroying margins.  From that point forward, improvement was more gradual, with material utilization inching forward from month to month.  Twelve months after the initial kickoff, the client teams had exceeded their goal by 20%, and was continuing to implement further waste reduction initiatives.