Print Manager - Graphic Monthly Canada

August 2010

Take control: a strategic plan for turning your business around

This series devoted to re-invigorating a business, reversing business fortunes and setting out a roadmap for going forward.

PART 2

Develop a lean machine

Last issue we looked at the first step required to improve business fortunes: getting costs under control and protecting your cash. The next step is to develop a very lean machine. I don’t suggest that you start implementing lean and Six Sigma strategies, but that you trim the excess out of your operation and make it a lean (no fat) business. You should be looking at everything to confirm values and always be on the lookout for processes, no matter how small, that could be more efficient, re-engineered or eliminated. You’re still in survival mode so you should be obsessed with conserving cash and driving costs out of the business. Here’s what you should look at.

Get billings in order On the invoicing side, Gary Eaton, director or operations at U.S.-based manufacturer Kontron, suggests auditing the process to make sure money isn’t being left on the table. It’s not uncommon to have discounts misapplied or to discover that system overrides have never been removed. As well, if it’s a complicated manual billing process, staff may not be doing it correctly, and you may not be billing for everything. Double and triple check that your system readily identifies chargeable customer extras and that those charges make their way to your billing system quickly.Mark Smith, owner of Direct Impressions in Richmond, Virginia, suggests that “Billing must be immediate upon shipping.” There are so many reasons for this but the biggest is to get cash in. I know this one sounds obvious, but you’d be surprised how often getting the bill out tends to be the last thing that gets done. Be careful that you don’t become one of those owners who insist on costing a job before you bill it. If you have to wait for costing to see what you should be billing then you’re already in trouble
Drive down costs Over the past couple of years we’ve seen firms tackle many strategies to drive costs down. The tactics you should look at include diversifying how you use your warehouse space, implementing work-share programs to keep staff employed, shifting skilled employees to lower skilled jobs to keep them on board, and innovating as much as possible. The advantages of innovation and diversification are never more evident than in a soft economy, especially if businesses are diversified in a way that can smooth the peaks and valleys.
Kris Bovay, general manager of Pacific Bindery Services (PBS) in Vancouver explains how she approaches the issue: “A trade bindery’s core business is doing overflow work for printers. During slow periods, there is not much need for overflow support, so as a trade bindery, PBS understood the need to diversify and has added services that many printers do not handle in-house, such as perfect binding; lay-flat binding; polyurethane reactive gluing; remoist gluing; fulfillment and kitting; and warehousing and storage. Adding these services provided new markets and appeals to more customers.”
If you’re moving to a continuous improvement plan, Ian Mulligan, continuous improvement leader at Supremex in Toronto, cautions that, “In today’s ever changing print market it’s essential to react to shorter lead times, smaller runs, and decreasing margins. It doesn’t matter what size business you are running, if you have processes and people, you can improve upon them.”
Develop flexibility As you continue getting your business in order, you’ve got to build a more flexible business model. The economic model of staffing for your peak times isn’t sustainable, so you should staff for average volumes and then outsource production as needed. Have some kind of flexible labour structure in place, and utilize part-time workers for the peaks. Vikram Lal, president, Western U.S. and Canada for Toronto’s Metro Label Group, wrote to me and suggested that “A. When internal expertise is lacking, use qualified consultants. B. Partner with suppliers to bring about quality and productivity improvements. C. Build a network of partners who can help grow your top line.”
Scott Pelly, account manager at Generation Printing in Vancouver, has a simple turnaround solution. “What clients have been wanting for print has been changing quickly over the last few years. Quicker turnaround, fast response times, competitive pricing, new technology etc. To continue plodding along just doing things the same as before will lead to obsolescence.”

Next time: How to fire your worst clients

Lorne Patterson saw managing director of Bowne's financiak printing operations across Canada. Since 2006, he has been a consulant to the printing industry. He lives in Vancouver, but heads to his second home in Puerto Vallarta whenever he can. Reach him at www.pattersonplus.ca