Re-shaping the future of Thomson Press

Ramu Ramanathan (RR): To begin with what is the update on the manufacturing unit in Airoli?
C J Jasawala (CJJ): We set up an export-oriented plant at Airoli in Mumbai in 2006. Being a port city it is easy to export from Airoli. We planned to shift our entire export operations to Airoli unit from other plants in the North. The set-up including the equipment were to primarily cater to the export market. We reached a turnover of Rs 100-crore in Airoli within three years. Unfortunately, the strike by the workers pushed us into a corner. After a year, the strike was withdrawn, but by then we lost key customers.

RR: What type of key customers?
CJJ: These customers were from abroad. These were customers who demanded stability and reliability. Although back-up was provided from Thomson’s NCR facility, we could not retain all those customers. The strike also affected the retention of skilled personnel on the shop-floor. It will take time to fill the vacancies and our capacities. The strike has been withdrawn some months ago and it will take time to recover customer accounts. We need to handle this with patience.

RR: Thomson has shifted the Goss M-600 and the Acoro perfect binder from Mumbai to Faridabad. It sent a negative signal to the market...
CJJ: Even before the strike by workmen, we were consolidating our facilities at NCR. We were in the process of shifting the Goss M-600 from Airoli to our mother plant in Faridabad, which required an upgrade on the technology front. At the time of the installation of the Goss at Airoli, we had a plan for a second Goss at Faridabad. During the global recession in 2008, the magazine publishing business took a dip. The growth rates prior to 2006-07, slowed after 2008. In order to rationalise our capacities we shifted the Goss from Airoli to Faridabad. So, the transfer of Goss had no connection with Airoli hurdles. We also shifted an Acoro perfect binder to Faridabad.

RR: Today, which kit operates at the Airoli plant?
CJJ: Around 65% machines of the total investment at Airoli plant, are still in place. This includes the hard-case line, soft case bindery unit, three webs and sheetfed printing presses.

RR: We have been speaking to four major print firms from all over India. What would be your advice?
CJJ: If you speak of the advantages, the stable power supply in Greater Mumbai is a huge benefit. At Faridabad we use diesel generators for 50% of our power consumption and it costs twice as much compared to state electricity power charges. The other advantage is that the infrastructure at Airoli is meant for print firms targeting exports. Being a port city we saved two weeks in terms of imported material going and returning to the port in the form of finished goods. This is a big plus for an overseas customer who insists on timely deliveries, and quick turnaround of jobs.

RR: And the disadvantages ...
CJJ: The disadvantages include labour and employee costs. It is 25% higher than NCR because of higher minimum wages in Maharashtra. Cost for employees like engineers and diploma holders is 50% higher than NCR. While Navi Mumbai has a good domestic market, NCR is ahead because it is the centre of magazine and book publishing.

RR: What about the labour situation in Navi Mumbai? We hear bizarre stories of militancy and political posturing.
CJJ: I would not say that there was any political interference but whatever happened has left a bad impression. The external trade union leadership we faced appeared unreasonable and confrontationist. It ended up destroying a productive asset and led to loss of faith in the investor.  There is no reason for that kind of behaviour from the union leaders – although they might have their own justification. It affected us a lot because apart from our investment of
Rs 150-crore being rendered a waste, it left a wrong impression on our overseas and domestic customers. The strike did no good for the workmen either.
 
RR: The first book that Thomson produced was a Bible. The Mumbai plant was dedicated to printing of Bibles. Thomson has the capability to print 28 gsm paper for Bible printing, one of the first who did it...
CJJ: True. Bible printing was especially dedicated to Mumbai plant and the strike hurt our business irreparably. Making high-quality Bibles is not an easy task and that’s why very few printers around the world could do that. We invested in specially designed webs with folder at Airoli. The equipment to print and manufacture Bibles still exists but is under-utilised in Mumbai. That is a big loss for us. We were among the top five Bibles printers in the world and it was a huge competitive advantage for us. Just before the strike we produced two-million Bibles in a year. We got prestigious orders from Europe, USA, South America and Korea.  We were planning to scale up our capability further. The prolonged strike led to skilled employees and our customers deserting us. This is our misfortune. Bibles production was a difficult and expensive learning curve. Thomson had acquired skills not just for printing on thin paper but even the binding of Bibles which is complex with a range of covering materials that include paper, covering material, the special effects of embossing, foiling guilding and stitching. We invested two years in learning how to make good Bibles, and we were among the best.

RR: Has Thomson exited from Bible printing?
CJJ: We still do Bible printing at Faridabad, although not the same volumes. It is now done on sheetfed machines.  We were doing 80% of our Bibles on web offset printing presses in Airoli.

RR: Thomson manufactured Bibles for less than a dollar?
CJJ: Yes. There’s a chance that you will come across a Thomson Press printed economy Bible across hotels and homes in Europe, USA and South America.

RR: Diaries is the other big export market for you?
CJJ: We were doing seven-million diaries a year in exports to UK and Europe. As the Mumbai plant went under, our exports came down. We have seen a downfall in exports. We were doing around Rs 70-crore of export jobs. Export of diaries and books will continue, as we have the equipment and skill-sets in our NCR units.

RR: Tell us about your pet project: The Theory of Constraints (TOC) by Eliyahu M Goldratt.
CJJ: The challenges and threats to Thomson Press call for radical initiatives. I believe that TOC is the best way forward.  Most organisations follow Total Quality Management (TQM), LEAN and other good manufacturing practices. They restrict the scope of improvement to the factories. TOC on the other hand is a strategic imperative that will provide us with a “decisive competitive edge” with our customers and lead to a profitable future. The change programme will extend itself across the value chain – from vendors and suppliers right up to customers and users of our products.

RR:  What does TOC aim to achieve?
CJJ: TOC believes in exceeding customer expectations,  primarily delivering “On time in full” (OTIF) with good quality. And, we need to ensure this 99.9% of the time. Thomson Press is building this capability to become the most reliable supplier of print work.

RR: In what way?
CJJ: Our manufacturing operations are subject to uncertainties and risks. Uncertainties like customers delaying inputs and changing quantities. Vendors delaying supplies, their material getting rejected on arrival or requiring re-work. Machines will break down, absenteeism will occur. They create risk of failure in meeting commitments to customers. We are setting new ways of working by way of policies, processes, measures and behaviours, that will manage uncertainties and yet deliver to customer requirements, without compromising on quality. Our objective is to stabilise the manufacturing process inspite of these events.

RR: Have you achieved this at Thomson Press?
CJJ: Not yet. But we are moving in that direction and will achieve considerable success over the next six months.

RR: How so?
CJJ: As I said the organisation is transforming itself. Departmental and functional silos are being pulled down. “You v/s me” will change to “ You and me v/s the problem”.  Our confidence in ensuring reliability must be such that Thomson Press offers a penalty to customers if we fail in our promise. That is the ultimate capability we aspire to derive. Making unrefusable offers to customers based upon a strong and stable manufacturing capability. This will set us apart from competition. Today our competitors can purchase the best of raw material, the latest technology and equipment. But the competencies that Thomson Press will build within itself, will be difficult for others to copy and follow.

RR: What happened to the earlier improvement program which you initiated?
CJJ: Over the last three years we have firmly ingrained practices like 5S, autonomous maintenance as well as working in cross-functional teams, in order to propel the organisation on the path of continuous improvement. We successfully completed over one hundred projects to cut cost, improve safety, increase production and productivity and enhance quality. Employee participation from every workman is now a way of life. TOC will build on this culture and bring significant gains in customer satisfaction at a faster pace, in shorter time.

RR: Thomson conducted a survey...
CJJ: Oh yes, using an expert third party consultant, we did a “customer satisfaction survey” four years ago. The objective was to compare Thomson’s capabilities vis-a-vis competition in the eyes of customer. The results were revealing. Customers across segments greatly appreciated our quality and technology. But equally, they expressed the need for Thomson to improve on our reliability. It is this need of our customers, that our current initiative will fulfill.

RR: You have implemented TOC since the last six months. Tell us about the process.
CJJ: It helps every individual in the organisation to stay focused on the global measure and goal of achieving “On time in full”, 99.9%. TOC also teaches us that the capacity of an organisation is not the sum total of its equipment but limited by the constraint resource equipment in the supply chain. So we will constantly try to maximise the flow of production through the constraint resource. We will focus on TQM techniques learnt four years ago on our capacity constraint resource. There are several other practices like full kit, release control, buffer management, etc that are at the root of our change programme. Above all, it will change mindset and attitudes of all employees. Beliefs and value system will change.

RR: Mr Jassawalla, how did you meet Goldratt?
CJJ: The late Liyahu Goldratt was a doctorate in physics who shifted his focus on improving business results. He was an outstanding management thinker and a prolific author. I read his book The Goal, ten years ago. I particularly liked the simplicity of the ideas and enormity of the change they could bring about when implemented. So when he came to India three years ago to conduct a workshop on Theory of Constraints,  I could not resist attending it. One thing led to another and today Thomson Press is implementing Goldratt’s Viable Vision, to make us an ever flourishing company.

RR:  Is it really that simple?
CJJ:  Not at all. One must never confuse simplicity, with being easy to implement. In fact the more simple things are, the more difficult they are to follow. It is simple knowledge that after crossing 50 years, we must exercise to remain fit. Yet, how many of us go for a morning walk or follow a proper diet? The simplicity of associating smoking with cancer cannot be over-emphasised. Yet, how easy is it to give up smoking? However when these simple rules are actually practiced, lives change, and organisations transform. Another key learning is that “Planning is priceless, Plans are useless”.

RR:  What does this imply?
CJJ: This implies that planning cannot be left to juniors and planners. It is a social process that must include the implicit and explicit knowledge of experienced seniors. Therefore, the plan has far greater value. In fact when implemented, it will deliver superior results.

RR: Where do you see Thomson Press in 2013?
CJJ: When Thomson Press gains these capabilities we will not only be the preferred supplier to our customers, we will also be a more profitable operation.

RR: You were labeled as an outsider when you joined Thomson from Voltas. How has the print journey been?
CJJ:  My first six months in Thomson were revealing. The vocabulary and the terms used by printers was unique to this industry. I quickly realised that I had a great team of technically qualified people in Thomson Press. Each of them were experts in their field. My task therefore was not to improve printing capability. My approach was to look at strategy, customer focus, team building, result orientation and improving communication within this large organisation. We brought in new practices and implemented TQM and Kaizen across the factories. Today we are working to make Thomson Press “future ready”. This includes re-visiting our vision, our values and our medium-term strategy. We have a lot of developments in IT implementation in progress on the shopfloor and in other business processes. Improving people competencies and enhancing organisation capabilities will continue to occupy centre stage.  

RR: Are the other industries as unstructured as print?
CJJ: One surprising element in the print industry is the vendors, particularly paper suppliers exert and demonstrate greater power than the buyer/printer. In most industries, the customer is king when it comes to sourcing from suppliers. But in the printing industry this balance is tilted in favour of suppliers.

RR: What is the counter-strategy to this?
CJJ: We derisk the outcome of this imbalance through alternate vendors, often developing and supporting smaller players to raise their standards, indigenising imported spares, developing our own strong maintenance and engineering teams,  so that we don’t rely entirely on the original equipment manufacturers.

RR: You said “future ready”. Is Thomson “future ready”?
CJJ: Thomson will be a lot more capable of taking on changes in business cycles. We’ll meet the ever-demanding customer requirements one year down the line. However, it will remain a constant struggle to continuously innovate and adapt to the market forces. In fact, challenges will become more difficult in subsequent years. Let me give an analogy of climbing Mount Everest.  We cannot reach it in the first attempt. We will first learn to climb smaller peaks and then raise our standards and our goals till we are capable of reaching the summit. We will need to remain agile at all times and once the organisation realises its full potential, we intend to stay ahead of the pack. The future is not entirely predictable. Uncertainties and risks will remain. My objective is that Thomson Press deals with it in a far better manner than its competitors and comes out a winner again and again. A winner in the eyes of our chosen customers and stakeholders. 

(Additional inputs from Samir Lukka and Rahul Kumar of PrintWeek India)