Opportunities and challenges in print: the CDC way

CDC and I have seen a major transformation in the last three years.

First, our profits have increased anywhere between 50 to 100% year-on-year. We have had a consistent rise in profit from 2018-2019, the peak Covid year of 2020 notwithstanding.

And my daily routine has changed drastically. Earlier, I would visit the factory every day, but now, I rarely do so.

Earlier, I used to be the guy who goes to the factory every day. That’s what we love, right? Also probably, that’s the easiest thing to do. We go to the factory and wait for team members to come running to us with their crazy problems. We start the discussion with, why are you not able to resolve this by yourself, and then we wear our superman, iron man suits and offer the solutions. Most of the time, our solutions work, and we feel supercharged like we are some true superheroes. And we go home happy and tell our wives, oh, I am so tired from work. There were so many issues and we had to solve them all. What wonderful businessmen we are! Even during holidays, when you are sipping your coffee, or juices, or whatever by the pool, you would get phone calls from work and again the same routine.

Now, since October, for the last 150 days or so, I have probably gone to the factory maximum for 7 to 10 days. In fact, there have been periods of 30-35 days where I did not go to the factory at all.

At the same time, our on-time delivery has been around 85-95% week-on-week every week.

Meanwhile, our wastage (including internal rejections) is absolutely under control. The overall wastage is between 2-3%. Our average run length in packaging is around 4,500 sheets. And, we won the PrintWeek Awards – in the educational books category.

How did we achieve this?
Right after the lockdown, the entire world went gaga over digital transformation, and how Covid-19 has changed the way we work. The printing industry was no exception. We started hearing how automation is essential to cut costs, how it is impossible to survive without ERP, and how Industry 4.0 is the future.

But I have slightly different views on these subjects. Not that I have anything against these technologies, but I feel that spending money on these technologies alone cannot solve our problems.

Dealing with ERP
The primary goal of any operation is to ensure that there is a smooth flow from receiving the customer order to the final dispatch. But if we were to walk into most printing plants, we would see massive WIP materials waiting to be processed by the many work centres. The only reason we do not have more WIP is the lack of space.

The customer order spends most of the time waiting in front of the resources rather than being processed. There is a continuous traffic jam inside the plant. The supervisors are always shifting priorities depending on which customer servicing team is shouting more.

ERP is supposed to be tackling this problem for us. But ERPs have absolutely no answer for this. Whether it is SAP, Microsoft or anything else. They have absolutely no clue. They are currently digitising all the paper formats that we have been maintaining for ages, such as job registers, production registers, and so on. This can be done through spreadsheets as well. ERP currently only seems like Excel on steroids.
When a customer calls and asks the servicing team if they have this job, when can it be delivered, or that they need the job in three days and if the printer can do it, can our ERPs tell us instantly whether you can execute it or if you execute it, how many other jobs will miss their promised deadline, or if we can you afford to do it?

The simple answer is, no.

Some printers might have figured out a solution for these problems. But if you ask them, it is not because of the ERP. They used ERP as a building block to get these answers. For them using any ERP or a spreadsheet could have resulted in the same.

Dealing with automation
In the previous example, we saw how the jobs are spending less than 10% of their time being processed. Most of the time is spent waiting in traffic jams or stuck because something or the other is not available.
Manufacturers say that by using automation, you can save 20-30 minutes of time. Do we really believe that these 20 extra minutes are going to make any difference? On the contrary, to utilise the new automated machines that we have purchased, we make it run at full speed only to increase the traffic jams and create a bigger mess.

Also, some claim that automation can save on labour costs. All of us have at some point added automated machines. But have we ever fired an employee because of this? On the contrary, often, we have to hire qualified and well paid people to run these automated machines. In this context, where is the saving? We have actually increased costs by adding high salaried people to the team.

Dealing with Industry 4.0
These manufacturers have put a lot of sensors in our machines that send data regarding vibrations/ temperature and several other parameters, including productivity to their central system. Analysing this big data, they can understand which parts are going to fail and thus help us with predictive maintenance. The reality is, we printers are constantly stuck with breakdowns and breakdown maintenance. Effective preventive maintenance that ensures almost no breakdown is a thing of dreams for us. How on earth does predictive maintenance make a significant impact? The same way, when these IT systems do not perform what they are supposed to do sitting at our offices, how can we expect that cloud computing is going to solve our problems?

The CDC approach
At CDC, the first thing we did was to ensure that our printing machines are always the bottleneck in the factory. What this essentially means is every other process before and after printing should be faster than printing, at all times. Line balancing is a myth. They should not balance the printing capability. They should be faster. This means that many times all other operations will remain idle. This is difficult for us to understand, but this is non-negotiable. Imagine a plant where binderies/punching/pasting machines are sometimes sitting idle. People have nothing to work upon. This might lead some management people to start looking at firing people, but it gives me immense satisfaction in such a scenario.  

We have designed our entire approach with this pillar of truth.

All businesses in the world is composed of different processes. All processes should have these five steps: CARMA — create, align, roll out, measure, and accountability.

We are all experts in creation. It is only the next four areas where some of us fail and blame our failure on external factors, such as people, government, competition, clients, and so on, whereas our success truly and only depends on CARMA.

Some of the processes that we have developed and are going to discuss today are — order-taking and processing; new product development; pre-press as a process; production system; customer portal and exception handling.

Order-taking process
Once one of our sales managers gets an order, they hand it over to an internal CRM team, and they get cut off from the job. They can now focus on getting newer orders rather than focus on fulfilling this particular order. The CRM team has to promise a delivery date within 48 hours. The delivery date is very easily computed. They sit with the production coordinator who has full information on the load of the different machines and raw material availability or expectancy.

With this information, they schedule the job in the ERP. ERP knows the steps required after printing for any job and computes based on when the job is getting printed and the post-printing steps and the expected delivery date.

This is just plain math and there is no complexity involved. The CRM team simply forwards the date as calculated by the system to the customer. They also intimate the material ready status one day prior and materials are delivered by the next day. This is done automatically through email and WhatsApp in an automated manner from our system. This gives us the measurement of how well the CRM team is performing, and whether the messages are indeed going or not and more importantly, on time. (See Graph-1 )

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New product development
Now, this is the most painful process in the packaging in a traditional system. We have a separate executive for new product development (NPD). Any request for NPD is given by the sales team to the NPD executives in a systematic manner and each request, depending on the nature of development (PDF approval/ digital print /Epson proof /machine Proof /blank structure design) comes with a set TAT.

The NPD executive’s KRA is to ensure that the job is completed within the TAT. (See Graph-2)

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The above image shows the list of pending jobs for NPD. He simply has to follow the order. (See Graph-3)

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This is how his work is measured and he is made accountable. Week-on-week, he is able to check his progress and work on self-improvement. This also helps us in either deciding to change TAT or adding manpower to ensure at least 85% of work is done on time. With this approach, we managed to develop more than 2,800 different SKUs in the last three years.

Pre-press
Pre-press is the brain of the entire print operation. Any error at this stage cannot be fixed at a later stage. We have always had different sales executives or someone or the other always pressurising the pre-press team leading to errors and a lack of focus. This has now changed to a simple token system. For every pre-press activity, a simple token is generated and our pre-press team of eight-nine members work based on their dashboard. The system is similar to that of passport offices across India.
(See Graph-4)

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Here we can see the jobs which took more time to get started from the point the token was generated or even jobs which took more time to be completed. This has made our pre-press super smooth, with no khich pich (uncluttered).  (See Graph-5)

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Production system
It is the most crucial system for any manufacturing process.

Now, since our printing systems are the bottlenecks, the only area where priority has to be managed is printing. The underlying principle is whatever gets printed first will get processed first. So, all the supervisors of different departments need not reshuffle the priorities of their workstations and work as per the print schedule. (See Graph-6)

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If we take a look at the jobs pending for printing on the ERP system, we immediately know what jobs may get delayed since the estimated delivery date is computed based on print ETA. The red highlighted cells indicate that these jobs may miss the delivery date. (See Graph-7)

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This small image shows pending printed jobs against each process along with their estimated completion time. The cells in red have not been processed as per schedule. You can see it is so remarkably simple to get a bird’s eye view of the entire plant making the job of follow-up extremely simple. Before a customer raises the issue of delay, it gets highlighted at the earliest, and we can take necessary action to fix the same or intimate customer firsthand in case of unavoidable circumstances. (See Graph-8)

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This is what the scorecard of CDC indicating the percentage of jobs delivered on time looks like.

Customer portal
This is the customer portal that I have developed. Here customers can see the current job status, promised delivery date, previously ordered jobs, and details of individual SKU, including order history. The QC reports are also soon going to be integrated with this portal. (See Graph-9)

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Exception handling
Our plant head/ production head, or whatever you want to call them, only takes care of the exceptions, which are easily visible, and takes necessary actions. Which is again measured as per the number of exceptions raised and exceptions fixed on time. Since his primary KRA is to take care of the exceptions and not ensure jobs are being delivered on time, he does an excellent job and rarely do the exceptions come to me. Our discussion is primarily based on what changes we should do in our processes to reduce exceptions that are being raised from the operations — based on the bird’s eye view, where should we plan new machines or manpower to streamline the flow of materials.

Now, since printing is the bottleneck, it is crucial that we get the maximum output from our printing machines. An hour lost in the bottleneck is an hour lost from the entire factory. It does not matter if any non-bottleneck process is idle. But if the printing machine is staying idle, it means we are failing somewhere. (See Graph-10)

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This is the print productivity index.

There is a simple measure for this as well.

Based on a simple matrix, we have created a productivity tool which shows the previous day’s productivity based on factors such as the number of job changes, the number of plates on primary colours, the number of plates of special colour used, and so on. Just by looking at the colours of productivity cells, we can easily figure out the productivity of the plant.

Simply getting these figures can ensure that the plant is healthy. As all of these are visible to each person accountable for their processes.

Conclusion
With the above systems in place, the entire globe is your playground. We are not bogged down by the smaller details. Our vision broadens. We can finally think like startups. Manufacturing is the least of their concerns. Sales, marketing and strategy are what they focus on. Having a good grasp over the creation of processes and ensuring they run smoothly, without our daily intervention, we can easily adapt new processes as desired by newer geographies or newer product segments.

This has given us the flexibility and agility that is required in today’s world.

When I joined the business in 2011, we used to do high-quality commercial printing. In a couple of years, we set up a book printing unit and immediately became one of the most preferred printing partners. In 2016, our most important client who would contribute to about 40% of our total profits was bought over and the entire business vanished. We turned this setback into a promising opportunity and started looking for business in Africa. In 2019, we started exploring beyond Africa to Europe, and the US and are now exporting to 38 countries across five continents. In 2020, we set up our packaging plant and it is doing superbly well. So, by 2016, what our entire business was earlier is now contributing to between 15-20%. In the last three years, we have explored different geography and segments.

I believe that machines and software can be purchased by anyone. New cutting-edge technology is not going to differentiate between any two entities. It is almost never a setback when you buy a machine from one company instead of another. The debate between Heidelberg and KBA and others is far less significant compared to our business model, our processes and how they run seamlessly. Today is the age of disruptions. How fast one can pivot, and realign the business models and processes to the current requirements is what is going to set the print company apart. And this is exactly what we demonstrated in the last few years.

There are so many discussions happening around, not only in our industry but many other industries, that margins are going down. The competition is far too many and at times mad. The market is significantly going down. The government is not supporting us. If we leave apart the biggies in the industry, we small and medium-scale companies have less than 1% of the market share in the country. Globally, there will be so many zeroes in our market penetration percentage. If we are fast, we have the entire world to conquer.