Operational Assessments
Why one should be in your future.
Jim Workman, Vice President, Center for Technology and Research; and Steve Anzalone, Consultant, Printing Industries of America
In today’s challenging environment
in the printing industry—overcapacity, erosion of demand, and pricing pressure, to name a few—top performers will be separated from the pack by their ability to control operational costs while differentiating themselves from the competition with unique capabilities
and superior service. While there may be few opportunities to raise prices or even to charge a premium for those unique capabilities, a focus on operational excellence needs to be part of any company’s strategy for creating a profitable future. Accomplishing this requires a relentless and never- ending mindset of assessing the opportunities for improvement in your operation. Over the last decade, PIA’s research shows that the
average printer’s before-tax income as a percentage of sales has been around 3 percent. What that statistic obscures is that the top 25 percent of companies by profit margin achieved about 10 percent, and the rest, on average, basically broke even. The research reveals that printers that achieve profit-leading rankings do so consistently by virtue of strategic and operational excellence. Similarly, printers in the profit-challenger category (bottom 75 percent of companies) typically remain in that category.
Operational excellence means that throughput
speed, inventory levels, day-to-day operating costs, and customer satisfaction are all superior and improving. Jobs are delivered on time and done right. Resources are efficiently used. The culture breeds engaged employees and innovation. Getting there requires assessing the operation—
evaluating processes, systems, and workflows that touch all areas of the business, from front to back. This includes the areas of human resources, accounting and administration, sales and client services, and, of course, the print manufacturing operation. In our experience, an assessment based on a known problem will almost always reveal a root cause seemingly unrelated to the issue at hand. For example, a deep dive into assessing a spoilage and rework crisis will probably uncover shortcomings in hiring, onboarding, and training. An on-time delivery issue may reveal an unacceptably long front-end order entry and job planning workflow. Thus, it is important to take a holistic approach to evaluating the entire business operation. This holistic assessment approach can be broken in to several broad categories: people, human resources,
ABOUT THE AUTHORS Steve Anzalone is a featured consultant with PIA, specializing
in operational assessments. He was formerly president of the HardingPoorman Group, a leading commercial printer. Jim Workman oversees many PIA products and services. Contact Jim and Steve at
consulting@printing.org.
The Magazine 20 Forecast | 2018
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