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Business + Management: Marty Mcghie

Escaping the 'Custom Shop' Trap

Don't blame shop issues on your 'unique' industry.




Over the past several years, like many of you, I have attended several trade shows, sat in many classes, visited numerous shops across the country, and talked to countless peers about various issues that we face in the graphics industry. One of the most common challenges discussed at every stop along the way: the custom nature of the business that we all regularly deal with. It seems like every job presents its own unique challenge. As a result, our mistakes run high, and we expend way too much time and materials (read: money) fixing them.
The cause of these problems, however, may not really lie in “the nature”? of our business. Instead, the fault could well stem from the way we tend to approach our work. Blaming
our “unique”? industry may just be a convenient excuse to use when things go wrong. The challenge is to figure out how we can do better.

Price, quality, and service
Let”?s first review our industry”?s past, and take a look at its present
state. The roots of signage and graphics come from a heavily
customized environment”?not many of us began our businesses
with customers ordering 100 of anything. The evolution from hand-painted and custom-crafted signs to equipment with high automation and advanced technology hasn”?t come that easily, nor too quickly.

When you factor into this equation three common key components of our businesses”?price, quality, and service”?our current challenges become even more apparent:

“? Price: I believe that the price curve of our products has followed the automation of technology in our industry in a reverse fashion. In most cases, the better the technology gets, the more money we pay to stay in the game (with the exception of buying mature technology). The good news is that while the costs of machinery and equipment have increased, so has productivity. But like any basic economics model, higher productivity in our industry is quickly followed by market pressure to lower prices. So we find ourselves paying
more money for equipment to produce product at lower prices. This is definitely a tough formula for success.
“? Quality: Without question, the quality of the graphics being produced has come a long way. Print shops today proEscaping
the “?Custom Shop”? Trapduce excellent products. To some extent, the graphics producers
have benefited from the increased quality, but the real winner is the customer. And while our customers have gladly accepted the advances in our quality, they typically have not been too eager to pay more money for that improved quality. Here, market forces are again at work: Plenty of competitors are willing to provide your customer with an excellent print at a discounted price.
“? Service: Like so many parts of our business models, service is largely driven by customer demands. Gone are the days when you can demand 4 or 5 days for a job. The customer wants it in 2 or 3 days, or sometimes the next day”?and, of course, for the same price. And, again, if you are unable to make the necessary adjustments in your shop to meet the customer”?s demands, your competitor surely will.

Manufacturing facility, not job shop
So how do you change to meet the demands of your business environment? Begin by throwing away the notion that you are a custom shop providing a premium product to a first-class customer. That business model no longer has legs. Think about what you produce on a daily basis. Is every job really a new “custom”? job you are producing? Not likely. The image may differ
and the size may vary, but you have probably produced that job hundreds of times.

Once you quit thinking of your business as a job shop and begin thinking of it as a manufacturing facility, you can begin to make the changes that are necessary. Examine your production
processes and analyze whether or not they are set up to produce work in an assembly-line fashion.

How, for instance, are jobs entered into your system? How are they prepped in your digital department”?one job at a time, technician by technician? Are your printing and finishing facilities set up to maximize production, or are they configured to more of a custom environment? How is your paperwork managed, from job tickets to invoicing? Is your packaging and shipping department set up to facilitate a smooth flow of product, or has it been set up more along the lines of one package at a time?

These questions should encourage you to analyze your business with a different mindset. Evaluate your workflow and determine what changes can be made to transform your business into more of a manufacturing environment”?not a custom job shop. You”?re not the latter, and you probably haven”?t been for years.
for example, we have recently enrolled all of our key personnel
in a course on lean manufacturing”?which teaches us how to refine our manufacturing processes through eliminating inefficiencies in our production processes.

Before attending the first session, I was skeptical about whether or not the training would apply to our type of business.
After just the first two hours of the class, however, I knew the concepts being taught would help us move our business
in the right direction. And although we are only in the second phase of our training as I write this, we already have the right energy and focus from our management group in our efforts to transition to a manufacturing-oriented business.

Most states have programs that will assist companies in paying for the cost of educational programs on topics such as lean manufacturing. The Manufacturing Extension Partnership
(MEP, is one example: A nationwide network funded by federal, state, local, and private resources in all 50 states, MEP works directly with companies to provide expertise and services on process improvements (as well as other business practices). It”?s definitely worth your time to investigate these types of programs.

I should also note that while we chose to focus upon the strategy
of lean manufacturing, there are several other approches”?Six Sigma, TQM, etc.”?that may serve your particular business equally well. The important thing to remember is that this process may take some time and will undoubtedly have some bumps and bruises along the way. But if you remain committed
to the process and your end goals, changing your mindset and work habits toward these goals will help you compete more effectively in those critical areas of price, quality, and service.

Marty McGhie ([email protected]) is VP finance/
operations of Ferrari Color, a digital-imaging center with Salt Lake City, San Francisco, and Sacramento locations.



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