C. Clint Bolte & Associates

Profitability requires so many pieces of the puzzle to fit together. Employees must be skilled and organized to realize efficient production. Raw materials need to be of sufficient quality to be converted quickly and effectively and purchased economically. Equipment and technology must be appropriate for the task while being well maintained and understood. The selling price must be greater than all costs, both direct plus some margin for indirect and overhead allocations. And finally, because of the value that the market places upon the ubiquitous element of "service," there must be a closely constrained and often conflicting relationship between volume and capacity.

With demand for reduced cycle times and quicker production turn around schedules, the art of managing volume/capacity is becoming ever more critical in achieving profitability. This article will offer benchmark successes on innovatively balancing volume/capacity in dynamic, growth-oriented graphic communications firms. Many traditionalists defining the volume/capacity gap as improving utilization.

NAPL's Printers Economic Research Center has published insights learned from their "Growth Leaders Edge™" research. But this volume capacity topic might well take some time for PERC to decipher. If this were a relatively easy topic to understand, it would not be as much fun to write about and most probably the reader would expect predictability and not get much past the introduction.

Eliyahu Goldratt in his two books The Goal and It's Not Luck suggests that identifying and managing bottlenecks is the crucial skill in reducing cycle time while increasing volumes. If a particular task is consistently or predictably a bottleneck, a manager is nuts not to create excess capacity in that center to prevent constipation in the entire process. Two printing truisms seem to reinforce this point.

First, it is virtually impossible for a sheetfed printer to claim to be in the "service" business without having two shifts on key pieces of equipment. Even small printers with 18 employees will often have a skeleton crew of three people on the second shift that can run any piece of equipment in the shop. This skeleton crew either nurses hot jobs through the pipeline or concentrates on breaking bottlenecks. Actual productivity may not necessarily be that high on the second shift with this small group but problems are either solved or averted. Most printers will attest to a more complete second shift crew as often delivering higher productivity than the first shift due to fewer interruptions.

Second, the most successful electronic prepress operations have highly disciplined pre-flight operations as close to the customer as possible, i.e., at the customer's terminal or in the CSR department so that electronic media can be reviewed as soon as possible. The purpose of pre-flighting is to identify bottlenecks and to engineer a work flow that does not create further untenable bottlenecks.

Some of the leading in-plant printers have convinced their corporate controllers that having the lowest costs available by achieving maximum utilization by means of spreading schedules out is short-sighted. Rather more value can be provided to their corporate clients by having over capacity in select centers for emergency or even seasonally predictable jobs. This "opportunity capacity" can pay for itself many times over by avoiding weekend overtime or rush charges levied by the private sector.