New Technologies in a Printing World – Disruptive Technologies
The date was October, 22, 1938; the location – Astoria, New York. This was the day Chester Carlson created his first successful test of a photocopying method he had been working on for three years. Carlson was a patent attorney with a background in physics. His motivation for copy reproduction was to find a more efficient method of copying the endless amount of documents required by someone in his position. Although I have no evidence to prove it one way or another, I am certain he never saw his invention as a future means for consumer packaging companies to reduce inventories or personalize their product packaging. As a matter of fact, it took over 20 years for the Xerox Corporation to finally deliver a usable means of utilizing this invention with the introduction of the 914 model copying machine in 1960. This process later came to be known as xerography.
It took a lot of imagination and numerous technological advancements to take this simple idea of making multiple copies of a black and white document and extend it to creating photographic quality and variable multi-color images from a digital file. Digital print production has become a means for traditional (and non-traditional) printing companies to compete against Internet-based communication options. The extension of printing documents and other collateral material to printing packaging materials digitally is an obvious move.
Unlike a PDF attachment or embedded document, a mailer printed digitally still has the same cost of transportation as a similar piece printed conventionally. There are many alternative substrate options and outside pressures creating challenges within the packaging market, but at least one thing is good – we don’t have to compete against the Internet. I will never forget the episode of the CBS news series 60 Minutes when commentator Andy Rooney did a monologue in which he tried to demonstrate with a deodorant carton how much waste went into a typical box. Although his argument, I feel, was specious in that he skipped over the many values a package provides, it still had an impact and it wasn’t too long before deodorant was sold without an outside carton. I think he did a monologue on “junk mail” once too.
What Mr. Rooney and other social commentators fail to acknowledge is that in the highly competitive marketplace of today, manufacturers are under constant pressure to reduce or cut out waste entirely in order to remain viable. Our role as packagers is to help sell and protect our customer’s product, and then also provide information to both the distributors and end-users as to what exactly they are getting inside the package. I look at printing packages on a digital press as a means to support two important goals: reduce waste through less make-ready and inventory obsolescence; and to help the customer sell more products through personalization and enhanced shelf presence. As Peter Drucker claimed in his 1990 HBR article entitled “The Emerging Theory of Manufacturing”, the entire enterprise, of which manufacturing is a key component, must be managed as an integrated process that converts materials into goods, or as he called it – “economic satisfactions”. The end product must meet the customer requirements, and at a price they are willing to pay.
At the time Drucker wrote that paper, the United States had fallen behind other countries, Japan in particular, in productivity and was making decisions that continued to worsen the situation. Investing in automation, as GM was doing for example, may have been the right idea, but their investment in automating a single front-to-back assembly line gave the appearance of increased efficiencies, but it actually added much more cost and did little to meet the needs of customers who wanted a wide choice in products and features. One of the most noteworthy recommendations Drucker made was to get rid of the cost accounting systems so prevalent in manufacturing. These cost accounting “efficiency based” decisions led GM to build all of their car models from the same bodies, frames, and engines, a decision that did not go over well with the dealers or consumers.
No matter how many times I think its end is near, cost accounting continues to be prevalent in the printing and packaging industries. Rather than costs generated from budgeted hourly rates as a comparison, Drucker preferred process speed as a better measure. A digital press might be a better option to print a short run, but at least in the case of a folding carton the job still needs to be coated, cut and creased, folded and glued. If the total time from order to delivery improves only by an hour or two, the benefit to the customer is negligible. If the improvement is cost savings as a comparison to a conventional print method, and they were generated by using budget hourly rates then those cost savings are illusory.
Drucker also makes a good point that when the use of cost accounting originated, 80% of companies non-material costs were direct labor. Today, that number is 25% or less. The administrative side of a manufacturing company has to go through the same process improvement operations as the manufacturing plant. Perhaps even more now, since customers are becoming more accustomed to Internet-based ordering options and the ease in which they can comparison shop, place and then trace an order all the way to delivery. Questions on order history can be retrieved anytime with just a user name and a password. Support may not always be the best, but at least options are available 24/7. Although millions of dollars were invested to create these e-commerce systems, this type of technology is available to packaging companies and could prove to be a wise investment in continuing to meet customer demands.
To improve a process, there needs to be a meaningful goal to attain, and a way of measuring that goal so progress can be tracked. Drucker placed a great deal of importance on Statistical Quality Control (SQC). By using SQC an operator has a better chance of identifying sooner when something isn’t working right, and then be able to provide a remedial response to correct the problem. SQC is vital for performing continuous improvement, or what the Japanese called kaizen. In his book called Kaizen, Makaaki Imai shares his thoughts and debates the merits of two forms of continuous improvement: the American way of achieving sudden great leaps in improvement called innovation vs. the gradualist approach of the Japanese called Kaizen.
Successes like Apple’s resurgence has given innovation the upper hand in that debate recently. In either case, Drucker, Imai, and probably every other student of business management have come to the conclusion that you cannot succeed by treating people as robots. The workers on a production line need to have a say on how things are done and the power to make change when required. Technology can bring automation and improvements to a number of processes, but someone has to make decisions, and the closer that person is to the function performed the better the results.
As brilliant as Chester Carlson’s invention of xerography was, it was perhaps surpassed by Xerox CEO Joseph Wilson’s idea to lease rather than sell the first 914 model copying machines. He knew that at a base price of $29,000, few companies would risk or even could afford his machine. By charging a monthly rate of $95, and then charging 4 cents per copy beyond 2000 copies/month Joseph Wilson was able to bring a great solution to the masses.
Technology continues to advance in the packaging industry and is providing customer options that were unimaginable before. In order to effectively utilize these advancements, there must always be a focus on the customer. Overall systems thinking needs to be put into place. Processes need to be evaluated, including recognizing that current methods of measurement that may not accurately tell the story that management needs to know. And of course it should be added that we must be continually aware that we need people to make this technology work and be meaningful, and to do that, work must be made meaningful to them.