The 75% rule for efficiency

The 75% rule for efficiency

I was talking to the owner of a print on demand business last week about automating workflows – and we were confusing each other. We had got hung up on what automation was.

He thought automation was basically file processing and pre-press.  I commented…….

“Our data says on average 75% of total Cost of Goods (COGS) is downstream of the press, and a lot of firms miss a big opportunity to drop a lot of cost.”

I know why he had his view.  Print innovated fast when digital manufacturing was young. File management, pre-flighting and moving files between different color spaces meant that automation just had to be done.  For many, automation became synonymous with getting work onto the press and it largely stopped there…. and with that focus an opportunity was missed.  

So about the 75%.  

Pull apart your downstream of the press cost – materials, people, equipment capital, maintenance, freight and direct supervisory overhead – and the amount of cost that is inside these buckets will be the vast majority of your COGS.  Logic suggests that cost reduction and efficiency focus should be in proportion to where the cost comes from.

But our experience is that this just doesn’t happen and most firms have limited insight, control and agility after the press.

The level of waste, staff productivity, machine downtime and rework – let alone being able to see this by other dimensions such as brand, product group, product code, team, shift or time of year (any peak season skeletons in the closet?) is not visible to most.  There’s big savings to be realized inside all of these buckets of cost.

So, this week’s agitation is that when it comes to allocating project effort to efficiency – that the allocation should be proportionate to where your costs lie.  If 75% of your COGS is downstream of the press, it’s worth 75% of focus. I’ve seen large amounts of cost extracted with this approach.

Andrew Smith

Andrew Smith is the CEO of ZenSmart, a leading workflow automation platform that streamlines manufacturing in On Demand plants across the world.



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