Strive to Improve Continuously

By Andrew Paparozzi
In June 12, 2009

NAPL has long emphasized that despite record consolidation—a nearly 25.0% reduction in the number of commercial printing establishments since 1998—our industry is getting more competitive, not less competitive.

That means we’ll have to run lean, constantly deliver more value to clients, and improve continuously even when the recession is far behind us. It also means we must be careful not to let a relatively favorable position lead to complacency.

Continuous improvement begins by regularly measuring and monitoring key performance indicators. The exhibit below tracks value added per factory payroll dollar—a measure of how much value is created per dollar of factory labor or how efficiently we are utilizing payroll expenditures—for NAPL Performance Indicators from June 2007 to February 2009. The data clearly show that companies’ relative position can change dramatically. Note that the bottom 20% of the group, which has witnessed a sharp drop in this indicator, was in a more favorable position at the beginning of the period. Also note the rise in value added per factory payroll dollar among the top 20%, reflecting that even during extremely challenging times companies can still take steps to:

    • Maximize productivity and efficiency; minimize waste, spoilage, and rework.
    • Automate to squeeze labor costs out of processes.
    • Get faster by minimizing touches, steps, and waiting times between processes.

Metric tip 7Rev  

Because our industry is being redefined by structural change, we can no longer count on a strong economy to solve all our business problems. And we can no longer count on the rising tide of economic recovery to lift all boats—i.e., our recoveries are becoming more and more exclusive. Regardless of current positions, striving to improve continuously is no longer a luxury. As one participant in the NAPL Critical Issues Survey Feb/Mar 09 puts it, “We can’t use being busy as an excuse for not getting better. (For a detailed description of structural change and how it’s affecting our industry, see the NAPL Strategic Perspective 2009.)

Andrew Paparozzi

Epicomm's Andrew Paparozzi, Vice President/Chief Economist, is well-known for his accurate and thoughtful discussions on the economy and US commercial printing industry. A foremost author and speaker on economic business trends in the printing industry, Paparozzi heads Epicomm's Printing Economic Research Center.

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