Why commercial printers should invest in a Management Information System (MIS)

Contrary to many other industries where products are totally standardized, the printing industry is an industry where customers ask for made-to-measure products. What is indeed more different than a book? It is certainly another book! A book is defined by many parameters which make it unique: cover, paper stock,
binding, number of pages, content, fonts, charts, images, etc.. and a printer should take into account all these parameters to produce it. As you know, printing is not limited to books, there are flyers, business cards, letterheads, leaflets, labels, packaged goods, etc… and each product has its own requirements.

To manufacture all these highly tailored products, printers own a set of machinery equipments split into three categories:

1- Pre-press: As its name indicates, it includes everything before press. It includes Graphic Design, where print jobs are created. It also includes preflight, which is an operation to check if the graphic designer did not make any mistakes, such as including low resolution pictures, wrong spot colors or missing fonts. Color management is another step required by prepress. Color management is much more difficult to handle than in the video world as ink is laid on different types of paper, under different illuminants, with imperfect primary colors (Cyan, Magenta, Yellow, Black). Lastly, imposition is another step of prepress where pages are positioned dependant on how the job is to be finished (for example the same document can be stapled or perfect bound, but the actual page order is different for each finished document). In this production phase, the main risk production managers encounter is a job preparation time higher than expected. This risk is actually very common as prepress jobs are often very complex to handle (eg. Trapping, transparency effects, spot colors, complex imposition).

2- Press: During this step, a printer has to decide which press is the best suited to produce a specific job. A printer generally owns different types of press equipment: each press may differ from its technology (it could be offset, digital, typo, flexo) but also may differ from its size (e.g. press width could be 52 cm or 2-up, 74 cm or 4-up, 102 cm or 8-up) and the number of printing units could be different from one press to another (1, 2, 4, 5, 6, 7 or 8 units, and sometimes coating unit). The risk that production managers encounter during this phase is that waste is higher than expected. Also, make-ready times could be higher than estimated. Overloads is another risks they face.

3- Finishing: May be the most customized part of the process. Depending on customer requirements, finishing includes folding, perfect binding, stapling, saddle-stitching, sewing, cutting, collating, dye-cutting, laminating, etc… The risk production managers face during this phase is higher set-up times than expected. One other major risk is that finishing equipments have been mishandled, forcing to start over the production. Finishing is also clearly the bottleneck of the print production process.

Due to the highly customized process and inherent risks of production, manufacturing costs are very difficult to figure out, but of course they are essential to know to achieve profit. In this environment though, you may be surprised to learn that many commercial printers don’t know their costs. Most commercial printers actually managed to make profit by charging a price they think to be high enough to cover their costs. This worked as long as competition remained low.

The problem is that competition has significantly increased in the past 15 years. I think one of the main reason is that the printing industry faced two technological revolutions named Desktop Publishing and Digital Printing. Without entering into the details, both revolutions allowed to dramatically reduce prepress costs and to produce affordable short runs. Imagine that before this revolution, a drum scanner could be priced $100,000, while you can now buy a reasonable professional scanner at $2,000 (if ever you need one!). Other costly prepress equipments such as imagesetters, which produced films, are not needed anymore and have been replaced by CTP (Computer-to-plate). Also, with the apparition of digital printing, habits have changed. The time where commercial printers produced printouts in excess is definitely over. Today print buyers demand short-run printing and fast turnaround times, as it is now possible to do so with digital printing. This implies that printers need to track and reduce their costs in order to be more efficient and more competitive. There actually exist many ways to reduce production costs, but the best solution is to use an MIS tool, which helps optimize the highly tailored printing production process and shorten turnaround times.

MIS Solutions cover 5 areas: estimating and order entry, production management, inventory, accounting and invoicing.

Estimating is usually the first activity performed when a job comes in to the print facility. It consists in estimating production costs dependant on how the job is to be produced. During this step, the print estimator setups all the parameters needed to produce the job: in particular, he selects the number of copies, number of plates, number of colors, paper stock, press and finishing equipments required. The calculation of production cost is then made possible because direct and indirect costs have been initially entered into the MIS system. Direct costs may include hourly labor costs and raw material costs (paper, plates). Indirect costs may include machine-hours cost, make-ready and waste costs and other overhead costs such as utilities costs, rent costs and administrative headcount costs.

Once estimating is completed, a job ticket is generated by the system based on the estimate. The job ticket describes all the production steps needed to produce the job and it is made available to each department involved in the production process.

Then, comes production management. MIS systems include a dynamic scheduling tool to schedule jobs in the production environment (eg. Assign Press #4 for 3 hours on a specific day for job#123). This tool also helps prioritize print jobs, track job status and progress. It enables printers to organize their production and meet deadlines. It allows to check overloads and eliminate bottlenecks in the press and the finishing room. In brief, the production manager knows exactly what is happening in the print operation in real-time.

Another benefit of MIS is to automatically adjust press ink key settings (and therefore save time) depending on initial prepress settings, thanks to CIP4 and JDF. This improvement has actually been considered as one of the main breakthrough in the printing production industry as it allows press operators to significantly reduce make-ready times. Some production equipments are also able to count the number of sheets effectively produced and feed information back to the system. The counting operation enables the operator to reduce waste as the exact number of copies is known in real-time during the production. It also gives an accurate knowledge of make-ready and run waste for each production equipment, and therefore it helps track costs and measure press operator performance (please note that counting can also be carried out by weighing paper for devices not standard equipped).

A better inventory is also a benefit of MIS as MIS systems are able to track paper inventory levels based on production data. Finally, MIS systems enable the user to better compare estimated costs and actual costs thanks to actual production data (actual production times and raw materials used).

To conclude, MIS tools effectively help commercial printers figure out their actual costs. MIS systems mitigate risks such as unexpected high set-up times, waste, overloads and bottlenecks by tracking down actual production data and by efficiently scheduling the production. If an MIS system is setup correctly, it enables the production manager to create more accurate estimates and better track inventory levels. Finally, MIS helps reduce costs because it offers tools to reduce waste and lower set-up times. It also allows the measurement of operator performance, improving productivity. Some MIS systems even enable print buyers to check their own print inventory levels and place orders without the need of a customer representative…