Testimonials
“I am very happy with the layout that you put together for us. We are filling up the western side of the building's office space with a design company, a music company and a large format output device. We are going to be rebranding as the COT Media Group later this month. We now need to refine a few Standard Operating procedures to maximize the work flow. Things however are dramatically improved with the new layout. I will keep you posted and please feel free to have anyone contact me for a reference.”
Nigel Worme
Managing Director
COT Caribbean Graphics
Articles
Addition by Subtraction
Though it may seem counterintuitive, a reduction of plant square footage could result in increased profit and sales
By Hal Ettinger
A client of mine recently proposed the question: Could he reduce the total square footage of his plant — especially since outdated equipment was taking up room and he wasn’t even using some areas of his plant? After looking at the equipment he uses most often and the workspace necessary to support his operations, we discovered he could actually reduce his space and increase his business.
It’s a fact that the printing industry and the markets it serves (or will be serving) is evolving, and the support required for a changing industry needs to evolve, as well.
As my client realized, the business philosophy of “expand, expand, expand to make more and more money” requires closer inspection as the printing industry continues to evolve. Attempts to increase sales and improve profitability that worked in the past don’t necessarily work in today’s economy and business climate.. In our business and personal lives “doing more with less” may become the new normal —— and the new mantra for our industry as it moves forward.
In an era when the catchphrase isn’t “bigger is better” but “smarter is best,” you can create an opportunity for a new look by taking unused, “tired” areas of your plant and converting them into smart 21st century workspaces. Taking these innovative opportunities expands your bottom line, not your square footage. Since businesses typically become less profitable as their inefficiencies increase, when you design an efficient environment, you will facilitate sales and reduce your costs.
Since digital devices that serve the short-run, high-quality, customized environment are throwing a monkey wrench into the traditional shop, printers today need to turn a negative into a positive. For example, a sheet-fed press room, once the engine that drove the operations, often was the biggest department. Now, because of shifting markets and customer needs, older presses seldom run because they’ve been replaced with newer, more productive equipment. This shift makes the traditional press room smaller.
Also, an area of a plant that once housed specialized equipment for a particular customer may now be obsolete. In addition, it’s generally accepted that warehousing areas have wasted space because some pallets containing raw materials, works in progress or finished goods will never be accessed or moved again.
At the same time that some larger areas can be made a good deal smaller, you also have to consider that new priorities may require that a part of your business that previously utilized a small amount of space may need more square footage. For example, more of your customers may need you to provide fulfillment and mailing services. These labor-intensive projects may require you to think about the space you do have in a different way.
So the next time you’re on the plant floor, make a mental note of areas not being used or being under-utilized. By analyzing which areas or departments of your plant are making money and identifying your growing markets, you may actually reduce plant area or realign certain areas for expanding growing departments.
Ask yourself:
- Is the existing plant flow contributing to the efficient flow of materials and people? (Look for bottlenecks.)
- What equipment is being under-used or rarely used? (Assuming equipment not used at all is already gone from your plant.)
- What operations are making me the most money?
- What market sectors I’m currently serving appear to be growing?
- How does the workspace affect my employees’ performance?
Consider this an opportunity to work smarter, increase profits and facilitate sales, rather than lose revenue or add to your overhead.
Decrease space, increase profits
We live in interesting economic times. For the first time in years, the market for commercial space is soft, and so the leverage for renegotiating a lease is now held by the tenant. If you’re leasing your space and determine you need less square footage, this may be the best time to restructure your lease as the building owner may be willing to make concessions favorable to you. Owners may even add amenities.
Even if your lease is not up, you can ask to renegotiate; you may be able to come to terms for a more favorable rate for each square foot — even if you have to extend your lease. Your monthly profits get a jolt just by reducing your rent.
If you own your building, by redesigning the layout of your space that would require less square footage, you can increase the expandability within your current walls rather than spend money physically expanding your business. Doing a re-layout will not only extend the shelf life of your current facility, it may give you some room to grow, as well. You’ll be able to stay in your building longer, sparing the expense that comes with a move while increasing sales and volume.
With a re-layout, strive to incorporate efficiencies in routing of materials from raw materials, work in process, and staging or storage of finished goods. From raw materials to shipment, if products have to be handled many times, costs escalate and waste can increase — costs that cannot be passed on to your customers. Printers can no longer subsidize their inefficiencies. By improving your material handling, you can be more efficient and thus more productive and profitable.
After a re-layout, if you have empty space you didn’t have before and you decide to close it off, that extra space is available for expandability when needed. Or you can lease it out, perhaps to a complementary business, such as to a supplier who provides your materials, or to businesses that need extra warehouse space.
Even if you do nothing with the extra space, you’ll reduce your operating costs by using less working square footage. Anytime you become more efficient and work out of smaller space, you use less energy for heating, cooling, humidifying and maintaining your plant. You also may find your need less people power or fewer items of equipment to do the jobs your customers want. As your savings on operating costs add up, profits increase.
Smarter space, more sales opportunities
By cutting your costs and working more efficiently, profits should increase, but you may be able to increase your sales, as well. By focusing on growing markets, particularly digital output, fulfillment and mailing, you can expand your business with less space and without operational barriers. Doing a re-layout, can ensure you have the right stuff to take on new customers in growing markets while continuing to serve existing customers in those markets. Additionally, you position yourself to accommodate both existing and new clients, thus giving you a sales advantage.
After analyzing your physical space requirements to determine which departments make you money, rethink how you can make extra space for existing departments within the plant footprint of the space. This is important because when departments are in areas that are cramped, effectiveness and efficiency are compromised. So when the layout reflects having the space where it’s needed most, results will be facilitated, schedules met, and sales increased.
For example, if the anticipated turnaround for certain orders is really challenged because you don’t have the space to effectively reduce the time to do the jobs, you’re decreasing your chances of bringing in new business. By creating an environment where you’re a player in growth markets, you’ll increase your sales opportunities.
In addition, as digital operations take the place of the traditional print environment, employees are less likely to have ink-stained hands and more likely to be computer proficient. So as employees and their working environments change, the physical workspace must change. Consequently, a plant’s layout may transform into quasi-offices with a computer system. Within these newly configured “offices,” lighting, heating/cooling, and humidification must be considered.
Also, with more projects only requiring a digital file, printers should be on the lookout for these non-print opportunities. Thus the workspace may no longer be a place with raw materials and printing machines, but instead the quasi-offices resemble work stations where Web development, archiving, or other Web-based operations are done.
Reducing the area that supports traditional print operations to make way for digital output, fulfillment and mailing, and sales personnel may make sense for your plant. With each expansion of a current department or addition of a new department, you want to make sure each department has not only its own space but the right operating environment to meet its unique needs.
By taking the opportunity to rebuild a different environment, you’ll also signal to your customers your operations are up-to-date and can meet their needs. Today’s customer relate to a more “techy” look rather than to a more traditional shop look. Potential new customers, in fact, may be turned off by your business if they think it has an outdated environment.
Any short-term costs associated with evaluating and redesigning your facility to make it more efficient will be many more times offset by the savings, increased sales and profits you’ll receive over the years. Plus, you’ll feel more satisfaction as a business person that you’re working smarter and savvier and that you’re “doing more with less.
