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Tackling Big Jobs Is No Small Feat

If priced right and properly managed, large jobs can significantly contribute to a company’s bottom line.  However, accepting big jobs is appropriate in some situations and ill advised in others.  Smart companies carefully consider whether or not to tie up scarce capacity before accepting exceptionally large job requests.  Rickard Bindery didn’t develop its big job guidelines overnight.  In fact, we learned our lessons from the school of hard-knocks and hope that you will benefit from some of our experiences.

What is a big job?  The answer depends on the size of the job compared to a company’s capacity.  For example, a million piece order of almost anything is large for a ten-person company.  But, the same job may only elicit a yawn for a large printer with many full size webs.  Graphic arts companies should plan carefully before accepting work that strains their resources.

Big Job Opportunities Mean Big Risks
Unusually large jobs may appeal to greed and ego, but astute managers recognize that these have the potential to spoil reputations and wreak havoc on a company’s ability to serve existing customers.  Many graphic arts companies attempt to minimize their risk by spreading a steady stream of business over many customers.  In our industry, even the largest jobs rarely last more than a few months.  Before accepting a behemoth, ask yourself, “What happens once the job is done?”  If you force your regular customers to go elsewhere while you service the large job, will they come back when it’s over?

In my opinion, companies shouldn’t jeopardize existing customer relationships by accepting huge jobs without leaving some capacity free.  In our hyper-competitive industry, saying “no” to loyal customers too long is risky.  Before committing to a very large job, consider:

  1. Whether or not you’re in a historically busy time of year
  2. The amount of work already on your schedule
  3. What percentage of your resources you’re willing to have swallowed by the large job.

Machine Utilization Rates
In general, acceptable machine utilization rates for binderies are very different than for printers.  Since many binderies have a lot of highly specialized equipment, machine utilization rates in the bindery tends to be very low, at least by printers’ standards.  (For example, Rickard Bindery operates profitably at roughly one-third equipment capacity.)  Most binderies’ limiting factor is the size of their workforce.  Using excessive overtime to meet large job commitments isn’t good because profit margins disappear and mistakes increase as a direct result of operator fatigue.

How We Do It
At Rickard Bindery, we don’t commit more than two-thirds of available machine capacity in any function to any one job.  We expect to meet our delivery obligations and retain the ability to respond to the unexpected.  We frequently run at full plant capacity (people, not machinery) a lot of the time because so much unscheduled work arrives from regular customers on a daily basis.  When normal-sized jobs arrive, we know that we can dedicate our third shift, or any other, to them even though we have a large job in-house.

When subcontractors deliver materials to us late for long run jobs, our two-thirds scheduling policy usually allows us to make up lost time and be the hero.  Years ago, we decided our customers deserve exceptional service and although we’re known for being able to handle very large jobs (after all, we do have 67 folding machines, 18 gluing machines, etc.), not allowing any one job to overrun our plant certainly helps.  I’m not saying that our way is right for every graphic arts company, but for us it is.

Unrealistic delivery expectations cost money.  Binderies, finishing companies and mail houses have finite floor space and frequently prefer receiving partial deliveries instead of mammoth-sized shipments that might have to be stored for weeks, if not months.  If print buyers demand unnecessary schedule compliance, they will have fewer vendor choices and incur storage and rush charges.

Critical Paths and Alliances
For really big jobs, it’s not uncommon for all involved companies to meet and discuss matters of mutual interest.  For years, we have participated in a very large repeating job that requires frequent planning sessions with the design agency, printer, paper supplier, die cutter and direct mailer.  Each time the job occurs, the advertising agency creates a critical path timeline that shows each operation and the date by which actions must be started and completed so that consumers receive the piece in their mail, on time.  All companies maintain good communication, especially during production glitches.

Examples
Recently, we dedicated two-thirds of a specialized folding capability to a large folding job for several weeks.  Partway into the job, we got a call from another customer with a desperate need for time on one of these machines.  Since we had only committed two of our three daily shifts to the big job, we were able to produce the rush job on one machine as requested, without jeopardizing the delivery date of long run job.  Had we fully-committed all our capacity to the big job, we wouldn’t have been able to help our second customer and would have missed the opportunity to deepen our relationship with them.

In another example, last year we had a ten-percent share of a $2,000,000 job that required four postpress operations to be performed by four different companies.  The work first went to the die cutter, next to the ink-jetter, then to us (the bindery) and finally to the mailer.  When the job arrived at our plant, we merged one personalized piece with three other generic pieces (received directly from the printer) and performed a complicated fold.  We then gathered, stitched, trimmed, sealed and delivered the final piece to the mail house, which sorted, bagged and deposited the job into the U.S. mail stream.  Before this work began, representatives from each of the involved companies met to discuss what needed to be done and how to do it.  The job went off without a hitch.

This was a good job for us because we used ten of our folding machines and two of our four saddle stitching machines.  We completed our portion of the work on time in three and a half weeks, using about half our capacity in these areas. Work for other customers was not disrupted and the large customer was happy.

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Tackling big jobs is no small feat.  In today’s tough business environment, turning down too much business and/or failing to meet delivery commitments tarnishes company reputations and costs business.  Although our policy of under-committing plant capacity isn’t universally accepted, it allows us the flexibility to conquer the unexpected.  Our admittedly conservative scheduling practices may sound unusual, but we have a lot of repeat business, and this is far more rewarding than winning any one job.

Kevin Rickard is Vice President of Operations for Rickard Bindery and an Officer of the Binding Industries of America.  Rickard Bindery specializes in discovering solutions to challenging folding, saddle stitching, gluing and other bindery jobs.  Kevin can be reached at (800) 747-1389.