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Polishing Production for Greater Profit

(July 2003) posted on Tue Aug 12, 2003

Create a larger and more immediate impact on the bottom line by focusing on optimizing your current processes and procedures.

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By Carol Swift, Peter Kiddell

A recent economic survey showed that a large percentage of graphics screen printers are working on very tight margins. So what's new? Tight margins have been a reality for years as graphics printers have struggled with the ups and downs caused by changing market conditions and tried to keep up with the latest digital and screen-printing technologies. Rather than burying themselves in gloom when market conditions are at their worst, many printers are swept along by a perceived need to spend serious amounts of money on technology, aiming to use this investment to gain market share. This is a noble goal, provided that the company doesn't lose sight of its main objective--profitability.

This magazine has readers on several continents who represent print shops ranging from two-man operations to multinational corporations. In every one of these businesses, the aim is the same: generate profits, and the more the better. What isn't the same is how those profits are used or distributed, which varies with the management philosophy of those who run each organization. But no matter what attitude management holds, looking inward for ways to increase profitability is critical to the overall health of any company.

Conventional wisdom

"Get more sales, reduce prices, explore other markets, buy new equipment, search for grants--we have got to do something to improve our financial position!" Statements like this are made in screen-printing businesses everywhere. Such companies pursue the path of increased market share, investing in more sophisticated equipment and achieving--if they are fortunate--high growth in order volume. The problem is that they still maintain a low profitability.

The opposite scenario is when profitability is maintained or increased, but market share reduces. This means that the company may simply fade quietly away. Finding the balance between these two extremes should be the goal of every screen-printing operation.

Nobody in the industry needs to be told that times are tough--this fact is clear to everyone. But what can we do about it? Traditionally if times are slack, machines and walls get painted, parking lots are weeded, and maybe equipment is serviced. For those with an accountant's mentality, such times bring about talk of reducing overhead, staff cutbacks, and rescheduling debt. But those of us with the engineer's mindset will direct our efforts toward improving the performance of the company and the processes it employs.

A positive approach


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