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IBM & CAPV Report: Supply Chain Efficiency And Workflow Can Boost Profits

Press release from the issuing company

ON DEMAND, New York, NY, April 8, 2003 -- Cutting costs through device consolidation and reductions in labor overheads has reached the point of diminished returns for print service providers, according to a new report released at On Demand today by IBM and CAP Ventures called "Becoming a Super Efficient Organization". To succeed in the next era, print providers need to become "Super Efficient Organizations" (SEO) focused more strongly on currently overlooked elements of business process infrastructure, workflow and supply chain integration, in addition to print production processes. "With few exceptions, the standard business processes used by printing companies to get work in house, track it, manage production, and get it out the door and delivered are tremendously inefficient and a burden on today's operation," said Terry Frazier, CAP Ventures consultant, speaking at an exclusive customer and media breakfast at On Demand in New York. "More than the actual manufacturing of print, it's the handling of daily workflow that can mean the difference between profitability and losing money," he said. According to the new report, produced for IBM by CAP Ventures, even seemingly small changes in process efficiency can have significant effects on profitability. Only when the entire product lifecycle is managed - from the origination of a customer idea to the delivery of a finished good - do all opportunities for waste reduction, cost savings, and profitability become apparent. The report details steps print service providers should take to become a Super Efficient Organization. IBM customer experience supports findings: Charles Schwab Charles Schwab's Automated Document Factory (ADF) processing operation in Coppell, Texas is arguably the most modern and super efficient in the world. Using IBM Infoprint Workflow and working with IBM Printing Systems' Consulting Services team, Charles Schwab slashed its print cycle by 20 percent, increased its quarterly volumes, and now processes and delivers up to 28 million pages each month. "With IBM Infoprint Workflow, we have seen a two- to four-hour reduction per monthly processing period in the amount of time our printer and inserting machine operations staff spends on processing," said Kevin Matthews, Director of Automated Mailing Services, Charles Schwab A super efficient organization built on proven manufacturing and automated process control principles, productivity at the new Charles Schwab Coppell facility is now well beyond expectations in terms of productivity and efficiency and its associates are genuinely proud of their workplace. Phased Approach to Super Efficiency and Profitability CAP Ventures points to successful companies in other industries such as Ford Electronics, Wiremold Corporation, and Pella Corporation, who have adopted proven management principlesto slash manufacturing cycles by up to 95 percent, reduce order lead times, and increase profit growth rates to 35 per cent. According to CAP Ventures' research, print service providers can realize such improved efficiency and profitability by translating proven management principles into a three-phased approach tailored for the print industry (described in more detail in "Becoming a Super Efficient Organization"): Phase 1. Automated Document Factory - an automated factory floor consisting of computer-controlled equipment and supporting process management software. It is the most common, and readily understood aspect of the SEO. Phase 2. Open Workflow and Customer Data Integration - integrating customer data and processes into a collaborative environment. For example, connecting customers' data streams - how many inputs, how many transformations, and how many delivery options are provided - to simplify the customers experience. Phase 3. Downstream logistics and management integration - integration of the entire supply chain, creating a collaborative web of services that appears transparent to the print customer. According to IBM, this final phase is the most difficult and often overlooked link in the chain, but also most critical to success. Using IBM Infoprint Workflow can help address the challenges inherent in this phase, by allowing print operators to integrate and control data and processes throughout the organization. In addition to tying the IT infrastructure together, this phase also requires strong management support for building the necessary relationships between management, employee, customer, and vendors. "Digital printing presents a world of opportunity, as well as a new set of challenges. Customers are demanding shorter turnaround times and run lengths, and the ability to deliver increasingly complex and variable documents that deliver higher value and return. We're seeing that the key to success, and profit, is workflow and efficiency," said Humberto Prospero, Principal, IBM Printing Systems Consulting Services. For a copy of "Becoming a Super Efficient Organization" or an archived link to the On Demand web cast, please visit http://www.ibm.com/printers