From the Forest to The Front Door

Supply chain management addresses business efficiencies through the integration of the printed product's entire pipeline.

By Lisa Leland, Associate Editor -- Graphic Arts Online, 11/1/2000

In today's world, supply chain management reflects an intrinsic understanding that business processes must be integrated from the end user through the original supplier for optimum efficiency, cost savings, and value to the customer.

Already, this presents a dramatic challenge for a heavily fragmented graphic arts industry mired in uncoordinated, outmoded business models that, instead of viewing the supply chain as an end-to-end product pipeline, treat companies and their component parts as distinct functional entities.

"Many printers have never even viewed their manufacturing organization as a supply chain," attests Susan Kelly, managing director of industry consulting firm Raine Consulting, Glen Ellyn, Ill. "Even the words 'supply chain' are new to them," adds Kelly, who is a frequent speaker on print management issues as they relate to e-business.

The exhortation from Kelly and other industry experts is for printers to follow the lead of other large manufacturers, and develop and execute a supply chain transformation plan that will move multiple, complex operating entities--both internal and external--in the same direction.

Clearing hurdles

"The graphic arts industry has always been extremely good at crisis management and managing change through technology, but we're at a point now where the level of sophisticated management coordination needed to make it over the hurdles into a totally digital environment is new for a lot of players outside of the Quads and Quebecors," states William T. Davison.

Davison, a 25-year graphic arts veteran and principal with the industry consulting firm Point Balance, Harvard, Mass., adds, "Building organizations that are flexible and able to look at longer-term planning is a new skill set. A printer can easily make a short-term decision that is right for now, but can be completely wrong as the industry makes a whole-hearted conversion to networked digital prepress and printing environments."

He continues, "We're really trying to figure out how to conduct business totally digitally across networks. So commerce plays a role because we're transacting business; production has a part as well because we're actually producing goods; customer relations management plays a role because we're developing and retaining relationships; and administrative control is involved because we're looking at integrating business systems, including purchasing, human resources, finance, auditing, and accounting."

New holistic approach

Davison, former vice president of customer services for Scitex Corporation, recently spoke at the Digital Smart Factory conference in Orlando, Fla. on the need for this holistic approach to supply chain management. Such an approach is said to be essential in the printing industry's migration toward computer integrated manufacturing.

The conference--which was jointly sponsored by the Research & Engineering Council and the Graphic Communications Association, and co-hosted by the Graphic Arts Technical Foundation (GATF), the Technical Association of the Graphic Arts, and the CIP4 consortium--focused entirely on the industry's lack of automation technology competency.

Integration issues

Pinpointed at the conference were core issues hindering the advancement of the "digital smart factory," or the drive toward a common networked infrastructure with common administrative systems.

Among these roadblocks were noncommunicative "silos" of prepress, pressroom, and bindery departments, each of which use separate computer technologies; outmoded legacy equipment still in place that uses little or no digital technology; and the sluggish advancements in and adoption of CIP4 initiatives, including the need to quickly move forward with the Job Definition Format (JDF) standard being developed by Adobe Systems.

"We are clearly at the advent of a new generation of systems that allow a printer to integrate knowledge about a job with his or her actual business system, which is used for tasks such as buying paper, estimating, and logging in client service-related changes," asserts Paul Beyer, group product manager for Adobe's professional publishing group, which heads JDF development.

Beyer continues, "Given the hugely fractured and disconnected process we have today, the goal is to work towards a job-ticket standard that yields enough information about jobs to make it meaningful, and for each of the various system vendors to incorporate that standard or conform to it.

"What we've had up to this point is a menagerie of things that don't talk to each other. For example, companies such as Hagen and Prograph have created their own turnkey approach to managing everything that happens in a printing plant. Then we have the dot-coms, which have tried to streamline sales transactions through their own kinds of monolithic Web sites.

"Finally, there are the end users, who are creating Quark and PDF files and shipping them to their printers either directly or through a dot-com service."

Taking advantage of JDF

According to Beyer, the goal of JDF is to enable through an application or authoring environment the creation of a job ticket, where a description of the job's intent can be passed through a Web interface or a set of Web services--whether they're at the printer's or dot-com's site--that can read that job ticket and any additional data.

The standard must be robust enough to express all of the many hundreds of thousands of semantic nuances in the commercial printing process. For example, it must include the different configurations of hole-punching or information about joggers that must shift the paper a certain way for folding and cutting requirements.

"The kind of detail needed in a specification to achieve some level of automation is immense," explains Beyer. "In an ideal world, assuming that a PDF workflow is the norm, we'll be passing to the printer single PDF and JDF files, which can then be parsed and read into their business systems and production environments.

"The intent that was specified by the end user, print buyer, or dot-com company can then be converted into a process definition, which in turn can drive a platesetter, digital press, or whatever. So we have this interconnectivity between the end user, dot-com, production system, and MIS system, and that's what supply chain management is in a JDF world."

Dot-com testimony

Of the leading e-procurement solutions targeting the printing market today, printCafe, Pittsburgh, Pa., was recently selected by Englewood, Colo.-based Mail-Well, Inc., which claims to be North America's largest commercial printer with $2.5 billion in annual sales.

Keith Pratt, vice president of purchasing for Mail-Well, says his company elected to use printCafe's services specifically for the latter's emphasis on the whole supply chain and its integration of Web-based front-end tools with back-end enterprise resource planning systems.

Swayed by a roster

Pratt says Mail-Well, which has adopted printCafe services for all 140 of its printing facilities, was swayed by printCafe's extensive roster of purchased management systems, including AHP, Hagen Systems, Logic Associates, M Data, and Programmed Solutions Inc.

printCafe was created nearly a year ago through the combined initiatives of Prograph, a leading provider of print management software, and CreoScitex.

"We felt printCafe provided us with a platform to sell more by better communicating with our customers, and making the supply chain more efficient in terms of quoting, order placement, and order-tracking--really, the whole process of doing business," says Pratt, who lists among supply chain management's core benefits reduced cycle time and production waste, along with the elimination of process redundancies.

"We're trying to find an appropriate linkage back to our suppliers," he explains. "So from the time business begins with a print customer, whether it's through an RFP or quoting, good supply chain management becomes a very efficient way of securing that link, and then placing an order in one of our plants and specifying raw material requirements to meet that production demand.

"The idea is that the whole supply chain becomes synchronized and speeds communications to the customer, our plants, and our suppliers."

Sharing information

printCafe quality assurance manager Kate Moore has a background in the paper industry, including six years' worth of developing effective supply chain management strategies from the raw material supplier's side. She sees supply chain management's greatest gift for printers as the facilitation of information sharing between formerly disparate circles.

As such, Moore adds, the print buyer is made more effective in an organization by being able to serve the consumer better.

"During my tenure in the paper industry, when I wanted to do business with printers as a supplier I had to first find out what their capabilities were," says Moore. "A lot of times, I not only couldn't get to the data I needed to make more effective decisions, but the data I did get wasn't as timely and accurate as I needed it to be.

"Because the technology and systems hadn't existed to make this data exchange work," she continues, "we had pockets of assets or inventory that piled up at individual sections of departments and companies. This happened because the paper supplier didn't know what the print buyer was going to do, and had to guess and make sure paper was available in various sizes.

"The merchant or broker as well as the printer might have had another pile of inventory because they needed to get it from the manufacturer. So looking at inventory as money, there could be big piles of paper stacked up all over the place because we're all guessing. And when we guess wrong, we have wrong products at wrong places at wrong times."

Accounting not fully addressed

When it comes to the accounting-based integration of supply chain management, Craig L. Press, president of the Sarasota, Fla.-based Profectus consultancy, stresses that most of the print dot-com solutions have yet to address the problem in any depth.

"What I haven't seen tackled as yet is the ability to order paper from a vendor through a business management system, and receive electronic invoices from vendors and make payments to these vendors electronically using e-commerce," says Press, who serves as a management consultant for the Printing Industries of America/GATF Solutions On-Site consulting team.

He adds, "Manufacturers outside our industry are using much more advanced technology, including systems designed by Oracle, SAP, and PeopleSoft."

Craig does credit graphic arts dot-com solutions for pursuing the integration of the evolving eXtensible Markup Language (XML) standard for formatting and exchanging documents and data over the Web, computer-to-computer, regardless of the system.

Last month, printCafe was named an adviser to the Universal Description, Discovery, and Integration (UDDI) project, a cross-industry initiative taking advantage of standards such as XML to serve as a building block for businesses to dynamically find and transact with one another using their preferred applications.

Promise of automation

"When it matures in a few years, XML promises to automate all of the business transactions exchanged among printers' customers, suppliers, and organizations, including ordering and payment systems," Press states. Among its myriad benefits, XML is expected to provide the flexibility to share and combine information among the parent company, acquired companies, and divisions, he says.

Naturally, along with increased automation will come a reconfiguration of departments such as order entry; employees affected by this change invariably will need to shift and expand their skill sets into other roles.

printCafe's Moore stresses that this cultural aspect of automation is one of the biggest challenges for firms embracing supply chain management.

"Normally, people are comfortable doing business the way they've always done it, and no one wants change," says Moore. "So taking a look at the education and retraining necessary to move that whole population brings out how crucial each person is in the supply chain. The key is to make them see the benefits to the organization and themselves. For example, people who are order chasers today will realize the advantage of being account managers managing products or systems across the organization tomorrow."