Stop Leaking Money

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Johnny Shell will be joining the 2 Regular Guys on Friday. We’ll discuss improvements in operations to stop leaking money in all aspects of your business – equipment, training, technology, and more. Now is the perfect time to prepare for capturing market share once the green flag waves. Don’t miss this chance to learn from Johnny Shell, one of the veterans of the industry who is able to help your business grow and thrive.

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Stop Leaking Money

Johnny Shell is President of Shell Consulting Services and provides printing strategy and operations consulting to get businesses tuned up or completely turned around. Johnny is a recognized industry leader with 35 years of experience with a substantial commitment to organizational advancement and strategy-driven growth. He has transformed many businesses worldwide by designing and executing revenue-based strategies, using his comprehensive knowledge of printing techniques and technology platforms. Johnny was a 2011 inductee of the Academy of Screen and Digital Printing Technologies, an international body of experts that honors qualified individuals through election to the membership for their distinguished, long-term contributions to and application and promotion screen and digital printing and associated imaging technologies. you can email him at [email protected]

Terry: Our subject today is Stop Leaking Money. Sometimes we are “just too busy” to pay attention to the drip, drip, drip of money going out the door when times are good. And some businesses have just continued forward or shifted gears and found success during a pandemic. Most of us, though, have been happy to keep the lights on. But, there’s rarely been a better time to look at what we’re doing, and doing it better, more efficiently, and for less money!

Aaron: Johnny, you said something interesting that I believe many owners and managers haven’t considered. With all the businesses’ closures, there will be market share to capture when the green flag waves. What are your thoughts on that?

Johnny: With each difficult new week of the pandemic, owners of surviving print businesses continue to move their focus from protecting the company to recovery and retooling. They continuously ask themselves: “How do we learn during this crisis and retool our business, so we emerge as winners in the future?”

While consulting with some of these business owners, I’ve identified three major trends:

  • They view the Covid-19 crisis as a dress rehearsal for a more turbulent world to come. This won’t be the last time we face a biological threat. In fact, as the world population continues to grow, we should expect more viruses to emerge that are possibly more resistant to medical science. What have we learned during the current crisis that we can use?
    Many have looked back to the CEOs at the beginning of World War II who faced the last plentiful global supply and demand shock. In the 1940s, leading CEOs recognized the “big idea” that emerged from the war: marrying mass production with a global mindset. They envisioned new and expanded boundaries for the organization: Most notably, the role of public-private partnerships became a critical source of creating a competitive advantage. They understood that after the war, new customer segments would emerge with radically new and different needs. The leaders that retooled their companies based on these lessons outperformed their competition.
    They are demonstrating the ideology of their 1940s counterparts to transform their business into a winning organization of, and for, the future. I heard three primary directives they shared with their staff:
    • Talk with the most important customers now.
    • Avoid a bounce back to old ways of working.
    • Let the company’s values and principles guide all decisions.

If you haven’t already, now is the time to conduct a thorough audit of your entire business and operations. What market share opportunities exist, and how do you capitalize on these opportunities? What can be better? What isn’t working or really needed? What is needed, and how soon can it be included in budget expenditures?

These are just a few examples, and I’m happy to help anyone conduct an audit to identify gaps and opportunities for improvement. When we do bounce back, and that’s inevitable, you want to be ready to capture the market share left by those unfortunate businesses that were forced to close. What you don’t want is to return to the old ways where you’re leaking money.

Terry: Let’s start with equipment. What are some things we can do to stop the bleeding? Maintenance/upkeep

Johnny: Guys, this is one of the most overlooked aspects of the printing business. Many owners ignore routine maintenance of their assets and are surprised when something breaks down or becomes inoperable. When something breaks, it needs to be fixed as soon as possible and not have band-aids as the final resolution. I get it. Printers are very innovative. If their “fix” works, then it isn’t “broken.” But, you must understand that these band-aids don’t resolve the issue. They mask them.

Recently, I was doing consulting for a shop, and my main objectives were to train staff and optimize their workflow. They’d had lots of staff turnover during the last few years, so much of the prior knowledge and skill sets had left the company. They’d just gotten a CTS machine and hired a new production artist who didn’t have much experience with screen printing. I had identified several issues in their production workflow, especially in the pre-press and screen making departments that I focused on at the start. Their production artist knew very little about how screen printing art should be constructed, so I spent over a week training them on properly completing artwork intended for screen printing. The average time spent on simple 1 and 2-color jobs was 4-6 hours, which is ridiculous. It shouldn’t take more than an hour on simple designs.

Their screen tension was all over the place, and they did a lot of 4-color processes. Tension measurements I collected had a range of 25 newtons down to 17 newtons, all on the same job. Translate this to the press operator’s perspective, who spent lots of time registering the job. They also were not using a pre-registration system, which resulted in eyeballing registration. Fortunately, the CTS and pre-registration system they had purchased drastically reduced the setup times, which was a step in the right direction. They coated screens the wrong way with the last coat of emulsion applied to the substrate side and then dried the screens with the substrate side facing up; they worked in poor conditions. The place was filthy, and screen making was conducted in non-light safe areas without environmental controls for temperature and humidity. As I worked to make changes in pre-press, the owner kept saying, “I need you to train the press operators for faster setups.” Little did they know that the reason the press operators were having such a difficult time setting up jobs was due (in part) to poor screen making. Matching previous runs were challenging, especially their 4-color process jobs. The presses they were working on were over 25 years old. They had an 8-color press and a 12-color press, and both presses had major issues: head pressure gauges were broken, on/off switches and pneumatic pistons to hold the squeegee flood bars were broken, so the operators had to use clamps to attach them. Entire heads were broken, platens were not level, the presses hadn’t been calibrated since they were installed. Flash units didn’t work properly. Gas dryers had band-aid components installed once original parts had broken. Squeegees had never been sharpened or replaced. All of this resulted in the company leaking lots of money, which the owner thought was simply due to the press operators. I explained that no matter how much training I did, there wasn’t much more I could do given the presses’ poor conditions. In total, I submitted 5 pages of suggestions and recommendations to tune-up their shop, which, of course, we’re all ignored. They wanted me to train them to drive a car that didn’t have spark plugs, a transmission, and a steering wheel. I finally got the press operators to use the pre-registration system (the M&R Tri-Loc). At first, they felt uncomfortable using it. It was new and took them outside their comfort zone. One day, I followed a 4-color process job all the way through screen making, making sure the screens had consistent tension (+/- 2 Ncm), that they were coated and dried properly, were imaged properly on the new CTS system, and that they were exposed and developed properly. When the screens made it to press, I insisted the press operator use the pre-registration system. When they started, I secretly started the timer on my phone. From the moment the first screen was inserted until final approval took 6m48s. Now, compare this to the normal 1-4 hours they normally took, you can immediately see this leak was stopped. These are the small issues where shops leak money, and over time these leaks add up to a mountain of lost profit.

This is an example of a screen-printing business, but I see the same issues occurring in direct to garment and dye sublimation businesses as well. They don’t follow simple maintenance practices that EVERY manufacturer includes with their machine. All of them have, at some level, their recommendations for daily, weekly, monthly, quarterly, and annual maintenance that should be performed…and you MUST do them to keep the machine at optimum operating levels. Digital devices also like to print, at least daily. I’ve talked to hundreds of digital users who are frustrated because their machine didn’t work. After asking about their regular use, many respond with “I run it about once a week,” which is ridiculous. Another frequently used comment is, “I have my printer out in my garage or other awful locations .” Again, another no-no because irregular environmental conditions affect the resulting color that is produced by the device. The color produced in low humidity conditions will be much different than in high humidity conditions. All manufacturers include optimum environmental conditions for their machines that have temperature and humidity. Print heads are consumable, and without proper maintenance of the capping and spit stations, they will fail much quicker. They will usually last at least one year in optimum conditions, and I’m a big advocate of planning for a print head replacement each year to be woven into your costing. In poor conditions, they can go wrong in as little as a month due to owner neglect.

Now, I get it. Times are callous, and money doesn’t grow on trees. But this is exactly why it’s so important to monitor, track, repair, and fix things when broken. Otherwise, the money leaks will continue. With that, be sure to micro-analyze your costing during your audit. Are you charging appropriately, and how do you know? The decorated apparel industry shouldn’t be a race to the bottom. We’re too important for that. Quality, speed of service, and price…also called the unattainable triangle in marketing and advertising…is an adage that high-quality products delivered quickly and efficiently to customers will always come at a higher price and vice versa. If you don’t have a clear understanding of your costs, it is impossible to price products to make a decent profit.

Aaron: Going hand in hand with equipment, what can we do differently incorporating tools and using them?

Johnny: There are many tools that companies can use to improve their productivity and/or offer new products and techniques to their customers using the same equipment they already have.

I’ll start with some of the available tools. For screen printers, I mentioned using a pre-registration system. I gave an example of the setup time achieved versus that company’s standard setup time before the pre-registration system was implemented. If you haven’t already calculated this in your head, the company could process no less than 30 jobs per day (based on a 30-minute run time) versus 4.5 jobs based on the minimum 1-hour setup. That’s huge! Of course, these numbers will vary by skillset, equipment features, and other variables, not to mention 30-jobs per day is likely not going to be the norm. Still, whatever the average ends up being will most likely be well above 4.5 jobs per day.

Many shops do not own a squeegee sharpener and thus don’t get optimum print results on their products. Squeegees should be either sharpened or replaced after 10,000 impressions. If you can’t afford a squeegee sharpener, at the very least, you should replace your squeegee rubber after they reach 10,000 impressions. If you have a squeegee sharpener, use it! What’s the point of letting it sit in the corner serving only as a “catch-all” for stacking stuff on?

Another tool that should be utilized is software, and believe me…there’s a ton of it available. Separation software will save lots of time in pre-press. Yes, the look of prints may change, but over time, the results will become the norm.

Ecommerce software is the engine behind an online store’s scenes, making it possible to easily manage inventory, add or remove products, calculate taxes, and everything else required to manage a website and fulfill orders. Online sales, in case you haven’t noticed, is the new frontier of sales. We’ve all seen the Amazon explosion during the pandemic. We’ve become much more comfortable with buying goods online, which will certainly be a major part of the new normal.

Management software has also exploded onto the scene. This software enables you to track your screen printing, embroidery, DTG, and other production-related jobs without a hassle. They also help you create fast and accurate estimates, invoices, and much more! They are designed to streamline and automate production processes to lessen jobs’ complexity and provide the necessary details and production schedule.

Communication and efficiency are key here, and this software provides a way to keep everyone on the same page.

Specific to digital decorators, color management software and hardware will enable complete control of color output from digital devices. Yes, many already come with pre-loaded ICC profiles; however, these were created in a different environment than your own and may not produce optimum color in your operating conditions.

On the screen print side, there are many tools a shop can use. We’ve hammered using a tension meter for decades now, and I believe the message has finally gotten through. I’ve seen them in most of the shops I visit; however, calibration is lacking. Tension meters should be calibrated once per year. They also should be used to track and monitor screen tension. When tension falls below the acceptable range, the screen should be remeshed.

Temperature probes are another great tool that goes well beyond IR temperature guns and temperature tape capabilities. The probe allows the user to fingerprint their conveyor dryer to see how quickly the temperature ramps up, how long it stays at temperature, and when the temperature begins to fall at the end of the dryer tunnel.

The last screenprint tool I’ll mention is an electronic thickness gauge. Most shops haphazardly coat screens, paying little attention to the overall stencil thickness achieved. Thickness gauges allow you to track and monitor stencil thickness and set an acceptable range. The manual coating can produce a wide range of stencil thickness, especially if multiple workers coating screens. As my good friend Richard Greeves describes, “The stencil thickness is like a hamburger being cooked on a grill. The heat (in this case the exposure light) must “cook” the stencil completely through. If the thickness varies from screen to screen, the required light energy to properly expose the screen must also vary due to the different thickness.” It’s much like cooking a 1/4lb. Hamburger versus a 1/2lb. Hamburger. They each require different times on the grill. Of course, automatic coaters, which are now much more affordable, provide optimum coatings, usually +/- 1 micron.

Terry: What is it that Johnny Shell can bring to the table for a company struggling with any of the issues we’ve been discussing?

Johnny: My expertise lies in knowing how to integrate and optimize any of the technologies I’ve discussed here and how to plan to expand into new and different market segments strategically. Remember I said that business owners during WWII understood that new customer segments would emerge with radically new and different needs after the war. They strategized and planned appropriately so that once the war was over, they would be in the best position to meet customers’ needs. 

I also have a thorough understanding of the variables associated with all of the printing technologies and the various dimensions of their interrelationship and correlation with each other. Screen printing alone has over 500 variables, so it’s easy to understand why so many screen printing businesses fail. They don’t understand the variables involved, ultimately fail at controlling them, and then blame the process.

I know how to optimize any printing process while considering the variables and the ripple effect that can be expected when a change is made (good or bad). There are an upside and downside to almost everything, and I don’t ignore either.

Finally, I develop revenue-based solutions based on logic, leaving nothing (or as little as possible) to chance. This is a complicated business, and sometimes owners are in a groove with blinders on. I can objectively observe operations and business strategy to identify where the money leaks are occurring and develop repairs to stop the leaks.

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5Things

5 Things about the History of Decorating

  1. Screen printing first appeared in the Song Dynasty in China between 960-1270 AD.
  2. Human hair was used to weave “mesh” which was later replaced with silk. Polyester ultimately replaced silk which is now the most popular material for screen mesh.
  3. The first incarnation of the inkjet printer was invented by Lord Kelvin in 1867. The printer recorded telegraph signals.
  4. In 1951, Siemens used inkjet technology in hospital chart recorders to record an electrical or mechanical input such as a heartbeat.
  5. It wasn’t until the 1970s that Epson, HP, and Canon began developing inkjet printers.

Brought to us by Johnny Shell.

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