Large Industrial Manufacturer Uses MAP³
to Locate Cost Savings

As 2008 winds down and preparations for 2009 budgets are made, manufacturers across the United States and beyond are faced with a major issue—how can they reduce costs while still remaining competitive in the global marketplace? This was certainly the case with one large industrial manufacturer of filling equipment and packaging material for dairy, juice, liquid food and non-food items. One viable option this company considered was to drive cost reductions throughout their supply chain, placing a firm focus on production costs and materials.

Through the years, manufacturers such as this company have placed a tremendous amount of focus and effort on the commodities that account for the majority of spending, such as metals, plastics, fasteners and others. Typically, results have been mixed due to the uncontrollable nature of some of these materials. This leaves the manufacturers searching for the next generation of cost reduction and thus looking deeper into the bill of materials for additional “low hanging fruit” for cost reductions.

In the case of this manufacturer, there was an excellent opportunity for double-digit cost reductions in the area of printed production parts. This often overlooked commodity consists of manufacturing labels, decals, technical literature and marketing collateral. This commodity can be overlooked for a number of reasons, but typically it is the vast numbers of parts involved and their position as class B or C spend items. The effort required to gather, analyze and implement changes to these manufacturing parts has often outweighed the realized savings.

In order to fully realize the savings potential, this manufacturer needed a new approach to drive reductions in its printed production parts and discovered one such approach with Standard Register’s Manufacturing Assessment of Printed Production Parts, or MAP³ .

Need for Supply Chain Consolidation, Cost Reductions
This manufacturer owns the top spot in the U.S. market for gable top packaging machines. The company’s complete product line includes gable top packaging equipment which forms, fills and seals paper gable top cartons; a complete line of bottle fillers for both gravity fill and electronic volumetric fill for liquid foods; and cup fillers with format flexibility and speeds up to 60,000 cups per hour.

The company, which exports over half of its production, has significant market share outside of the U.S., with machines installed in dozens of countries. The company has approximately 2,000 employees with annual sales of over $50 million.

One of the company’s major Midwestern plants produces coated paperboard that is used for its gable top liquid cartons. The large paperboard rolls contained important product information for customers as well as several different bar codes which are incorporated into a thermal transfer mill roll label.

Due to market demands, the company evaluated its suppliers in May 2007 with a goal of consolidating its supply chain and reducing overall costs. Following an initial meeting with company representatives, the Standard Register team performed an in-depth analysis of the company’s operations and its challenges. To do this, SR used MAP³ , a program consisting of a well-organized and documented approach toward analyzing the fit, form and function of all printed production parts and driving cost reductions via a number of process improvements.

Cost Savings Guidance through MAP³
The MAP³ process, which was covered in-depth in the Winter 2007 issue of Insights for Manufacturers, consists of a select few clearly-defined stages:

• Pre-assessment data gathering
• Plant-level assessment
• Data entry/Specification organization, including samples, engineering prints and performance requirements
• Cost reduction project identification
• Formalized cost savings reporting
• Implementation

As part of the MAP³ process, the SR team provided the company with a detailed proposal of both current and future opportunities to save costs and improve their operations. However, with the critical nature of the mill roll label to the product and its customers, it was imperative for SR to run a comprehensive test order and demonstrate our capabilities to the customer.

In addition to a successful test order, SR gained additional credibility and trust with the consultative approach of the MAP³ . For example, an SR senior technical consultant created a mock-up label similar to one that the company currently used, only smaller in size. This mock-up not only served as a proof-point that a smaller footprint would work with the company’s products and processes, but it also demonstrated our expertise and interest in attacking costs and process improvements within the company.

Through SR’s MAP³ process, the company realized bottom-line benefits as a result of SR’s high level of commitment to customer service, the thorough and comprehensive assessments of the company’s products and processes, and lower costs while reducing product distribution to a single day. In addition, the company has asked the SR team to continue its label redesigning efforts in order to decrease the footprint of the bar code and product information and allow more space for additional product graphics and customer-facing information.

If you would like to use a MAP³ to help your company locate hidden cost savings, contact Standard Register today.