K-Print: control over supply chain and triple turnoverApril 21, 2021
Major surplus of production is characteristic to the print industry – the number of companies and printing machines is much higher than actually needed on the market.
OÜ K-Print operating substantially as a family company is moving against the tide in the current market of print industry – while time is hard for print companies, K-Print has still many orders and a solution was needed for competing in the situation, where a customer expects to receive the order in seven days, but the company has work ahead for three weeks.
Major surplus of production is characteristic to the print industry – the number of companies and printing machines is much higher than actually needed on the market. All this has led to the situation, where potential customers have broad choices, and so the customers can set their own conditions – bargaining for lower prices and demanding shorter terms.
A member of the management board of K-Print Rait Rebane says that they have attempted to make the business model of the company different from others, and to contribute much to the development of technology, including digital technology. Management programmes of production and logistics had been used in the company already before, whereby relevant investments amounted to 300,000 Euros, but in the previous year a project-based grant was received from Enterprise Estonia (EAS) for digitalisation of production processes, realisation of which was started together with OÜ Raditex.
The manager of digital technology company OÜ Raditex Mait Ruut says that cooperation with K-Print had started already before the EAS project in the field of general business counselling.
K-Print, which is exporting approximately 75% of their production, faced a challenge, how to compete on a market, where terms are short, while workload is high.
„We had to find a solution for ensuring further developement of the company in the growth phase and for meeting expectations of customers in a situation, where our production plan is completely full for e.g. next three weeks,” Rait Rebane describes the problem, which needed solution. „A precondition is that we cannot say „no” to anybody, even to minor orders. Maximum efficiency had to be ensured in various stages of work. This is usually achieved through hiring more employees or purchasing more equipment, but we did not want to choose this option, as we do not consider it sustainable from the point of view of development of the company. It is easy to purchase machinery, but another thing is to put them correctly into operation with maximum efficiency.”
In fact, it was also clear that the capacity of printing equipment of K-Print exceeds tremendously the current rational abilities to use it. This is often caused by the fact that available IT structure of the company cannot ensure sufficient management of the production process.
Another aspect is related to minor orders, the amount of which is constantly increasing – for example, instead one annual product catalogue, customers want to get five different catalogues in a year. At the same time, K-Print considers also completion of small batches very important for ensuring continuous growth. However, there comes a moment when administration of numerous projects by one specific person becomes inefficient. Therefore the need arose for consolidating minor orders with a special self-service environment, because this is the only way, how fulfilment of minor orders can be beneficial for the company.
Thus, work was started in order to develop the processd management system covering all operations of the company, from raw material supplies to the logistics of deliveries of finished production to the customers, and also a web-based self-service platform, which together shall ensure as efficient production as possible with minimum costs. Simple logic tells that costs cannot be managed economically, when thorough information of the origin of the costs is lacking.
From now on, more attention is paid in K-Print to the analysis of behaviour patterns of customers, which supports deliberate organisation of operation.
In cooperation with Raditex, specification of strategic position was started in K-Print. Digital diagnostics was performed and application was submitted for digital grant, whereby the requirement for the grant was that the diagnostics should be performed based on international standards, using reference models and mapping supply chain of the entire company. As Mait Ruut says, this is the future of digitalisation – covering not only a single warehouse, factory or logistic solution, but increasing efficiency and digitalisation of the processes of the entire supply chain.
For increasing efficiency of the processes, K-Print collects already now dozens data points in their production, and the number will keep increasing. This is inevitable information for smooth organisation of sales, production and logistics.
Furthermore it was decided to make some changes in the management strategy of orders – while formerly all incoming orders were handled in similar way, not the target is personal approach to the orders of every customer with the help of the self-service environment, which is currently under development.
Rait Rebane is convinced that companies, which do not deal with digitalisation today, have no long future – they cannot survive in next 5 years. „As margins in the industry are low, it is impossible to make successful decisions just using your intuition,” says Rebane.
In case of systematic management of supply chain, it is viewed as a whole, with purchases at one end and sales and customers at the other. Concentration is targeted to minor orders, the profitability of which is higher than with major orders, if management is correct. At the same time, this increases the load on warehouse management and logistics – all necessary materials shall be purchased in time, not keeping inventories „for any case”, flexible delivery of finished production to customers shall be ensured, etc.
While based on common practice this is often attempted to resolve with labour force, the contemporary efficient approach tells that software should enable to manage everything. Risks and their elimination in case of a failure in any link of the supply chain are programmed into the system.
Business software has already been implemented into production in K-Print – the system of project management and price calculation communicates in real time with the production management system, and this in turn directly with the machines. Now it is necessary to add the parts of production process, where currently operations are still performed manually, to this communication. In coming weeks the developed self-service environment should be opened for some customers for testing.
While usually in printing industry an order has approximately 17 touchpoints, where human intervention is required, K-Print hopes to reduce this number to four or five after realization of their digital solution.
When expressed in numbers, the result should be visible in the sales turnover of K-Print – while in 2019 the turnover of the company was 5.2 million Euros, in next five years this should increase three times, finally reaching the level of 15 million Euros.
Rait Rebane says that realisation of the digitalisation project is an essential basis for achieving this target. Final conclusions of the efficiency of the new digital solution can be drawn in K-Print next year, when the digitalisation stage supported by EAS will end.
Text: Liivi Tamm, photos: K-Print April 2020
Industry 4.0 best practice examples articles are created within the framework of the DIGINNO BSR project (European Regional Development Fund).