If you find these words as impenetrable as Esperanto then you need to gen up on them fast. Because they could end up saving your business.

Six Sigma, Kaizen and TOC are just a few of a growing number of business methodologies being used by a plethora of companies from a wide range of different sectors and industries. And although they may sound like pretentious ideas wrapped up in clumsy management speak, at the nub of each is good old-fashioned common sense.

That’s why a number of them are already being embraced by some forward-thinking members of the printing industry.

Dani Novick, director at Mercury Search & Selection, says that she’s detected a growing trend of printers willing to embrace these ideologies in recent times.

“Increasingly printers are looking to improve their performances through implementing lean techniques like Kaizen or Six Sigma principles,” she says. “We have seen a sharp increase in the recruitment of individuals with backgrounds in process improvement and notably the need for an education to back up the practice.”

The appeal of implementing these methodologies is pretty straightforward. They all promise to make companies leaner by eliminating waste, reducing costs and boosting productivity. Despite some members of the industry recognising these benefits, Nick Devine founder of The Print Coach, says that not enough printers are going down this route.

“There are three things that are driving change in the printing industry at the moment,” says Devine. “People are trying to reduce waste, they’re trying to automate and they’re trying to offer more products and services to the marketplace. But what’s mostly driving changes in those areas isn’t business methodologies – it’s technology. Printers aren’t saying ‘we need to use Six Sigma or Kaizen’. They’re saying ‘we need to upgrade our MIS’ and ‘we need a better workflow system’ or ‘we need a better piece of technology in the production or finishing department’.”

Devine estimates that 90%-95% of the printing industry wouldn’t understand the inner workings of these aforementioned methodologies, which makes printers no better or worse than any other industry sector in the UK, as the majority of business leaders are so wrapped up in the day-to-day running of their companies that they simply don’t have the time or resources to investigate the benefits of these methodologies, even if they felt inclined to do so.

But even though the economic climate may look a little more favourable than it did just a couple of years ago, many of the challenges that the industry faced pre-recession haven’t gone away.

“As our industry continues its battle against alternate media, keeping down costs and improving efficiencies and profitability will become even more essential,” says Novick. “So from a human perspective it’s important that whatever your role in a business, you need to understand the part that you play in making your company more effective and if you can back that up with either Kaizen or Six Sigma training, then that’s even better.”

So PrintWeek proposes to give you an in-depth low-down on each of these various all-important schools of thought, in its business methodologies series over the coming months. Here, first, is a round-up of ideologies you might want to consider for your business. 

Theory of Constraints

Also commonly known as TOC, the Theory of Constraints was introduced as a business improvement concept by Eliyahu Goldratt in his 1984 book The Goal. The theory works on the principle that every business and every business process has a ‘constraint’. This constraint essentially relates to the slowest part of the process. For instance, the production of a particular print job may require passing that job through three different machines, so you cannot produce the end-product faster than the slowest machine can process it. This means that if you run the faster machines at their full capacity this will create a backlog of work in progress, which in turn ties up the company’s cash.

One printer who advocates the use of TOC is Dave Broadway, managing director at CFH Docmail. TOC is a core driver for the business, according to Broadway, to the extent that pricing of CFH’s basic print work is based on the value added (or ‘VA’) per hour of the constraint in the process.

“TOC leads to a lot of changes in the way that the business works at every level,” says Broadway. “I suspect that our accounts system and MIS are very different to those of other businesses. Our assessment of pricing for new contracts will be very different. Even our project management and IT development are driven by TOC thinking.”

Leading KPIs

You may or may not already know it, but essentially there are two different kinds of KPIs: lagging KPIs and leading KPIs. For example, a lagging KPI might entail looking retrospectively at your company accounts – what revenue you generated, at what cost and resulting in what gross margin? Nick Devine estimates that around 99% of printers use lagging KPIs, despite the fact that they’re not particularly useful at driving businesses forward.

“It’s very important to know what happened historically in your business, but you can’t correct your business by looking at historical data as, by its very nature, it’s in the past. You need to look at data from leading KPIs, which predict what’s likely to happen in the future,” explains Devine.

An example of leading KPI data would be how many proactive 90-day account reviews has your business got scheduled in the diary for the current 90-day period, or how many face-to-face new business development meetings have you got booked in the diary for the current 90-day period, because the more reviews and meetings you’ve booked the greater chance you have of generating more business.   

To adopt a KPI strategy, Devine advises business leaders identify three leading KPIs and then chart them on a whiteboard, or on a flipchart, on a daily basis, or at worst, a weekly basis.

“It’s an easy, quick, dirty and free approach that requires no hardware or software,” says Devine. “All it requires is business smarts and a bit of discipline and focus.” 

Plan Do Check Act

The Plan Do Check Act methodology – also known as Plan Do Check Adjust – which forms the backbone of the ISO continual improvement cycle, is a four-step management technique that’s used by businesses for the control and continuous improvement of processes and products.

The principle underpinning the methodology is pretty self-explanatory. You Plan, then you implement this plan – or Do – you Check the results and compare them with your expected outcomes, and then you Act – or Adjust – accordingly, if there are any discrepancies between the results you achieved and what you wanted to achieve.

One printer that’s benefitted from implementing Plan Do Check Act, is GI Solutions, according to the company’s business improvement manager James Matchett.

“We felt it necessary to implement business improvement methodologies to take us to the next level in terms of business growth and success,” explains Matchett. “Using the ISO system we were able to capture the great new developments and environmental improvements we were already undertaking at GI Solutions. The ISO structure provided the process for setting objectives and targets and monitoring success.”

He adds that the company has enjoyed a number of tangible benefits as a result of implementing the methodology, ranging from greater operational efficiencies, through to the diversion of 99% of GI’s business waste from landfill to alternate methods of disposal.

MOST

This simple framework tool is used by businesses to analyse or plan the detail of what an organisation does – MOST stands for: Mission, Objectives, Strategy and Tactics. It can help companies to frame questions, dig deeper into the detail of individual tactics and aid business leaders in ensuring there is a logical connection from the ‘Mission’ all the way through to what the business does on a day-to-day basis.

The key upside to MOST is it gives companies “clarity of vision, execution and success,” according to Simon Biltcliffe, managing director of Webmart, who is an advocate of the framework tool.

“It truly is a business-wide improvement plan where the people who are at the coal-face know how best to improve fastest and then gain from the changes intellectually, emotionally and finally financially, but only by delivering those same three benefits to the people they serve externally to Webmart,” he explains. 

Lean

The concept of ‘lean’ manufacturing was developed by manufacturing behemoths like Motorola and Toyota, who are constantly on the lookout for new and better ways of doing business. The focus of the lean philosophy is improving process speed and quality through the reduction of process wastes. Many of the other business methodologies contain elements of ‘lean’, but the two most well-known examples are Kaizen and Six Sigma. 

Kaizen, which was popularised by Japanese manufacturing giant Toyota, is a continuous improvement methodology that aims to eradicate waste in all parts of an organisation by improving standardised activities and processes – the word ‘Kaizen’ means ‘philosophy of improvement’ in Japanese.

Six Sigma, which was developed by Motorola, but gained global awareness after it was embraced by General Electric, shares many similar aims as Kaizen, but at its heart the process improvement tool focuses on consistent output, stability and accuracy. To achieve these goals an organisation creates an infrastructure of experts in quality management methods, and these experts are designated as ‘yellow belts’, ‘green belts’ and ‘black belts’. 

Advocates of Six Sigma include APS Group, Polestar and the Benson Group, which has created its own methodology called ‘Lean Sigma’ that takes the best elements of lean and Six Sigma.