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Transcript of Strategies for Laser Printer Cartridge Manufacturing Recharger Magazine Expo 2004 Session...
Strategies for Laser Printer Cartridge
Manufacturing
Recharger Magazine Expo 2004
Session S70 Wednesday 1:00-2:30pm
Mark Hibbard Washington County Community College
Remanufacturers as Entrepreneurs
Risk
Intel Prop
Planning
Expertise
Formal Capital
Time of Entrepreneurial Period
Five Characteristics
Five Characteristics of Entrepreneurial Growth Company (EGC)
Entrepreneurial Growth (Time)
Process that leads up to looking for modification of production floor, including process control, process modification, or redesign
Risk Management
Initially• Not much money, and even
then …• Not much experience in the
industry …• Persuading others to take
on risk: employees, suppliers, customers
Initial Success • Significant value created
that might be lost • To grow, the tasks are more
difficult (management, strategy, sound investment)
• Fear of failure, you may lose company, or lose control, or lose market share
Risk
Intel Prop
Planning
Expertise
Formal Capital
Time of Entrepreneurial Period
Five Characteristics
Intellectual Property
Earliest Stages:• Remanufacturers create
solutions .. Improvisation, creativity is maximized
Growth• Education .. Process
knowledge• Incremental improvement
and variations• Distinctions leading to
control• Protecting you distinctions• Start to think >> “get
bigger, get niche, or get out”
Risk
Intel Prop
Planning
Expertise
Formal Capital
Time of Entrepreneurial Period
Five Characteristics
Planning
Beginning Stages: ……………….. seek resources
– Research & Development = 14%– Business planning = 33%– Financial help = 50%
• Management by crisis vs. detailed strategy
• However successful remanufacturers show Adaptiveness, Open-mindedness, Quick Decisions, Relationship-based sales
Growing• Demands strategic planning,
tactical decisions• Demands coordinated
management• Demands investment which
demands accountability
Risk
Intel Prop
Planning
Expertise
Formal Capital
Time of Entrepreneurial Period
Five Characteristics
Expertise
Initially• Most have no industry
experience (Printing, EP, Toner, Testing)
• High opportunity is recognized (sales, $$)
• Intelligence, desire, adaptability, sales & marketing skills lead to linked recoveries
Growth Requires• Upgrading resources• Skilled, experienced,
specialized training• Strategy
Risk
Intel Prop
Planning
Expertise
Formal Capital
Time of Entrepreneurial Period
Five Characteristics
Formal Capital
Early• No angels• 66% or less than find capital >
$50,000; average is about $25k; not millions of dollars
Success requires • Transition through growth stages • Truly comprehensive changes in the
entrepreneur • From start to finish, new attitudes
and new skills and roles
Risk
Intel Prop
Planning
Expertise
Formal Capital
Time of Entrepreneurial Period
Five Characteristics
Your Manufacturing Operation
Small Shop ( < 500 Carts/mo)
– People– Sales– Time
Medium Shop ( 500-2000 Carts/mo)
– Materials– People– Sales– Time– Performance
• Sales• Manufacturing
Operations ( 2000-5000 Carts/mo)
– Materials– People– Sales– Time– Performance– Growth
Large Operations ( 5000-20,000 carts/mo)
– Materials– People– Sales– Time– Performance– Growth– Quality– Management
Current Wisdom
“It is not the strongest of the species that survives,
nor the most intelligent …
… but the one most responsive to change.”
- Charles Darwin
Your Manufacturing Operation
• Design for production• Materials management• Manufacturing
processes• Manufacturing systems
& automation• Physical controls for
manufacturing systems
• Information control in mfg enterprises
• Quality management
•Remanufacturing consumables is in the class of “entrepreneurial growth companies (EGC)”
•Not just a fancy name for a small business
•Most EGCs evolve over time, through rough stages of development
Starting Points
• Failure is Acceptable – No such thing as winners and losers– More like: winners and learners
Product design and development Process design and control Manufacturing system and facility design and analysis Production planning and control Operation analysis and management System engineering and integration Technology, human resource and organization management Technical sales and technical marketing
The “present” is not relevant
A Basic Model of Change
CHANGE
PAST FUTURE
Fact Inference
Managing = Manufacturing
• A manager’s product is >>> action.• A manager’s raw material is >>
information.• Analysis and Synthesis
are a part of the manager’s assembly line.
Operations• Production• Equipment
Maintenance • Rework• Facilities• Inventory• H/R
Inbound Logistics• Receiving / Inspection• Production Scheduling • Inventory Control• Warehouse management (Position control)Outbound Logistics• Order Acceptance• Picking • Inventory Adjust• Cycle Count / Inventory Adjust• Ship Confirm
Service and Support• Technical Training• Production Process Development• Testing• Documentation• Recruit / Hire
• Share Knowledge.
• Identify Best Practices.
• Build Institutional Processes.
• Attract Best People.
• Create Training Courses.
• Communicate Consistent and Coherent Messages to Customers and Employees.
Cultivate
Lean Objectives
Anything that adds COST to the product without adding VALUE
• muda - waste• mura - inconsistency
• muri - unreasonableness
Waste
• Correction >> Rework “First Pass Yield”
• Waiting >> Any non-work time waiting for tools, supplies, parts, etc..
• Motion >> Any wasted motion to pick up parts or stack parts, wasted walking
• Processing >> Doing more work than is necessary
• Overproduction >> Producing more than is needed before it is needed
• Conveyance >> Wasted effort to transport materials, parts, or finished goods into or out of storage, or between processes.
• Inventory >> Maintaining excess inventory of raw mat’ls,parts in process, or finished goods.
LOOK at YOUR Operation
• Forecasting (sales, manufacturing, materials)• Delays (shipping, suppliers, scheduling)• Transportation (floor layout, build area, evac & kitting)• Inventory (positions, control, materials, systems)• Inspection (process validation, zero defects)• Defects or correction (validate corrective action, inter-dept.
feedback)• Inefficiencies and other non-value added movement (within
processes)
Traditionally RM’s look at floor layout, capital equip, test equip, new components, and other singular objective to improve operations …
Not that easy.
Enterprise Tactics Customer
Needs
New and CurrentProducts/Service
Performance Priorities
and Requirements
Quality, Dependability, Service
Speed, Flexibility, and Price
Operations & Supplier Capabilities
Technology
PeopleSystems R&D Training Materials QualityDistributio
n
IT & Support Platforms
Financial ManagementHuman Resource
ManagementInformation Management
Enterprise Activities & Capabilities
Enterprise Planning Strategy
Timing is now
• Remanufacturing is decades smarter
New Business / New Product Life Cycles
• Development 1986• Growth 1995• Expansion 1999• Maturity
Mono Laser • Saturation Mono Laser
– Development – Color 2002• Growth --
Mono – ripe for lean technique as color goes into the “growth”
Decline
US Market Monochrome Laser Printer (CAP Ventures 2000)
TOTAL ANNUAL CARTRIDGE SALES
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
year
SALE
S IN
MIL
LIO
NS
OF
UN
ITS
rmfg
ttl. Mkt.
rmfg 11.1 12.6 13.0 14.2 15.0 16.0 16.9
ttl. Mkt. 35.1 44.0 47.9 52.8 56.4 58.4 60.8
1996 1997 1998 1999 2000 2001 2002
Total Cartridge Market
Remanufactured Cartridge Market
~27%
OEM Portion
RM Portion
Opportunity Placement • Development stage, there are no cartridge sales at all. However
manufacturing must support a development area and resources to insure a timely product launch.
• Growth stage, sales are slow and marketing costs are high; often manufacturing resources need to be supplemented by frequent training sessions and manufacturing team building.
• Expansion stage, sales should grow more rapidly, and manufacturing teams are executing their well thought out plans to accommodate growth.
• Maturity stage, sales will plateau as most customers who want the product have quality sources for the product. Manufacturing teams have predicted this plateau and the production schedules will adjust for sales volume and inventory reduction.
• Saturation stage, every customer who wants the cartridge product has several competitive sources for acquisition, and there are few opportunities for increasing sales.
• Decline stage, cartridge sales fall and the product eventually becomes obsolete. Manufacturing teams have transitioned resources to new products and reduced raw materials and finished goods to reduce financial risk.
Color opportunity to m
odel new process
ideas
HPSeries Color Market
0.0
0.2
0.4
0.6
0.8
1.0
1.2
Series1 0.0 0.0 0.1 0.1 0.1 0.1 0.1
Series2 0.0 0.8 1.1 1.0 0.9 0.7 0.6
1 2 3 4 5 6 7
US Market Color HP 4500 --- 4550 ---- 4600
Total HP4500 Cartridge
Remanufactured Color Cartridges
Growth
2 years
Maturity
2 years.
Introduction
2 years
4500/1998
4550/2000
4600/2002
9500/3500/2003
Production Mode 1000/mo. -- Key Statistics
EX PX 4000 WX VX 8100 2100 AX SX NX
TRUE COST dpc >> $33.82 $33.86 $63.33 $55.59 $40.44 $85.50 $45.33 $41.41 $19.82 $33.25
updated 2/00 Yr/Ave 23.80% 5.90% 13.00% 8.70% 6.00% 0.90% 1.00% 10.00% 9.20% 5.9%
Customer Model Cart/ Mo. EX PX 4000 WX VX 8100 2100 AX SX NX
Laser Bob 1000 238 59 130 87 60 9 10 100 92 59
$8,048 $1,998 $8,233 $4,837 $2,426 $770 $453 $4,141 $1,823 $1,962
QPA(AVE)
OPC 0.95 $11.67 $12.45 $20.10 $18.06 $12.23 $22.90 $17.10 $12.10 $7.34 $8.20
PCR 0.31 $7.01 $3.25 $3.20 $7.25 $3.20 $3.90 $2.80 $3.60 $3.20
Cblade 0.80 $3.19 $2.39 $3.10 $5.70 $2.29 $4.65 $3.25 $4.85 $1.85 $3.19
Sweeper 0.78 $0.26 $0.25 $0.32 $0.22 $0.25 $0.21 $0.25 $0.24 $0.36 $0.23
Dblade 0.42 $4.18 $2.65 $3.10 $4.67 $2.32 $5.32 $2.56 $2.65 $3.66
Toner 1.00 $7.29 $4.80 $12.50 $16.20 $5.69 $18.67 $5.30 $4.50 $4.54 $10.45
Seal 1.00 $0.79 $0.65 $0.90 $0.83 $0.80 $0.87 $0.87 $0.73 $0.34 $0.42
Mbush 0.38 $0.25 $0.49 $0.52 $0.25 $0.22 $0.22
Box 1.00 $0.55 $0.48 $0.60 $0.75 $0.52 $0.77 $0.63 $0.48 $0.67 $0.72
Bag 1.00 $0.15 $0.15 $0.15 $0.28 $0.15 $0.30 $0.15 $0.17 $0.15 $0.21
Rocker 1.00 $0.53 $0.52 $0.36 $0.89 $0.47 $0.90 $0.32 $0.55 $0.46 $0.64
Empty 1.00 $2.00 $6.20 $17.25 $4.50 $12.40 $27.00 $12.00 $11.90 $1.00 $1.55
Labor 1.00 $3.28 $3.43 $4.50 $4.20 $3.54 $4.40 $3.67 $3.76 $2.98 $3.77
Ship 1.00 $0.30 $0.25 $0.45 $0.45 $0.29 $0.45 $0.30 $0.25 $0.25 $0.29
QPA'd SUBTotal 43.7 $32.76 $32.54 $60.83 $54.38 $39.47 $82.64 $44.22 $40.23 $19.21 $31.18
Inventory(6turns) $0.943 $1.252 $2.356 $1.127 $0.915 $2.638 $0.674 $1.146 $0.602 $2.046
Rework/cart $0.12 $0.08 $0.15 $0.08 $0.05 $0.22 $0.43 $0.04 $0.01 $0.02
Rework % 10.45% 12.00% 7.50% 11.00% 6.70% 5.00% 17.00% 39.00% 3.20% 1.00% 2.10%
No. RW 29 4 14 6 3 2 4 3 1 1
CostEng/mo. $28.10 $4.55 $19.31 $7.34 $3.19 $2.02 $4.29 $3.61 $0.82 $1.40
Process Developments for Planned Improvement at Critical Process Points• SX Corona Wires• NX Developer sleeve / PCR’s• EX Toner/OPC• 4000 Developer sleeve / blade• Pocket carts OPC’s / Seals / PCR’s• WX Developer Sleeve Sys /
Toner• 4000 Toner / Developer Sleeves• 4500 Toner / Seals / Rollers
Data - Truth
• Statistics 101– List ALL areas where data can be gathered
• Accuracy• Usable data
– Taking the data is the first step• Leaders need time to work with the data to make
process changes• Acquisition and presentation
First and Foremost
• Objectives: • Consistency, Reliability,
Accuracy.• Raw Materials ( Purchases)
• Empties• Incoming Inspection: Quality
Control Methods and Examples
• Allies: Interactive Vendors, Customer feedback,
• Adversaries: Variation, Unexpected Vendor modifications, Inappropriate process deviation
• Teamwork
Process Design & Details
• Cell …………….. To ……………...– From past experience develop cell picture– Solve material flow– Breakdown training issues– Document bill of materials (BoM)– remember the “LEAN long range plan” (LLRP)
• ……… Managed Production– Correct process– Training– Scale UP
Prototype Process Improvements/Changes (IE1011)
• Draw pictures … cut out the paper pieces– Map the process from the Cell stage to Managed production– Look at the facilities details
• Air .. Heat … Power .. Lights … Traffic … Storage
– Pick your people resources Carefully … Cultivate shared ideas
• Set up a dummy cell …. Dry run– Check Raw materials flow– Who’s waiting
– Check your plan
Internal Corrective Action (plan for it) TEAM
• Process defects or procedural changes– Review with all production teams … you may have
some ability to kill a problem before it starts
• Retain Visual samples of manufacturing issues for training
• Prevent drone mistakes … Awareness of the process is crucial
• End of shift positive reinforcement – Announce data– Show / Chart progress– Training awards … not material … verbal praise in front
of peers …. MB walking around (MBWA)
Team Leaders are “people”
• Groom people with future goals in mind• TRAINING is communicating your lean plan• Clear concise and ATTAINABLE Goals• POSITIVE Atmosphere Always
Critical Area's Management
• Empties (The EVAC people !!!!)– Source … Cleaning … Inspect …. Waste … Cost
• Cleaning & Handling (High incidence of waste)– Storage … Damage Control … Assembly Staging– Solvents … Inspect .. Waste … Time … Cost
• Assembly– Readiness … Tools … Inspection … Time .. Cost
DO you NEED Capital Equipment ?
• What is Primary Equipment requirements– Time savings– Quality enhancement– Training required– Human component– New tech .. New process
• Secondary requirements– Maintenance– Obsolescence– Expansion
Capital Equipment & Productivity
• Facility Layout– Material flow – Cleanliness
• Documented Procedures – Simplifies training– creates standard
• Training– Cross training, and daily rotation– Team Leaders … Building TEAM
• Sound Forecast– Minimize... waste, storage,hassles– Supply Chain Management
Cell to Managed ProductionTransition
• Planned transition …– Pick the scope of scale-up early – Set training goals early … DO NOT wait
• Excellent training and complete task description fosters worker happiness
• Success is people when you scale up• EXPECT Surprises … (good and bad)
Generic CellEmpties
Empties.. Disassembly & Cleaning & Seal
Test & await packaging
Remove reject material
AssembleInspect & Stage
Planned new material, remove waste
Diagram and Document
uS Visio – has great layout tools and documentation features
Keep it Simple Stupid (KISS)
• Visual aids … 75% of learning is facilitated by visual cognition. PICTURES not WORDS
(Digital Cameras are CHEAP)
• Constant positive reinforcement is Constant Improvement.
• Cross train similar job functions .. Remember social circles and peer pressure are your allies– Disassembly ---- Assembly– Evacuation ---- Component Prep– Pre Test ---- Final Test
Language Barriers More than 60% of RM’s have non English Speaking Staff (ESL)
Assess each work function - REGULARLY
• Map mini processes– document– training guidelines– WORK Timing IE 101
• Mini production for some work function– Skill assessment– Time
• Realistic training goals– Critical for process control– No job is more important
Production Layouts
• Layouts Continued
– Assumes products total ~250 carts a day (3-6 products) monthly target is 10000
– Setup is for one line “teams” and a “specialty cell”– Product switchovers are scheduled on daily intervals
2000 square feet
Materials cart
Tear-down / Evacuation
Final Test Printing Area
Component Cleaning and Prep area
Sto
rag
e
Are
a
Empties Prep Area / Recycling / Sorting
Inco
min
g D
ock A
rea
OPC PCR Corona
Box Tape & Sort
Production REWORK
Hopper Split & Prep
Labeling / Bagging / Packaging Area
Disassem.
Waste Bin Clean.
Waste Bin Assm..
Hopper Clean
Sealing
Filling
Hopper Reassemble
FINAL
Assemb.
Specialty Reman Cell
Sh
ip D
ock A
rea
Production Layouts
Safety Teamwork
• FROM the TOP Down– ALL quality management tools start from
acceptance at the top … Safety requirements and concerns are PRIMARY
• High visibility area for procedures and Training
• Monthly assessments
Critical Path -- Toner - OPC’s -- etc.
• Toner Placement/Storage: Bulk purchased .. $$$ mark/label
all position, track mass flow, bottling?, Filling, Cleanouts? Protect from Temp/Humidity Fluctuations
• OPC’s – Lightsafe, Clean Dry• Magnets/Sleeves - Clink Clink• PCR’s – Clean, Dry, separate !!! • Cleaning Blades – Critical, safe the edge, NO stacking• Charge Blades – Major critical element post EX and
Pocket cartridges • Print Testing: Time, Data, Review, Statistics, Charts,
REVIEW what are you screening?
• Acceptance Criteria: First Pass Yield:
Canon Cartridge Reman Eff
300
320
340
360
380
400
420
440
460
1 2/ 21 / 98 2/ 9/ 99 3/ 31 / 99 5/ 20/ 99 7/ 9/ 99 8/ 28/ 99 1 0/ 1 7/ 99 1 2/ 6/ 99 1 / 25/ 00 3/ 1 5/ 00 5/ 4/ 00
Date
Car
ts Per Day
Production SPC
Cartridges Produced (per man per hour)
2.50
2.70
2.90
3.10
3.30
3.50
3.70
12/21/98 2/9/99 3/31/99 5/20/99 7/9/99 8/28/99 10/17/99 12/6/99 1/25/00 3/15/00 5/4/00
Date
Car
t/M
an/h
r
Per/LW
Production SPC
Production SPC
2/23/00 132 60 32 20 19 6 7 58 22 15 371 2.912/24/00 127 70 46 35 15 8 5 58 14 27 406 3.18
Line workers 2/25/00 125 61 46 38 18 8 5 54 14 29 396 3.1115 2/28/00 137 63 51 23 13 6 7 37 40 17 393 3.09
2/29/00 138 67 43 32 12 6 7 58 41 35 439 3.443/1/00 128 66 36 26 26 11 7 18 22 26 366 2.873/2/00 136 64 50 26 22 4 6 46 28 20 400 3.143/3/00 126 70 34 22 21 6 9 27 36 27 379 2.973/6/00 127 65 38 30 20 7 5 42 44 25 402 3.16
Totals Days EX PX 4000 WX VX 8100 2100 AX SX NX Grand Rate
291 38468 18436 12128 7657 6535 1892 1898 10930 9486 7106 114534 3.08
Hours 2474Ave/hr $6.75Fringe $1.53
Payroll/Line $307,292Overhead $120,000Utilities $4,500
Summary
• More than 25 individual items may be purchase for network cartridges today.
• Less than 38% of remanufacturers have established quality processes for their products or processes
• Less than 50% of the remanufactured cartridges sold last year met an OEM specification
• Lower Cost and higher profits will only be realized by process control and good manufacturing practice