An unstable economic situation like the one we are living in acts as an incentive to practice lean thinking. Though this is a concept born for the industry, it is absolutely valid in any type of activity, from the administration, to warehouse and of course production. The largest is the volume of activity the more benefits you get. But lean management is not related to economies of scale. Its benefits show up even in very small companies.
During the next set of articles we will explain the link between MPS and lean management, and how it benefits our industry, from bottom to top, from the customer to the dealer, the service company, the distributor, and the vendor.
Lean Management and MPS
Lean management is all about eliminating waste, meaning any cost that is not directly involved in producing revenue. MPS is “the active management and optimization of document output devices…” (definition set by the MPS Association).
Voilà, the connection is done: Lean management is not only part of MPS, but a very important part because the optimization influences the full goal of managed print services. This philosophy should always be in the mind for anyone that is managing a business and wants to squeeze every ounce of profit. Lean management can’t perform in a stand-alone mode. Opposite to what some people may believe, improving the relationship with the suppliers is part of the strategy; think even in shifting it to a partnership relationship. Indeed, MPS is the result of the end-customer outsourcing to the dealer the management of its own printing resources. It establishes the bases of a collaboration that goes well beyond these 2 parties. Both the distributor and the vendor shall participate in order to guaranty the best results. The service is critical when talking about printers and copiers. The costs associated to it make the Service business one of the most appropriate for a yield management. Therefore, each and every single party of the distribution chain benefits from the others and benefits the others.
We have organized this set of articles about Lean management in a way so that we can dedicate a minimum time to analyze not only the benefits for each party, but also the applicability of lean management in its business related to MPS.
The Distribution Chain
In a distribution chain, one of the first and most obvious ways to reduce costs is by accelerating the inventory turn-over. This is done either by selling more, or by reducing the inventory or both. In our industry the cost of inventory is impacting everyone:
- The customer has to keep a local stock of supplies “just in case.”
- The dealer keeps its own inventory to attend those un-predicted needs from customers.
- The distributor’s inventory guaranties that the dealer can always attend a need from a customer in as little as 24h.
- The service company’s stock of parts is amazingly expensive but is the only way to meet the SLA.
- The vendor handles production by using best guess estimates. Its volume of stocks of unfinished products is always a subject open to discussion about if it can be reduced without making any breach in the market.
An MPS yield management system will provide all the information regarding future needs of supplies. It is as much as telling in advance to the vendor that it has to have X number of magenta toners ready for April 17th so that the dealer can receive it from the distributor on April 20th and deliver it to its customer on April 22nd , because the user will have to install it in the printer on April 25th. This information does currently exist in the most advance MPS technologies (see www.nubeprint.com).
MPS Yield Management Technology
Yield management MPS technology anticipates needs from the managed devices and provides short and long term forecast of sales. So here we have the first component to apply a lean management methodology: the prediction of demand. During this set of articles we will be assuming that the MPS program in place is powered by yield management technology. Though most of the current systems in place are monitoring systems, this technology is just recommended to capture counters (should your MPS business requires billing per page). But we advise against using it to manage your managed print services as you’ll be facing an absolute lack of control of costs and deliveries. As a consequence, nothing that is mentioned in this set of articles can be applied by using monitoring tools.
In our next article we will focus on how a distributor will be doing lean management and maximize the results by using its MPS infrastructure.
